Originally posted on PewResearch.org
We Have a Big Challenge Ahead
At a time when young and old don’t look alike, think alike or vote alike, how will America modernize its entitlement programs so they’re in sync with its new demographics? How can we keep faith with the old without bankrupting the young and starving the future? It will be difficult.
Support for Retirement
We start with this reality: Social Security and Medicare are practically sacrosanct. Nearly nine-in-ten Americans say they’re good for the country. That’s an amazing number. But the popularity of these programs really isn’t all that surprising. People love them because they do what they were created to do. They ease many of the frets and dreads of old age – a blessing not just for seniors but for everyone who loves, supports and depends on seniors. Which is to say, everyone.
Saving the Safety Net
Changing Worker-Beneficiary Ratio
The first monthly Social Security benefit check was issued in 1940. By 1945 there were 42 workers for every beneficiary. In 1950, sixteen-to-one. In 2010 there were only three workers for each person in retirement.
But the status quo is unsustainable. Some 10,000 Baby Boomers will be going on Social Security and Medicare every single day between now and 2030. By the time everyone in this big pig-in-the-python generation is drawing benefits, we’ll have just two workers per beneficiary – down from three-to-one now, five-to-one in 1960 and more than forty-to-one in 1945, shortly after Social Security first started supporting beneficiaries.
The math of the 20th century simply won’t work in the 21st. Today’s young are paying taxes to support a level of benefits for today’s old that they have no realistic chance of receiving when they become old. And they know it – just 6% of Millennials say they expect to receive full benefits from Social Security when they retire. Fully half believe they’ll get nothing.
Over the Horizon
Meantime, the cost of our programs for seniors will soon exceed half of the federal budget. This spending continues to crowd out budgeting for education, research and infrastructure – investments that would help build a better future for Millennials and their children.
At its core, this is a problem of generational equity. But it need not lead to a generation war. A war needs combatants. We find very little evidence from our Pew Research surveys that old and young are spoiling for a fight over these issues. To the contrary, they like each other too much. And nowadays more than 50 million, a record, are living in multi-generational family households, their fortunes braided together, because that turns out to be a good way to make ends meet in hard times.
If Americans can bring to the public square the same genius for generational interdependence they bring to their family lives, the politics of these issues will become less toxic and the policy choices less forbidding.
That’s a big ‘if.’ But it’s a start.