America's CEOs Want You to Work Until You're 70 | Hacker News Reader

America's CEOs Want You to Work Until You're 70

businessweek.com

21 pointsttar65 comments

The interesting edge case is that people like my dad -- who did sheetrock for a living -- would never ever have been able to make it to age 70 to retire. He knew the odds were slim that he'd make it to 67. He passed away in 2004 at age 54; my tribute to his memory: http://bit.ly/11K2Dsb

It's kinda disgusting that "America's CEOs" just don't think about and don't care about people like him. . . they and their minions that theoretically can make it to age 70 from behind a desk forget that the buildings they work in and the houses they live in were physically built by people who need and deserve to retire, too. But "America's CEOs" and others who are hellbent on accelerating their path to early retirement see only the numbers.

Perhaps someone shouldn't be trying to hang Sheetrock until they're 70. You'd think, after 20+ years of hanging Sheetrock, a person could start his own Sheetrock hanging company and hire others to do the labor. I have little sympathy for those who took their entire lives without any sort of ambition to advance. It's not my job to pay for the retirement of other people. It's the individual's job to take care of their own life and responsibilities. However, we obviously need a safety net to protect those who might become disabled but the safety net ought not be the primary means for the able bodied to take care of themselves at retirement.

Blaming the victim, favorite American pastime.

Wait till it's your turn, oh you who think you are immortal.

Have you thought about this quantitatively? I don't think the "start a company and hire others to do the physical labor" approach is viable in societies where younger people have a low death rate.

I'm not sure CEOs are any more sure to make it past 70 nor do I know whether they tend to retire early. We might make projections based on our own thoughts, but I'd be interested in seeing data showing actual data about longevity and retirement.

The title is deceptive—"The Business Roundtable" is just doing simple math, because the fundamental issue is demographic: people are living longer and having fewer children. In the next 30 years, it simply won't be economically feasible to support a huge number of old people if all of them retire or attempt to retire at 65.

If Dean Baker's analyses are correct, then concerns around demographics, retirement, and Social Security are all relatively easy to solve, and the only really big problem is health care costs.

Of course it's economically feasable. It's just a matter of priorities.

Congress managed to come up with 8 trillion dollars for the Wall St bailout at the drop of a hat, and 3 trillion (and counting) for the Iraq/Afghanistan wars. On top of that, the US manages to spend more on its military than the rest of the world combined.

To say that it couldn't come up with the money to support its own citizens in their old age would be laughable if it wasn't so sad.

You skipped the dollar number for entitlement spending. It may surprise you how much it costs to give $15k/yr to 50million people.

About $750 billion per year? What portion of that did they save previously by paying into the system? Why is it that productivity has skyrocketed since the social security system was introduced, which should account for the longer lifespans, yet we still find ourselves having these conversations?

It is a matter of priorities, plain and simple. Just because it isn't a high priority for you doesn't mean it isn't a question of priorities.

Much more than $750 billion a year, when you factor in the costs of the huge government bureaucracies that administer it and all their employees.

Maybe it's just the fact that I'm a DC native that I react this way, but what exactly are you talking about? The federal government does a fine job at a great many things with low overhead, lest you'd be getting all your mail via FedEx. I recall during the big health care debate, there was the statistic going around that the overhead of medicare was 2%, vs. somewhere around 30% for private insurance. (What those people spend on advertising alone could pay all of that "bureaucracy".)

Readers of this site should be keenly aware of these issues and what they're really about; we work in an industry with rampant age discrimination where people are encouraged to spend their early 20s working all night to make someone else rich, people routinely burn out before 30 ... do you expect to be pulling all-nighters at your Rails startup at 70? No? Then you should pay attention and get pissed off about this stuff.

They didn't "save" anything by "Paying into the system". They directly supported retirees of the past, as today's workers support them now.

Don't put priorities in my mouth.

The problem is, it isn't about money. The government has all the money it needs, the government can print money if it needs to.[1] The problem is that all these old people will need goods and services, and no amount of legerdemain with mere money can get around the fact that those goods and services must actually be produced, and the people producing those goods and services are therefore not producing other goods and services.

When you hear that statistic about two workers per retiree or whatever, don't just be thinking about money; that's the output of those two workers putatively going to support the retiree, and what's leftover going to power the economy.

