Generation Me and Social Security

Social Welfare Policies

Generation Me and Social Security

Jahsmine Victor

Foundations of Social Welfare

Wednesday 6:00pm

Abstract

The idea of Social Security has been one that has in the past been very beneficial. When it was first created it objectives were clear and motives were good. The reason it has stood the test of time is because of its alarming statistical boost on the elderly and poverty rates. The idea is simple: pay if forward and receive the same later on. Each generation prior has benefitted from social security. While each generations youth seems to wrapped up in the current trends and uninterested in financial security this paper focuses on how the alarming freight train that is Social Security should be the primary concern of Generation Y. Not only will this paper explain how Social Security needs to be updated but it will explain how Generation Y needs to be the one who pushes for this change in Social Security or this program will end up robbing us with no return.

Generation Me and Social Security

Introduction

There are two major types of social welfare in America. These two major categories of programs are social insurances and public assistance that are cash supported programs. The difference between these two types of programs is that public assistance is "based on the financial need of the individual or in other words known as welfare", and social insurances are "based on prior earnings and payroll contributions of an individual". This paper will focus on social insurances and more specifically Social Security. We as American citizens see it as a social right to participate in this program. This program is not focused or based on financial need. The funds for the Social Security program comes from the payrolls of American Citizens. Simple put the program begun under the Nixon Administration and places a tax on the payroll of American citizens which is shared by the employee and employer. Taxes are collected from payroll from a minimum of 10 working years of a citizen in order to receive benefits. The amount that an individual receives is based on the earnings collected. Thus, the more the person makes the more taxes they pay and the more that is received at the end and vice versa. Once the individual enters the retirement age of 65 they instantly receive "old age benefits due to the fact that they are unable to maintain a substantial job because of their age. The main reason Social Security has been so effective is it's alarming statistical boost in anti- poverty. As the article states, " In 1992, only 14% of people ages 65 or older lived in poverty in the U.S and this is due largely to social security." The simple fact is that those who receive Social Security are places over the poverty line due to this program.

The Major Flaw

One of the most alarming issues with Social Security is that it no longer corresponds to modern day statistics. The fundamental principle of social security has been a "pay- as- you-go system". This means that the funding for Social Security is cyclical. The current members of the workforce pay for the retiree's and as those in the workforce age the next generations workforce pays for the new retiree's. This structure relies on the fact that the ratio of worker to retiree is not too lopsided on the retiree side: which is where the heart of the problem lies. As the article states "In 1950, there were .14 retirees per worker in the US. By 2020, with the aging "baby boomers", there are expected to be .29 retiree's per worker in the U.S and by 2040, 0.39 retiree's per worker", one can start to see how changes need to be in place now. With the past years economic devastation many not only lost their jobs but also many companies downsized and many employers received less. Receiving less and removing those workers who are key to the economic Ferris Wheel that is this program places a major damper on those involved. While many administrations have tried to think of ways to stop this freight train such as changing the retirement age and raising the taxes, but nothing has changed thus far.

Generation Me

It seems as though the amount of young people in high school and college who have jobs is rising. At with each paycheck they receive many of them ignore/ are not aware of a tax placed on their pay called FICA which pays for Social Security. Many of young people don't even know what Social Security is let alone why they are being taxed, and quite frankly don't care too much. The saddest part about this blind ignorance is that our generation is the one who won't get to receive any benefits from the years of taxing. Now that the number of workers to retiree's is dwindling from 42:1 to 3:1 the program will continue to pay out more than it takes in until it goes bankrupt in the projected year of 2040 which is well before the age of retirement for Generation Y aka me. As Washington continues to ignore this problem like ignorant high school kids who have better things to do we are the one who are suffering the most and not even realizing it. Basically, if nothing is done we would have been robbed our entire working lives for no reason and will be receiving nothing in return.

Conclusion

While most baby boomers found the Occupy movement childish and winey, in reality its intentions were in the right place. It called on Washington and young people to wake up and take a hard look at the financing for Generation Y. Social Security is a societal right and denying that right to a generation who has paid their dues will arise a major economic problem in the future. Social Security must be fixed now in order for Generation Y to equally receive their societal benefits. If we allow the clock to run out on Social Security without fixing the problem once that timer goes off there will be nothing left to pay our generation in their old age.

Social Welfare Policies

Generation Me and Social Security

Jahsmine Victor

Foundations of Social Welfare

Wednesday