Tuesday, February 14, 2012

Early Retirement vs. Long Term Unemployment

Many Americans (usually socially conservative Republicans) who still need to work (and might hate their jobs) think that people who retire on Social Security benefits, rely on disability payments, or need an unemployment check, are living the high-life on money they don't deserve. These Republicans don't realize the downside of being outside the working environment.

The Republicans just don't seem to understand how those without a job feel: the feeling of a sense of separation from a previous active life, that gives one a better understanding about why so many seniors are taking anti-depression medications. It seems like one's value to others, as well as their own self esteem, have dropped off the map. Where are the challenges, the fun, and the involvement? Life does not have much shape anymore, and it can be very depressing, especially for senior retirees dependent on Social Security, the poor, the disabled, and the unemployed. They aren't all partying like it's 1929. But the GOP thinks so.

Before the Republican-caused economic crash in 2008, many people who could comfortably retire became bored. There was only so much one could do around the house. There was only so much TV one could absorb. There was only so much beer one could drink. There was only so much napping one could do.

Many people missed the routine of going to a job and the comradely they found with their co-workers in a work environment. So they re-entered the work force, even if it was for a low-paying and part-time job that they didn't financially need. But it's not the same any more because even these menial jobs are now being highly prized by teenagers, the unemployed, and those who need two or three of these jobs just to make ends meet.

Many older workers who were laid off after the economic crash, if they were 62, might have opted for a smaller check from Social Security with an early retirement after their unemployment benefits expired. But those who were too old to be re-hired, and ended up long-term unemployed, and were not old enough to qualify for their pensions or Social Security, they got trapped between a big rock and very hard place.

But some people who still need to work (and every single Republican) chastises those that can't work any longer, or are without a job and can't find any work at all (those who may need to rely on government assistance for their survival).

And the nationwide anti-union push by state legislatures for "right-to-work" laws isn't helping either. Union-busting legislation never promotes employers to hire more, only an increase in demand for products will promote job growth. More low-paying jobs will not increase consumer demand, but more jobs paying better wages will create more jobs, and therefore more consumer demand. (Economics 101)

It's almost as though the GOP, and those who still need to work, almost seem to resent and envy those that don't or can't work any longer. They would rather lump the poor and unemployed into one big group and accuse them all of "gaming the system" and living on government "hand outs" - - as though they were all buying big brand new Cadillacs and were on a constant vacation. But the poor and unemployed aren't living this ridiculous GOP fantasy.

And despite what most Republicans still ignorantly believe, it's not just a bunch of lazy and dirty young black guys dressed in torn and shabby clothes and sitting on the sidewalk drinking cheap wine out of a brown paper bag while begging for change. Today it's usually a middle-aged white guy that was once a middle-class worker until 3 years ago.

A study by the Center on Budget and Policy Priorities found that the poorest American households, the bottom 20%, received just 32 cents of every dollar of all government benefits distributed in 2010. Most went to the elderly and disabled, who received the bulk at 70% (Social Security, Medicare, etc.)

The New York Times reports that of that bottom 20%, African-Americans make up 22% of the poor, but only receives 14% of those government benefits - - close to their 12% total population share.

Whites, who make up 42% of the poor, received 69% of those government benefits - - again, much closer to their 64% total population share for TANF, veteran's benefits, unemployment benefits, Medicaid, food stamps, etc.

The share of benefits flowing to the least affluent households, the bottom fifth, has actually declined from 54% in 1979 to 36% in 2007, according to a Congressional Budget Office analysis published last year.

Yet many people say they are angry because the government is wasting money and giving money to people who do not deserve it. But even many of these previous critics are now finding themselves more and more in need of some kind of financial assistance from the government. More middle-class families have been increasingly landing in the government's safety net as the middle-class has shrunk. ("Its the economy stupid!")

Rick Santorum has warned of “the narcotic of government dependency” and said that recent expansions in the "reach of government" and the spending behind them are "systematically destroying the work ethic.”

Newt Gingrich has compared the safety net to a spider web and President Obama as the "food stamp king".

Mitt Romney recently warned of "the dangers that the nation faces from the encroachment of the Entitlement Society", predicting that in a few years, "we will have created a society that contains a sizable contingent of long-term jobless, dependent on government benefits for survival. Government dependency can only foster passivity and sloth." Mitt Romney has said the nation must choose between an “entitlement society” and an “opportunity society.”

