Actually, The Retirement Age is Too High
by James K. Galbraith
THE MOST DANGEROUS conventional wisdom in the world today is the idea
that with an older population, people must work longer and retire with
This idea is being used to rationalize cuts in old-age benefits in
numerous advanced countries -- most recently in France, and soon in
the United States. The cuts are disguised as increases in the minimum
retirement age or as increases in the age at which full pensions will
Such cuts have a perversely powerful logic: "We" are living longer.
There are fewer workers to support each elderly person. Therefore "we"
should work longer.
But in the first place, "we" are not living longer. Wealthier elderly
are; the non-wealthy not so much. Raising the retirement age cuts
benefits for those who can't wait to retire and who often won't live
long. Meanwhile, richer people with soft jobs work on: For them, it's
an easy call.
Second, many workers retire because they can't find jobs. They're
unemployed -- or expect to become so. Extending the retirement age for
them just means a longer job search, a futile waste of time and
Third, we don't need the workers. Productivity gains and cheap imports
mean that we can and do enjoy far more farm and factory goods than our
forebears, with much less effort. Only a small fraction of today's
workers make things. Our problem is finding worthwhile work for people
to do, not finding workers to produce the goods we consume.
In the United States, the financial crisis has left the country with
11 million fewer jobs than Americans need now. No matter how
aggressive the policy, we are not going to find 11 million new jobs
soon. So common sense suggests we should make some decisions about who
should have the first crack: older people, who have already worked
three or four decades at hard jobs? Or younger people, many just out
of school, with fresh skills and ambitions?
The answer is obvious. Older people who would like to retire and would
do so if they could afford it should get some help. The right step is
to reduce, not increase, the full-benefits retirement age. As a rough
cut, why not enact a three-year window during which the age for
receiving full Social Security benefits would drop to 62 -- providing
a voluntary, one-time, grab-it-now bonus for leaving work? Let them go
home! With a secure pension and medical care, they will be happier.
Young people who need work will be happier. And there will also be
more jobs. With pension security, older people will consume services
until the end of their lives. They will become, each and every one, an
A proposal like this could transform a miserable jobs picture into a
tolerable one, at a single stroke.
© 2011 Foreign Policy
James K. Galbraith teaches at UT-Austin and is the author of The
Predator State: How Conservatives Abandoned the Free Market and Why
Liberals Should Too.