Raising retirement age would be costly mistake

WUSTL Social Security expert Merton Bernstein comments on Standard & Poor’s study on retirement

Standard & Poor’s recently released study on “Global Aging 2010: An Irreversible Truth” calls for the raising of the retirement age and says that age-related public spending is “unsustainable without policy change.”


But Merton Bernstein, LLB, the Walter D. Coles Professor Emeritus at Washington University in St. Louis School of Law, says raising the retirement age could be a costly mistake.

“Almost everyone has heard the litany of worsening ratios,” Bernstein, along with his wife, Joan Bernstein, JD, a graduate of the WUSTL School of Law, writes in a recent opinion piece in the Huffington Post. “In 1950, 16 people at work for each person drawing benefits declining to the current (2010) 3.3 at work for each one drawing benefits with the prospect of 2.2 to one by 2020.

“But in the real world, the crucial factors for Social Security funding are the number of people at work, what they earn and how much of those wages are taxed. Since World War II, we have seen repeatedly that in a tight labor market, employers put aside prejudice and hire more women, minorities and older people to fill their needs and offer higher wages and arrangements, like child care, to make work more feasible.”

The Bernsteins observe that technology will boost future productivity and earnings providing ample resources for Social Security. Further, they warn that reducing Social Security benefits would reduce purchasing power and undercut private profits and employment.

Read more at huffingtonpost.com/joan-and-merton-bernstein/beware-of-financial-firms_b_775309.html#comments.