All the GOP candidates, including Ron Paul, have promised to cut spending (for Social Security, Medicare, TANF, Medicaid, and food stamps, but not corporate subsidies or defense spending) and further reduce taxes...which they all claim are now too high, when in reality, are actually at historical lows ever since the Bush tax cuts. The Republicans and Tea Party are betting that the voters are either ignorant, or will just believe the GOP's lies.

Since the Republican-caused economic crash in 2008 (before Obama took office), the problem by now is very familiar to most. Then the politicians (mostly Democrats) needed to expand the safety net because of high unemployment (etc.); but this was done without a commensurate increase in tax revenues, a primary reason for the government’s annual deficits and mushrooming debt. Think of the Bush tax cuts, that the very wealthy primarily benefited from - - paying a less effective tax rate than most middle-class workers.

And over the next 25 years, as the population ages (Baby Boomers) and medical costs climb, the Congressional Budget Office projects that benefits programs will grow faster than any other part of government, driving the federal debt to dangerous heights.

Americans are divided about the way forward, but 70% of respondents to a recent New York Times poll said the government should raise taxes. Usually it's just the Republicans that oppose raising taxes, but even Republican voters are now saying we should raise taxes on millionaires and billionaires.

The Republicans consistently argue about the debt to "our children and our grandchildren", but what about the reality of life for the poor and unemployed in American in the here and now, and not far off into some distant and incomprehensible future? What about the children and grandchildren who are suffering today?

According to the U.S. Census Bureau, almost half of all Americans lived in households that received some type of government benefits - - 44.5% in 2006 under Bush before the recession to 48.5% during the recession in 2010...a reflection of the deterioration of the middle class.

If "job creators" created enough fair-paying jobs for 15 million unemployed Americans, we wouldn't need Mitt Romney's “entitlement society” and we'd have an “opportunity society.” Mitt Romney earns millions of dollars every year from "investments" and pays a lower tax rate than most middle-class Americans, but how many jobs has HE been creating every year for the past 10 years since he left Bain Capital? None, other than his "undocumented" and under-paid housekeepers.

Few federal programs are more popular than Medicare, which along with Social Security, assures a minimum quality of life for older Americans. But the government projects that Medicare enrollment will grow by roughly one-third as baby boomers enter old age.

Only 22% of respondents to the New York Times poll correctly identified Medicare as the fastest-growing benefits program. A greater number of respondents, 27%, because of the Republican's bashing, wrongly thought it was programs for the lazy poor. The GOP has blamed Obama and the poor regularly, almost on a daily basis.

There has been much bitter complaining by the GOP about "unconstitutional government mandates" regarding ObamaCare®, but wouldn't it be similar to Medicare (as in Medicare for all) for which we're all required to pay Medicare taxes? Aren't these taxes also a "mandate"?

But part of the problem is that Medicare premiums are not nearly high enough. Why is that? As former White House economic advisor Jared Bernstein points out, "One reason why the incomes of the wealthiest households have surpassed the rest is because of the concentration of non-wage income, like capital gains and dividends. 86% of all capital gains income accrues to the richest fifth of households. This income receives extremely favorable treatment through our tax code—it’s currently subject to a top rate of 15% instead of the 35% levied on ordinary income."

And this massive amount of personal income that's raked in as "capital gains" by the top 20% is not subjected to Medicare or Social Security taxes. And even "ordinary income" that's taxed at the top marginal rate, is capped at the first $110,000 for Social Security. The wealthiest among us don't want to contribute their share to Medicare and Social Security, because they are so rich, they don't need these programs, and think nothing of the common good for all Americans. To them and their GOP enablers, this is labeled as "redistributing the wealth" or "class warfare". But in reality, it's always been about redistributing the wealth upwards to THEM, and it's THEM who have always been waging class warfare on the middle-class and poor.

The Republicans, the top 1%, and the major corporations have accused the elderly, the poor, the disabled, and the unemployed of "gaming the system", when in fact it has been the lobbyists and Republicans, on behalf of the top 1%, who have been vastly gaming the system - - even with illegal tax evasion.

