How and Why Does the World Need to Rethink Retirement?

A piece came out in the December 4^th New York Times with a title intriguing to me.  Unfortunately, Katie Robertson’s “Why the World Needs to Rethink Retirement,” after presenting a list of things it would be nice for retirees to have, became only a compendium of the current Social Security and Medicare equivalents in nine other countries – useful, but hardly suggesting revolution.  So how can we do that?

Until around 1860, Americans worked as long as they could, so there was no such thing as routine retirement.  The first such law was passed in 1861, allowing most naval officers to stop working at age 62.  Thirteen years later, a railroad, the Canadian Great Trunk, implemented the first North American private business retirement system.  In the 1880s, German chancellor Otto Von Bismarck created a state retirement program which was the first major plan to use the age of 65, which, as life expectancy there was then 45, had a rather different significance.

According to one source the proportion of American men 65 years and older working dropped steadily from 68.3% in 1890 to 41.8% in 1940, though another claimed observers disagree on how much, if at all, the rate of labor-force participation in older men declined between 1875 and 1935.  The same proportion for women followed no clear pattern, fluctuating between 6.1% and 8.3% from 1890 to 1940.  The largest single American retirement plan started in 1920 for 500,000 civil service workers.  Later in that decade, retirement became commonly viewed as a tool to reduce unemployment, and in 1935, implementation of the Social Security Act served to start the current era of aging.

Employment rates for older men dropped for the next several decades, but all who retired did not stay that way, as about 25% of those retiring from 1969 to 1973 had worked again for at least some time by 1979.  Around that time there was a backlash, with older people wanting to work equating their situation with those of blacks and women, wanting freedom with a lack of discrimination.  Serious concerns about retirement in general also characterized those years, with some thinking it was inefficient and economically destructive.  During the economic expansion of the 1980s and 1990s, more attention became paid to older employees in both commercial and academic sources.

Over the past few years, per Robertson’s article, the two main directions of national retirement programs have been toward closing gaps in coverage and increasing eligibility ages.  In most places, employer-provided pensions have become much rarer, though self-funding options, now in Canada, Australia, and The Netherlands as well as here, are appearing in more places.

While officials more uniformly recognize that some type of national retirement plan is necessary, they also are loath to allow all of the extra time from increased life expectancy to go toward sponsored idleness.  But retirement has still gathered a lot of that – while, despite a recent American dip, lifespans are near all-time highs almost everywhere, typical retirement and pension-onset ages are sometimes slightly higher than 65 but frequently lower.  The examples Robertson cited were 56 for men and 53 for women in Brazil, as low as 60 but going up to 62 for France, 60 for women and 65 for men in Great Britain, as low as 60 in Canada, 65 years and 6 months in Australia, 65 years and 7 months in Germany, 66 in The Netherlands, and still 65 in Japan.  With longevity at age 65 now eighteen years in the United States and higher elsewhere, since Bismarck’s time retirement lengths have jumped; as of 2010 the chancellor, to get the same relation between retirement and death times, would have to set the work-stopping age at 98. 

So where should we go from here?  Clearly, much older people should be fed and covered for health expenses, and, with the physical significance of being 65 today hardly the same as a century ago, postponing benefits is at least justifiable.  The difference between the mid-20^th-century situation and now, though, is that there is less demand for employees.  As above, a major reason for implementing Social Security in the 1930s was to cut back the number of workers, and if we were to start Medicare and other payments at, say, age 70, that would be the equivalent of increasing it – so let’s keep retirement age increases modest.  As well, the baby boom generation, perhaps more than any other, has blurred the line between main career and retirement years by not only working later but working off and on – that trend should continue with later cohorts.  Health care expenses have reached the point where it is somewhere between aggressive gambling and outright recklessness for most people middle-aged or older to not have insurance coverage, and Obamacare or whatever program replaces it seem likely to continue for all.  Accordingly, retirement is losing its meaning – and that is how the world, ready or not, will need to rethink it.          

A Perception Problem of Large Felines, and Other Species

In the Big Cat Republic, deep in the wild jungle, two different types of animals live together.  The lions and leopards generally get along well, often sharing dens and living happily ever after, and the laws call for them to have equal rights. 

For generations immemorial, though, that had not been the case.  Leopards had generally been considered inferiors, even by those in their own species.  The Big Cat legal system reflected that, and lions enjoyed much more freedom.  In particular, leopards were prevented, formally or strongly informally, from pursuing many ways of getting food, which the lions could do to the limits of their abilities and ambitions.  Lions often convinced leopards that they were incapable of doing the things they themselves did, and, through tradition along with the strong inertia characterizing interspecies change, that remained the way for untold ages.

Relatively recently, though, they had had a revolution.  When today’s elders had just finished their cubhoods, many leopards and a remarkable share of lions began publicly questioning the interspecies status quo.  Leopards should be equal, they said.  In a remarkably fast turnaround, laws were put into place, and, in far less than half of a normal leopard or lion lifespan, leopards were guaranteed the same privileges and opportunities as lions.  In the Big Cat Republic, it became the law of the land that leopards could hunt or gather edibles in all ways allowed to lions.

