The Forgotten Laborer - Raising the Retirement Age

Introduction

Main Item

The White House has created a panel comprised of 18 members to consider changes to Social Security in order to keep it solvent. Among the changes being considered is raising the retirement age. One Republican representative has called for raising the retirement age as high as 70 over the next 20 years; some Democrats are endorsing similar steps.

These considerations and discussions focus largely on employees who work sedentary or less demanding jobs at desks and computers.

Lawmakers and those promoting raising the retirement age are comprised largely of those who spent their younger years in graduate or professional school in preparation for jobs that would logically take them into their late 60s and 70s, says Teresa Ghilarducci, a professor of economics at the New School for Social Research.

However, a new analysis by the Center for Economic and Policy Research (CEPR) found that in 2009 more than one-third of workers over age 58 were in physically demanding occupations.

Physically demanding jobs included those requiring:

• Strength
• Bending or twisting
• Kneeling or crouching
• Quick reaction time
• Handling and moving objects
• Significant time standing, walking or running
• Repetitive motion

Over 44 percent of these older workers held jobs that required either general physical effort or difficult working conditions. The analysis concluded by suggesting that raising retirement age for Social Security would place a greater burden on older workers in occupations that require physically demanding work, as they may not be able to continue to work in their jobs into their mid-to-late 60s. These workers may be left with no option but to leave the workforce before reaching retirement age and would therefore receive reduced benefits.

Aging Workers in Physically Demanding Jobs

CNN Money recently ran an article that told Jack Hartley's story; he is 58 years old and works 12-hour shifts assembling tires. His job requires him to pull piles of rubber and lining over a drum, cut the material with a hot knife, and then lift and throw the half-finished tire, weighing up to 20 pounds, onto a rack. He does this nearly 30 times an hour, or 300 times per shift.

Hartley says he feels like the forgotten man. He has had pain in his knees, lower back, elbows and shoulders since about age 50 and does not believe he can last until age 66, when he will be eligible for full benefits. He had planned to retire when he was 58 but kept working after he and his wife were faced with high medical expenses and his employer froze one year of its pension plan. While he feels stuck at work, he does not think he can keep working beyond age 62 to 65.

Hard labor is a reality for many older workers who may have started working in their late teens and who are, on the whole, less formally educated than other workers. In 2009, 8.5 million older workers held difficult jobs. Raising the retirement age means requiring more from these older workers. In 2002, 29 percent of workers age 55 to 60 said they experience chronic pain and 46 percent said they had arthritis.

It is true that more Americans are taking early retirement. But a 2006 McKinsey & Company study reported that 40 percent of early retirees said they were forced into it, approximately half for health reasons.

Disproportionate Effect of Raising Retirement Age

The CEPR study also found that among older workers, it was more likely that the following groups held physically demanding jobs or jobs with difficult working conditions:

• Men
• Racial/ethnic minorities
• Immigrants
• Less educated
• Less affluent

Additionally, says Ghilarducci, raising the retirement age would have a disproportionate effect on lower-income workers and minorities, who tend to have lower life expectancies and therefore fewer years to collect benefits.

Keeping Social Security Solvent

The co-chairmen for the deficit panel, Erskine B. Bowles and Alan Simpson, have both warned that in light of the program's path toward insolvency, any fix should involve both cuts in future benefits as well as increases in the payroll tax.

AARP (formerly known as the American Association of Retired Persons) has spoken out against measures to cut Social Security as a way of reducing the budget deficit, which the group says the program did not cause. But AARP has signaled its support of adjusting Social Security tax revenues and spending to shore up long-term stability, urging a rational approach. Group officials say they will not hesitate to fight major cuts to Social Security.

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