Senior citizens struggle day-to-day to barely survive on Social Security benefits, and struggle to remain healthy on Medicare. Millionaires and billionaires don't struggle for their survival, and most don't want to pay any more to the social safety programs than they absolutely have to - - and only do when they're forced to by tax laws mandated by congress. Millionaires and billionaires don't want the lazy, the poor, drug addicts, the disabled, winos, and the elderly "living out of their wallets".

Since the Republican-caused Great Recession, many older workers 62 years of age and older who were laid and forced into early Social Security retirement, or were disabled and qualified for SSD, aren't near as bad off as those who are 45 to 62 years old and were laid off over 2 years ago. They have already exhausted all their unemployment benefits and because of their age and lack of ANY available jobs, they still can't find work.

Contrary to what conservative think-tanks like the Heritage Foundation likes to proclaim as "fact", people do not magically find jobs when their unemployment insurance runs out. If they're lucky, and have children, they might qualify for TANF (financial assistance) of about $400 a month in "welfare" benefits, but only for up to 4 years. If they don't have children, the best they can expect and hope for is food stamps and state Medicaid if they need to see a doctor.

But the Republicans don't even want them to have that, and say the unemployed are all just "gaming the system", and in many states Republican legislatures are now requiring people to take drug tests. 15 million Americans are out of work, and only 3 million jobs are available, but the GOP thinks most Americans would rather stay home, collect food stamps, and take drugs. (In a "tit-for-tat", now there's legislation being put forth by a Democrat requiring members of Congress to take a drug test too.)

This week House GOP leaders announced they were putting forward a plan that would extend the payroll tax cut for 10 months, but it would not include an extension of unemployment insurance benefits, or what is known as the "doc fix", a measure needed to prevent dramatic cuts in Medicare reimbursements. But we could always expect something like this from the Republicans. Now Congress is all set for ANOTHER standoff.

On a brighter note though, recently there's been more talk about "in-sourcing" more jobs and more discussion about raising the minimum wage, but it will be too little too late for those who are 45 and older - - especially if they have already been unemployed for over two years. Those people will still need government "entitlements" - - even unemployed Republican voters (those who hate BIG GOVERNMENT for others, but have no complaints at all when they find themselves in need.)

By the way, Pepsi is planning on cutting 8,700 jobs. Maybe more Republican critics of BIG GOVERNMENT might need to apply for government hand outs unemployment insurance benefits if they are too young to retire, but can't even get a job at McDonalds.

Despite what Republicans in congress, conservative talk show hosts, and right-wing bloggers are saying, most of the unemployed Americans today are not sitting at home waiting for an unemployment check, because their unemployment benefits have already expired a long time ago.

Most of these long-term unemployed Americans now need food stamps just to eat. And just like those who were forced into early retirement, they aren't partying like it's 1929. If they're like me, they just sit in room all day long with the TV on - - because they can't afford to sit at a bar (or on a sidewalk) drinking cheap whiskey or wine all day long, let alone buy any half-way decent drugs. But the GOP wants everybody else (who still has a job and still needs to work) to think we do.

Sign the petition: We Need Jobs Now, because labor is a perishable good - - and the GOP would rather debate birth control, rather than put Americans back to work. Millions of unemployed Americans are too far away from retirement age, so hopefully most of them will find a way to survive until then, if the Republicans will allow them to.

NOTE: A woman named Alana Semuels wrote an article for the L.A. TIMES in 2010 about the long-term unemployed. Now she is writing a new piece about the "social safety net", as well as a piece which she may write with MSNBC's Ed Schultz. Contact her below if you wish to contribute your own story about being one of the long-term unemployed.

Alana Semuels
Staff Writer
Los Angeles Times
202 W. First St.
Los Angeles, CA 90012


  1. - - UPDATE - -

    President Obama Presses Payroll Tax Cut and Unemployment Extension


  2. Either the payroll tax funds Social Security, or it doesn't; and, if it does, then it must be fully contributory on both sides-of-the-fence (employers AND employees).

    I've seen, first-hand, in America and abroad, how non-contributory retirement/pension plans end-up destroying themselves (and those who "buy-in" to them).

    If I'm wrong, correct me: DJPM, 60, unemployed computer systems administrator, hoping to hang-on until early Social Security.

  3. I learn what is Retirement Pension Plans but i have one doubt this pension plan has two types one is conventional pension plan invest and ULIP or market linked pension plans which is best pls give detail ........