The Congressional Research Service has recently published "Income and Poverty Among Older
Americans in 2008" which I found at http://benefitslink.com/articles/guests/RL32697_Oct_2009.pdf.
It contains some sobering statistics, ones which ought to get most of us thinking about whether the way we've structured our economy and our society is serving the common good, or is designed to meet some other objective.
Many studies find that older people have far more in assets than younger people, and to some extent, that makes a lot of sense; they've worked for a long time to accumulate what they've got, and we might accept that as a sign that hard work is rewarded, and that savings are rewarded. If the older people have a huge amount of assets, and our younger people must mortgage themselves to purchase from their elders a place to live, perhaps this is not so good.
Here are some of the highlights of the CRS study:
1. In 2008, Social Security paid benefits to 86% of
individuals aged 65 and older and to 89% of households in which the
householder or the householder’s spouse was 65 or older.
2. Social
Security is the largest single source of income among the aged.
- Sixty-nine percent of Social Security beneficiaries aged 65 or older
received more than half of their income from Social Security in 2008.
- For 41% of elderly recipients and 28% of
elderly households, Social Security accounted for more than 90% of
total income in 2008.
3. Of
the 37.8 million Americans aged 65 and older who were living in
households in 2008, 20.4 million (54%) received income from assets,
such as interest, dividends, rent, and royalties. Most received
small amounts of income from the assets they owned.
4. Among individuals aged 65 and older who
received income from assets in 2008, half received less than $1,054.
5. Of households with a householder or spouse aged 65 or older, 59%
received income from assets in 2008. Among these households, median
income from assets in 2008 was $1,542.
6. Median income for individuals over 65 varied by age:
- 65 to 69 . . . $22,057
- 70 to 79 . . . $17,573
- 80+ . . . . . . $16,491
That means that half of each age group receives more, half less. And that takes into account income from all sources.
7. Asset income for individuals over 65:
- 65 to 69: 55.2% have asset income; half of them have less than $1,015
- 70 to 79: 54.2% have asset income; half of them have less than $1,069
- 80+: 52.3% have asset income; half of them have less than $1,150 in 2008.
8. At the household level among households whose head is over 65:
- 65 to 69: 60.4% have asset income; half have less than $1,500 (and the average is $10,020 per household)
- 70 to 79: 58.6% have asset income; half have less than $1,600 (and the average is $10,217 " ")
- 80+: 57.55 have asset income; half have less than $1,500 (and the average is $8,236 " ")
9. Median and Mean Social Security income are not all that different from each other, for elderly individuals:
- 65 to 69: mean $13,010; median $12,480
- 70 to 79: mean $12,786; median $12,113
- 80+ mean $12,818; median $12,557
The proposed $250 one-time payment would be about the equivalent of an extra week's worth of Social Security.
10. At the household level, Median and Mean Social Security income are further apart
- 65 to 69: mean $17,314; median $15,804
- 70 to 79: mean $18,256; median $16,229
- 80+ mean $16,589; median $14,400
And clearly, more than half of these households are "below average" -- so when you hear about "the average household" recognize that only a minority are above average. Lake Wobegon in reverse.
Are we structuring ourselves appropriately? I don't think so. I think Henry George pretty much got it right. We have permitted the creation of a machine which concentrates wealth in a small percentage of our population, leaving the rest to scramble and try to cope -- and blame themselves for not being in the top few percent, above the wedge George called attention to.