On Unemployment and Social Security

[Japher]

Sitting with my parents and a couple of their friends the other day they all started talking about the best age to start drawing on Social Security. I didn't care about at what age they started drawing on, but more so about when they started drawing on it; before they retired.

I likened drawing SS while fully employed was like double-dipping, or where you collect retirement benefits when maintaining full benefits and salary with the same entity. This is common in the military and probably with other government entities as well. They, my elders, disagreed. However, I think they disagreed in a backhanded manner similar to justifying taking a penny from the "take a penny leave a penny" jar at the 7-11 despite having a pocket full of change.

Then I mentioned that if someone can draw SS, which is meant to be retirement savings (indicating that you are to leave the workforce so others/the young may fill that role), while earning a wage why can't someone also collect unemployment while earning a wage? Many people chose to remain unemployed rather than take a part-time job or a job of lower pay and position because they can make more on unemployment.

IMO, if we offer a reduced Unemployment benefit to those taking par time jobs we only displace the part-time workforce (teens) and nobody wins. However, if we reduce SS benefit for those who are working we might see more drop out of the workforce, and thus create more jobs.

I get on my dad's case about this, and he has finally brought in someone to eventually take over his practice for him. He is working less days, and by the time he starts collecting SS, at an age that gets him more per month, he will be near retirement.

I'm not saying to force the elderly or older workforce out of their jobs, but if they are keeping the jobs, collecting SS, and not creating more jobs then they are double dipping, not using the government funds as they were intended, and are essentially screwing the economy and society in much the same way as we would if we were able to collect unemployment while employed.

Discuss.

[Solomwi]

No.

[Patroklos]

If they are drawing SS and still working then they are still paying SS taxes, it should be a wash. Thats not the same as some of the other scenarios you mentioned.

[Japher]

If they are drawing SS and still working then they are still paying SS taxes, it should be a wash.

That's not the point. The point is that the eligibility for a retirement benefit should be that you are retired, not working.

In my scenerio the retiree who is working is doing so at the expense of allowing someone else to work and pay into social security. If each generation is working less because they have to earn less while waiting for the older generation to get out of the workforce then the younger generation will definitly have to a) work longer or b) earn a higher salary (thus paying more into SS) in order to receive equivalent benefits.

It's not about the flow of cash at this moment in time nor is about not getting out what you put in. It's about old people hoarding the jobs!

[Kuciwalker]

Giving people an incentive to stop producing wealth is pretty much always bad. Your creating jobs argument is a variation on the broken window.

[giblets]

IMO, if we offer a reduced Unemployment benefit to those taking par time jobs we only displace the part-time workforce (teens) and nobody wins. However, if we reduce SS benefit for those who are working we might see more drop out of the workforce, and thus create more jobs.

Are you saying the unemployment rate is related to the size of the workforce? By that logic wouldn't there be a lower unemployment rate if women stayed in the kitchen? And wouldn't smaller countries generally have a lower unemployment rate? I doubt it. I think the unemployment rate is most likely a product of other factors.

[Hauldren Collider]

Unemployment is related to the size of the workforce. Some of the unemployment drops we've seen recently have to do with the fact that people have given up on finding jobs. I believe underemployment is the measure you're looking for.

[giblets]

Unemployment is related to the size of the workforce. Some of the unemployment drops we've seen recently have to do with the fact that people have given up on finding jobs. I believe underemployment is the measure you're looking for.

It might be true in the short term, because the amount of jobs doesn't adjust overnight. But in the long run?

[Japher]

Are you saying the unemployment rate is related to the size of the workforce?

I don't have to say that, the government says that, it (workforce size) is a factor in their calculation.

When women entered the workforce they did so at a time when a majority of the workforce was deployed in WWII. Since then the overall consumption and productivity of the US and the world has increased to accomodate the added members to the workforce.

In the last 20 or so years we have seen, due to robots and computers, an increase in productivity (output per laborer) but not so much the same level of consumption, except maybe in the service sector - this is all an assumption.

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Underemployement is a good term.

[giblets]

I don't have to say that, the government says that, it (workforce size) is a factor in their calculation.

Yes, when finding the percentage of the workforce without jobs, you take the number of people looking for work and divide that by the size of the workforce. But the underlying causes of a high or low unemployment rate do not necessarily involve the size of the workforce. That's what I'm talking about. It seems clear that in the short term, the number of jobs isn't very flexible so a change in the size of the workforce effects unemployment. But once the economy adjusts is the size of the workforce still an underlying cause?

When women entered the workforce they did so at a time when a majority of the workforce was deployed in WWII. Since then the overall consumption and productivity of the US and the world has increased to accomodate the added members to the workforce.

Yes, to me this looks like an example of how the economy adjusts to a larger workforce in the long run. I don't think encouraging people to work increases unemployment in the long run and I think your idea of discouraging seniors from working would only mitigate unemployment in the short term. In the long run we would simply have less people creating wealth.

[Japher]

I'm not discouraging seniors from working, did I say that?

I said that if they want the benefits that the government was setting aside for their retirement then they should be retired.

[giblets]

You're giving them an incentive to not work. Tomayto tomahto.

[Japher]

but they get the incentive when they do work now, so it's not an incentive

are you saying unemployment is an incentive not to work?

[Hauldren Collider]

Having money that you can only use if you don't work is an incentive not to work.

[giblets]

but they get the incentive when they do work now, so it's not an incentive

are you saying unemployment is an incentive not to work?

http://en.wikipedia.org/wiki/Incentive

Yes, unemployment checks are an incentive to not work. (However I'm not against their existence.)