You also missed average age for starting a claim, which has also risen since people are not retiring at the same age, at least in the UK…
(Although equally when you pass retirement age you no longer pay NI here, which mitigates many of the benefits…it’s complex!)
It’s true! It does matter, it’s not just some OMG shit shit shit effect.
According to your own article:
The latest data from the Bureau of Labor Statistics (2009) show that government workers make about 5 percent more than private sector workers on average.
Public sector workers also are significantly more likely to have traditional pension plans – called “defined benefit” plans. The latest data from BLS showed 20 percent of workers in the private sector have pension plans. In the public sector, defined benefit plan coverage is four times greater — about 79 percent.
In retail firms, for example, only 48 percent of workers were covered by health benefits offered by their firm (the worst industry for insurance coverage), compared to 80 percent of workers in state and local government (the best industry for insurance coverage).
And those state/local government employees are paying less for coverage than their private sector neighbors.
As for accountants, its hard to say because the article does not distinguish if they used the mean or median. Nor does it include any other factors that might influence wage.
Federal workers make a bit more after including everything, but state and local don’t.
Clark Howard came out with a piece this week saying that younger folks to have even a meager retirement, now need to be saving 15% due to changes.
Increased income being saved- lower consumption- slower economy without some external stimulus or competitive advantage.
I am seeing that trend with some of my friends who are smarter- we’re expecting to get screwed, so we’re trying to prepare for it. Many are living at home longer because they want to buy their houses or at least get 30-40% down even when they have good job.
Shrink the social safety net and consumers will respond by saving more and being less happy. Consumption drives the economy at a greater clip then saving.
Counter-point about the situation of the young middle and upper-upper class by Karl Smith (who is awesome) over at Modeled Behavior.
http://realestate.yahoo.com/promo/7-towns-where-land-is-free.html
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look at these unlivable crap holes!
Living out in the boonies is all very fine if you’re independently wealthy and don’t need to commute to a job, and don’t mind never meeting more than the same 12 people, etc. etc.
Right, but as I pointed out, they make more on average at least partially because the comparison just looks at average income for public vs private sector workers - completely ignoring the type of work they do. There is nobody working for the government checking movie tickets. There are no waitresses or retail workers. All those jobs that exist in the private sector and bring the average salary down don’t exist in the public sector. If you filter by education level or compare jobs directly, the best you can do is say ‘it depends’.
From the article Rimbo cited:
Someone who reaches 20 years of age:
Could expect to live to age 62.19 in 1900
Could expect to live to age 69.5 in 1950.
Could/can expect to live to 76.7 in 2004.
So people who reach working age today are living over 12% longer today than they did about a half-century back and almost 19% longer than a century ago. This is white males.
So I guess my next question would be, is that what they (actuaries/insurance companies) expected at the time (1900, 1950, 2004), or what the data actually revealed many decades later (obviously impossible for the 2004 data)? Also, by “average” are they talking median or mean?
Even in statistician-to-normal language translation, average should always equate to mean; calling the median the average would be like referring to the mode as a quartile or Pauly Shore as Vanna White.
If the reference meant anything but the mean when saying average, they should be drawn and quartered - philosophically, of course. The statisticians involved would be too busy determining if they needed to account for historical rates of variance of the rope to be used and whether or not the horses slated for the quartering were within one deviation of typical norms for the breed.
Since social security is a pay as you go system (i.e. the “trust fund” is a bunch of IOUs) doesn’t it really just matter the ratio of dependents to providers?
For pay-go yeah it’s more or less (beneficaries * benefits) / (taxpayers * tax rate).
The trust fund is rhetorically and actuarily confusing on top of that, by design. On paper, there’s two parts of the Federal government:
There’s a lot of legal hoo-hah, but defacto what happens is that benefits go out and taxes go in. Any amount SS collects in excess/in deficit goes into the “trust fund” vs. the rest of the government. That trust fund is allocated into US government bonds, which are redeemed for real money that SS sends out to recipients. With current law, once the trust fund is exhausted SS cannot pay benefits beyond incoming taxes; that’s a projected ~%23 cut in benefits once it runs out in 2024.
Continuing the two parts of government analogy, the Social security tax increase back in the 1980s was to build up a large pile in the trust fund to deal with the Baby Boomer bulge in the population making their way through the python. Collect more taxes from them when they work, draw it down when they retire.
In reality, none of this matters a damn for the health of the system. We spent 1980-on running up completely enormous deficits (even after the social security tax increase) that on paper came out of capital formation and reduced future productivity capacity (defined in this context as SS-taxable GDP). As a result, we need to bump taxes or cut benefits.
How much of social security is spent now on programs/benefits that were not included in the original concept of social security? It is much more than just a retirement system now.
Which is why it’s so important that it be preserved–for instance, kids whose working parents have the bad taste to die on them should get something and not be left high and dry.
Also, re: the trust fund being a bunch of IOUs, well, they are interest-bearing Treasuries backed by the full faith and credit of the U.S. government, just like any other U.S. federal debt instrument, per my understanding. Unless certain people in Congress (ahem) create an entirely artificial “crisis” by refusing to increase the debt ceiling and thus endanger that creditworthiness, there won’t be a problem. The federal debt amounts to nothing more than a super-safe place to park excess US dollars at interest–people like being able to do that rather than stuff it in the walls and in coffee cans in the yard and under their mattresses. Thus sayeth MMT.
There’s a lot of legal hoo-hah, but defacto what happens is that benefits go out and taxes go in. Any amount SS collects in excess/in deficit goes into the “trust fund” vs. the rest of the government. That trust fund is allocated into US government bonds, which are redeemed for real money that SS sends out to recipients. With current law, once the trust fund is exhausted SS cannot pay benefits beyond incoming taxes; that’s a projected ~%23 cut in benefits once it runs out in 2024.
Sounds an awful like witchcraft…
FDR intentionally tried to design it to make it hard to divert the tax revenue. There’s some really amusing stuff about it in his biographies.
While trying to put a nail in the coffin of this thread, I hit my finger with the hammer, and discovered that today, a judge ruled that Scott Walker’s anti-union law was …unconstitutional.
on motion for summary jmnt and motion for jmnt on pleadings: summary jmnt GRANTED in favor of pltffs, defts’ motion for jmnt on pleadings DENIED. Wis Stats 66.0506, 118.245, 111.70(1)(f), 111.70(3g), 111.70(4)(mb) and 111.70(4)(d)3 are declared unconstitutional for violating US and Wisconsin constitutions, and 62.623 for violating Wisconsin constitution. all the above statutes are declared null and void.
What judge was that?