Of course, after untold generations of tradition, not all lions or leopards internalized the changes.  Many lions still tried to stop leopards from getting the food they wanted.  When their actions were overt, they were found in violation of the law and penalized.  Large numbers of leopards, themselves, had been reared in a different world, and continued acting as if they were limited, while others avidly pursued the food acquisition techniques denied to their ancestors.  In the meantime, lions were not only free, but were still expected, far more than for leopards, to get as much food as they could. 

As the interspecies revolution became solidified, lions and leopards wanted to know how they, compared to each other, were faring in general.  Overall statistics showed that leopards, who were getting an average of two-thirds as much food as lions soon after the laws were changed, were still only at four-fifths half of a lifetime later. 

Was this a problem, and if so, what was causing it?  Lions and leopards disagreed within and between themselves, but predominant communication said that it must be because leopards were still being discriminated against.  Other statistics, though, told a different story.  More leopards than lions, the numbers said, made life choices to seek food in ways that were easier, safer, less stressful, more personally fulfilling, and gave them more time to do other things.  Perhaps more than any other factor, many leopards sharing dens with lions continued to let them gather most of the food.  As a result, leopards, again on general average, lived almost 10% longer than lions, something treated as a fact of life by both and never, even by lions, publicly cited as evidence of unfair treatment. 

As the evidence became clear, and more and more lions and leopards with modern attitudes replaced those with others, did the Big Cat Republic animals make their peace with the issue and recognize the disadvantages and advantages accrued by leopards as mainly a matter of valid personal choices?  Unfortunately not.  Leopards with the rearing and preferences to point them toward being equal hunters with lions showed no understanding of why others were not the same – it seemed incomprehensible to them that many of their fellow country-leopards preferred to raise cubs, feed in less life-dominating ways, and depend more on lions.  As a result, they continued publicizing the food gap and maintaining, despite the laws being firm and penalties severe, they as a species were still being heavily discriminated against.  They were either unaware or not admitting that when equally prepared for and focused on getting large amounts of food, there was no statistical gap between them and similar lions.  And many lions and leopards following this issue, as susceptible to logical fallacies as were certain tall simian bipeds, believed that, despite small and ever-shrinking amounts of true inequity against leopards (and not all Big Cat interspecies discrimination went in that direction), that was obviously the cause. 

Will the good felines of the Big Cat Republic end this worry?  I hope so.  And if they do, maybe there is hope for Americans to properly understand earnings differences between the sexes.

December Jobs Data: Another Strange but Good Month – Per AJSN, We’re Now 15.8 Million Jobs Short

The headline number in this morning’s Bureau of Labor Statistics Employment Situation Summary was indeed an eye-grabber.  With economic and governmental turmoil and a sharply dropping stock market, I thought the projection of 177,000 net new nonfarm positions was high.  Not only was it not, it was more than 100,000 short, as that came in at a huge 312,000. 

Did the other numbers follow?  Not like that, and in many cases not at all.  Both seasonally adjusted and unadjusted unemployment were up 0.2%, at 3.9% and 3.7% respectively, with the adjusted number of jobless up almost 300,000 to 6.3 million.  While the labor force participation rate gained 0.2% to 63.1%, the employment-population ratio sat at 60.6%, meaning the outcomes were split for the two statistics showing how common it is for Americans to be on labor’s front lines.  The count of people officially jobless for 27 weeks or longer held at 1.3 million, but those working part-time for economic reasons, or holding on to part-time opportunities while looking unsuccessfully so far for full-time ones, fluctuated to 4.7 million, down 100,000 after going up twice that last month.  The second most striking change, though, was also positive, as private nonfarm payroll wages were up 11 cents per hour, or about double the inflation rate, to reach $27.48.

The American Job Shortage Number, the measure showing latent demand for work, was hurt by rises in both the numbers of unemployed and those wanting opportunities but not looking for them for a year or more, and increased 328,000, as follows:

Smaller but substantial offsets to the AJSN’s upsurge were changes in the count of those discouraged, off 78,000, and a crash in the number of those in the armed forces, in institutions, or off the grid, over 1 million lower.  Compared with a year before, the AJSN is down 446,000, helped most by about 250,000 fewer unemployed, 100,000 fewer discouraged, and 2.6 million out of the miscellaneous category above. 

Was December a good month?  With that stunning gain in jobs, certainly.  Was it a great month?  No, not really.  The rises in the unemployment rates, which seem caused by the common good-times effect of more people joining the labor force than can get work, do not bother me.  My cause for concern is, despite clear-cut overall prosperity, visible in several of the fringe numbers, specifically long-term unemployed, working part-time for economic reasons, not wanting a job, and, more than anything else, the over 3 million claiming interest in working but not seeing fit to look for it for a year or more.  The lack of progress in these areas say that our continued employment growth is leaving too many people behind.  It does no good for those past the half-year mark of collecting unemployment benefits (or seeing them end), proving themselves at short-hours positions while getting nowhere at working as much as they want, or keeping themselves on the shelf despite harboring hopes of finding something suitable which never seems to materialize, to read about opportunities elsewhere, in other industries, or at other levels.  What is happening with these people needs more attention.  In the meantime, though, the turtle, once again, took a step forward.