My post is a reaction to this opinion piece in today's NY Times, Can America Age Gracefully? While the title of that piece seems even handed, I felt while reading the body of the piece that I was hearing an argument I'm afraid we'll be hearing quite a bit from here on out. To wit, senior citizens are social leeches, sucking resources out of the economy, with those resources to be used for their healthcare and their living expenses. Implicitly, then, it would be better if the senior citizens as a group pulled a Kevorkian, thereby relieving the rest of society of this burden.
The issue has always been with us, but it is exacerbated as of late by the underlying demographics. Retired people are living longer now and there are fewer working age people per retired person. One might reasonably ask whether sufficient increase in worker productivity could offset these demographic trends. Let me point out the productivity increases are not uniform across the board and in our system as it is presently configured, there are income caps to FICA contributions. If it is the very highly paid workers who generate most of the productivity increases, which in our knowledge economy makes sense to me, then it is they, their co-workers and their employers who capture these gains. The system that supports senior citizens doesn't benefit so much.
Given that, one might then ask where the senior citizens themselves might produce productivity gains, by doing socially useful work in some manner that they aren't currently doing, but the system at present doesn't encourage that. Might there be changes made in social arrangements that would produce such productivity gains? Let me unpack that question a little and consider what I have in mind.
To do the unpacking, I will bring this down to my own recent experience doing volunteer work in support of Universal Love Alliance, a human rights organization in Uganda. I had no prior experience working with with a human rights organization, so it might seem that what I was doing was going back to square one. But what I found is that much of what I do is ghostwriting on behalf of ULA, grant proposals and correspondence with important contacts give two examples of that, and my prior experience in higher education was quite relevant for that. So, I was well situated to do this work, skill-wise. Of course, as a volunteer, much of the time I want to do the work. (There are the occasional squabbles with work, ULA is no different that way.) If we're going to extend this example to other senior citizens, would they too volunteer, or must they be paid, or in some other way be coerced? Let me get to that question in a bit.
Readers will likely be familiar with the Peter principle, where in a hierarchical organization a person rises to their level of incompetence. It is meant somewhat tongue in cheek, but also has more than a little validity since being a good performer in the prior job is no guarantee of performing well in the job that's the next step up the ladder. I'm not yet ready to offer the following up as a principle, but I think it can be said that often retirement is the next phase after rising to that position of incompetence. Climbing the ladder comes with increases in pay at each promotion. The person may very well still be productive at rungs lower down the ladder, but the person would find it insulting to be paid less than before. So that rarely, if ever, happens within the same organization.
Aging may, however, impact productivity in ways that should be accommodated. I, for example, like to take a nap sometime during the day. Further, I know how much stress I experienced when I was a campus administrator and I really don't want to have ongoing stress of that sort again. Part-time work might be a better fit for me and for many other senior citizens, for these sort of reasons. Part-time work is not the norm, however. So the system would have to modify to accommodate that.
Let me make two more observations about the nature of work for senior citizens. Remote work done online seems here to stay. It existed before the Pandemic (and indeed my volunteer work with ULA is in this category) but it became mainstream in the last few years. It might be a huge enabler of work done by senior citizens, as it cuts out so much of the hassle of work done at the office. Second, and although the current unemployment rate is quite low, 3.8% in August, it might be better to conceive of the work that most senior citizens would do as transfer of their human capital to later generations, rather than as substitutes for these later generation workers in the labor force. How this transfer, i.e., education, would occur I will leave to a subsequent post. Let me simply note here that young people today, in general, with their heads in their phones have poor schmooze skills. Baby boomers, in contrast, generally like to schmooze, and if the number of participants is low enough Zoom chats are a reasonable alternative to face-to face for such schmoozing to occur.
Now, let me get to this issue of whether the work would be for pay, purely voluntary, or have some elements of coercion to it. First and foremost, this should depend on the income situation of the senior citizen. I would guess there is a strong positive correlation between those with substantial human capital and those who are financially comfortable. It would be great if people in this category would willingly volunteer. But I wouldn't count on that. So, let me mention a practice with funding Medicare that those who are not comfortable financially or are not yet retired might not know about. It's called the Medicare Income-Related Monthly Adjustment Amount (IRMAA). It is consistent with the principles of progressive taxation, which I subscribe to. So, what I'm arguing here is again consistent with those principles, but this time the payment would be in kind.
This sketch makes the ideas seem simpler than they actually are. A real challenge will be in matching the senior citizen to a productive use. What's needed is kind of a massive employment agency, but one that also tracks the effectiveness of matches ex post, to see whether productive outcomes were indeed obtained. Further, this organization needs to determine up front whether the senior citizen does have productive human capital to be exploited and whether the senior citizen's health will enable that to happen. How that would occur is beyond me just now.
Yet I wonder if I've written enough here that is effective to convince at least some that the senior citizens as social leeches view is too grim and that we can do better if we put our minds to it.
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