Having just passed the French lower legislative branch, a gradual increase in the French retirement age from 60 to 62 during the next 8 years will probably be enacted. In the US, we are gradually ascending to 67 in 2027.
It all sounds so logical. It is just too expensive for so many people to be receiving earlier benefits. After all, when Social Security was established in the U.S. in 1935, the average life span was LESS THAN the retirement age.
But then I read about a 58 year old worker at an Ohio tire plant. Referring to the physical labor that his job requires, he said, “Dessert with lunch is ibuprofen.” This gentleman said that, “he does not think he can last until 66”.
This takes me to a question. When debating fiscal dilemmas, how much should we consider individual stories? Our legislators do it all the time. With the healthcare debate, we heard about individuals without insurance. For the Social Security debate, we see the reality of a higher retirement age through one worker.
What should we care about most? The statistical reality or the real stories?
The Economic Lesson
Decision making through an economic lens always takes us back to cost/benefit considerations. Here, though, cost and benefit conclusions could depend on you. Are you a tax payer? A laborer who will not make it to 66? A person without health insurance? Someone with excellent health coverage? A politican hoping to get re-elected? The list can go on and on.
Perhaps, all of these considerations return us to yesterday’s post about the work of James M. Buchanan. James M. Buchanan won the 1986 Nobel Prize in Economics for his work on “public choice theory“. Stated very briefly, his focus has been the importance of fixed political rules to thwart politicians’ self-interest.