The United States Can Afford the Boomers

Abstract

In their recent book Aging Nation, Schulz and Binstock (2006) referred to of doom--academics, political figures, and journalists who argue that nation cannot afford retirement of baby boomers. As proof of their belief, these often point to projections showing a growing of older adults and a relative decline in of individuals of working age. Although they are not always consistent, merchants' underlying message is that we face a fiscal cancer that could have catastrophic consequences for our country (U.S. Heading for Financial Trouble, 2007).This is often accompanied by recommendations that we (partially) privatize social security and Medicare. This column examines these arguments and considers their implications for social workers. UNDERSTANDING DEPENDENCY RATIOS Underlying much of concern about population aging are projected changes in dependency ratios (Gee, 2002). One of best known of these is beneficiary-to-covered-worker ratio, which shows of social security beneficiaries supported by each 100 workers (individuals 20 to 64) (Reno 8: Lavery, 2006).This ratio is expected to rise from 29 in 2000 to 46 in 2030. Although these figures have generated much alarm, they are somewhat misleading. Specifically, they overlook that older adults are not only dependent age group. A more sophisticated measure is total age-dependency ratio, which includes not only older adults, but also individuals under age of 20 (Reno & Lavery, 2006).This gives us a much different perspective. It shows that we have already experienced worst of demographic shifts. In 1960 each 100 working-age people supported 90 dependents (people age 65 and older plus those under age 20); in 2030, they will support only 79. The point, of course, is that although aging population will increase, there will be many fewer young people than when boomers were growing up (Schulz & Binstock, 2006). Now, some might argue that we cannot really compare young people with older adults. After all, older adults are supported by government programs funded with tax dollars, whereas children generally receive support from their parents. This is true, but it misses point. The fundamental issue is our society's ability to support its dependents (Schulz & Binstock, 2006). Parents do support their children, but as taxpayers, they also finance programs that support older adults. Moreover, children are recipients of tax dollars. Public education, which primarily benefits young people, is financed by state and local governments (Reno & Lavery, 2006). This is not a negligible expense. Proportionally, increased spending on public schools to educate boomers was much greater than amount that will be needed to support them in retirement. Between 1950 and 1975, share of gross domestic product (GDP) going to public education increased by 2.8 percent; in contrast, between 2005 and 2030, share devoted to social security spending will increase by only 1.8 percent (Reno & Lavery). Furthermore, although the boomers came into world with nothing (Leone, 2005), they will leave behind tremendous financial and other resources. The total dependency ratio suggests that future is not as bleak as merchants of doom have argued (Schulz & Binstock, 2006).Yet, this ratio is also limited. Like beneficiary-to-covered-worker ratio, total age-dependency ratio is too abstract, that is, it considers older adults and young people as categories, not in terms of their actual lives. In reality, some older adults and young people are employed, and some working-age people are not (Reno & Lavery, 2006). A more useful measure is consumer-to-worker support ratio, which considers total of consumers, including working people, in relation to number of workers of all ages (Reno & Lavery, 2006, p. …