The Oz-onomics Podcast

The Aging Labor Market

March 1, 2020

The purpose of this podcast is to inform listeners of the importance of seniors to continue working to save the social security system. It discusses how seniors continuing to work will give the government more time and more funds to then fund those seniors retirement once they finally retire. The problem has occurred because the baby boomers are all retiring at the same time which means the amount of people working and paying into taxes is dramatically decreasing and the amount of people taking the benefits is dramatically increasing. Listen to this podcast to learn why we need to give incentives and encourage our seniors to continue working a little longer.

Podcast by Mallory Jennings

Transcript

[MUSIC]

Kate: Hey everyone. Welcome to Oz-onomics, a podcast created for and by students in introductory economics classes at SUNY Oswego.

GABRIELLA: In this series, we'll have discussions about various economic principles and how they apply to our day to day lives.

KATE: Are you ready?

GABRIELLA: Let's go.

[MUSIC]

Hi, I'm Mallory Jennings and in this economic podcast we will be discussing the effects of retirement age on the labor market and the podcast titled the aging labor market. So you might be asking yourself what is a labor market in terms of economics a labor market is the availability of Employment and Labor in terms of supply and demand. Matthew talked to most adults, they cannot wait to retire and start collecting their social security. It's finally time for them to kick back on the beach and relax. So Social Security is a government system that provides monetary assistance to people with inadequate income or no income. Therefore, the retired would be benefiting from social security because they are have no income coming in. According to national academy of social insurance, 169 million Americans pay Social Security tax and 61 million collected monthly. You can see this is a good ratio because more people are paying into it than what's being taken out. As of 2017, retired people collect about 1300 dollars a month, depending on the assistance that they need. Many people want seniors to stop working because they can collect this social security and then open up jobs for different people that need that, for example, the younger population, those college graduates that need a job, you're opening up spaces for them or adults who maybe want a promotion. Typically, the senior population are the ones that are holding higher positions in a company because they've been there for long and certain adults are seeking those positions. However, seniors still working are helping themselves employers and our economy. tax revenues rise with them working, which makes it easier for the government to fund Social Security, Medicare and other old age programs. The baby boomers who are people born between 1946 to 1964 Our huge population, there's 76.4 million of them, and they're hitting the retirement age. This is putting a lot of strain on our social security system because there isn't enough money in the pot to pay them. If they continue to work, it gives the government time to collect more social security. And they receive less benefits for still working. So it's buying the government time to build this problem that we have. At 62 years old, you can start collecting Social Security early. But with that you are also permanently getting their social security reduce 30%. So this is a an incentive that the government has put in place to can urge people to continue working so that it's helping our Social Security system. So why are we in this economic problem? Most people are probably asking how did we let ourselves get here into this problem where we don't have enough Social Security And the reason is, is that as the baby boomers retire, the amount, they're the benefits they're receiving increase, while the people paying into taxes decrease. So a huge part of our population is retiring, they're all going to want their social security. But now we also have a lot less workers who are paying that Social Security tax out of their paycheck. Also, Americans are having fewer children than they used to, which is less people paying into those taxes, and people are living longer, which means there's more time with their social security and receiving those benefits. When social security was first implemented, people weren't living this long, and we weren't expecting to have to love them for as long as we are. In 2018 16% of the population was over the age of 65, which is the collection age for Social Security. By 2060. It's estimated that 23% of the population will be over 65, which means they can collect Social Security. That's a 7% increase which may seem small, but that's Huge in terms of our government economics. And while this is happening, the working population is getting smaller. Right now the working population is about 62% of our population. And by 2016, it's only going to be 57%. So this is really going to mess up our ratios here as the beneficiary population is increasing, and our working population is decreasing. Social Security Administration's estimates that by 2037, our social security pot will be depleted and not able to pay all the people that should be receiving it if we don't fix this, but there is hope. We still have about 20 years to fix this problem. Here's how we can do it. Increase the retirement age. And yes, nobody wants to hear this because everyone wants to retire as soon as they can. But since we're living longer, it really only seems fair. We can increase taxes so that we have more money in this pot, and we can cut some of the benefits that we're providing to people to reduce the hospital it takes to run the Social Security system. And we're incentivizing seniors to work longer, we need the labor market to stay alive to keep the appropriate ratio of worker to beneficiary. Seniors working longer so that seniors are going to work longer so that in a few years when they want to retire, there's actually money for them in that pot. And many people will argue and say, but seniors deserve to retire, they've done their service and let them sit back, enjoy life and be physically healthy. But jobs nowadays are a lot less physically demanding than they used to be a lot of jobs or desk jobs. So really, it's okay for their health to be working a little longer. And also with medical advancements, like I said earlier, we're living so much longer than we used to be. And we're so much healthier, so it's okay for them to still push a few more years because the lifespan in general is going to be longer. So to accommodate changing times in society, we need people to continue working and we need that labor market together, continue to age. Thanks for tuning in. Bye

[MUSIC]

MICHAEL: There you have a folks on another edition of Oz-onomics, where economics becomes easier for Oswego students to understand where you get your money that you pay for your tuition worth. If you feel like being ahead of the curve, grab a seat, grab your phone, shift your fingers left and right. And download Oz-onomics on the podcast app. See you later.

The introduction to this podcast was provided by Kate Soanes and Gabriella Schaff. Michael Kolawale provided the outro. Music by Lobo Loco.

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