As convenient as it can be to analyze problems in terms of money in normal life, when it gets to these really big "structure of society" problems the abstraction starts to get in your way again. Many of the characteristics of money are downright deceptive; one may save $100 today, but $100 of, say, corn today is not going to feed any retirees 20 years from now, it'll just be a rotted mess. Goods and services store poorly; they need to be matched up producer/consumer in something more like real time. Money is a great abstraction over that, but a still a secondary phenomenon compared to that real-time match up.

Of course, we can indeed support quite a few retirees... if one adjusts their standard of living down a long way. If it's OK for them to dial 911 and for nothing to happen, we've got more than enough wealth to support all kinds of retirees. Start specifying out a "good" first-world life style, though, and it becomes problematic again.

The problem is not, in absolute terms, a "lack of money"; the problem is that we've made promises about the quality of the retired life that are going to be very difficult to keep with small single-digit numbers of goods and service providers, while at the same time having enough of a productive economy to produce the wealth that will make it possible to keep those promises. Money is a very poor lens to analyze this problem through.

(Personally I don't believe the problem to be as hopeless as it seems, as there are still some avenues for significant per-worker productivity enhancements, mostly in terms of significant improvements in robotics. However, it must be observed that with our current set of promises, we 20-, 30-, and probably even 40-year olds are effectively all-in with our retirements on that hope, because if tech were to stagnate at current levels the current set of promises is probably mathematically infeasible.)

[1]: I'm not saying this is good or desirable, btw, it's just part of my point about this not being about money.

But tons of people are unemployed and we are not suffering any shortage of goods or services, so I don't understand how structural issues are applicable to this problem. Are you saying that if everyone magically got their social security checks regardless of government insolvency that the economy would not be able to support that additional purchasing power?

What I'm saying is, money doesn't matter if we make promises to retirees that require three workers per retiree to fulfill and only two workers per retiree physically exist. No matter how much money you throw at the problem, retirees can not draw on more resources than physically exist. And you have to leave enough left over for the rest of the economy, too; those two workers can't be 100% allocated to retirees, because they also need to eat, provide shelter for themselves, ideally provide for some sort of family so there's someone there to pay for their retirement, also pay taxes so there's still a government, etc, etc. Money can only choose from the possible set of economic allocations, not the impossible ones.

And the higher-level point is just that when it comes to this sort of big "how shall we structure society?" questions, thinking in terms of money affords bad logic. In particular, people can't resist straight-line interpolations based on current prices, as if prices don't change and we have an infinite pool of resources to draw on at unchanging prices, so it's just a matter of scaring up enough money. That works in your day-to-day life, it's not how it works at a societal scale.

With 9% unemployment and 15% of the population retired, it seems we have a good amount of labor available for servicing and goodsing retirees.

You're just rephrasing your original post, but you're not offering any evidence of why you think the burden of retirees is going to be so overwhelming. Why are retirees going to require an "impossible allocation"? Seems to me if demand increases then prices go up. Sure it starts to break down at extreme cases, but why would a marginally increased body of retired people be such an event? We do not have a shortage of workers at all, and the trend is to produce more stuff with ever fewer workers.

Your numbers are wrong. Sure, loan guarantees and lines of credit might have hit the multi-trillion dollar mark. But loans != money the government loses. The net cost of the bailouts is at most $150 billion [1]. And that number is assuming the every group that still owes the government money goes bankrupt or defaults right now. So that number is higher than the number that we'll see several years from now, because there are still loans/equity stakes outstanding that are being paid off today, with interest (or, in the case of equity stakes, are going to be sold off in the future).

Meanwhile, major entitlement spending (Social Security, Medicare, Medicaid, Obamacare, CHIP) accounts for 44% of the entire federal budget (total entitlements accounting for 62%) [2]. Total entitlements amount to $2 trillion in 2012, and increasing significantly faster than inflation every year.

[1] http://projects.propublica.org/bailout/ [2] http://www.heritage.org/research/reports/2012/10/federal-spe...

By 2030, Medicare alone is projected to cost about 5.5% of GDP (about $1.15B/year), and by 2040 the cost will rise to 6% of GDP (1.6B/year). The numbers just get worse after that.

Do the math. It doesn't add up.

https://www.socialsecurity.gov/OACT/TRSUM/

I'd like to see the results of this math.

How much is saved/earned if each worker retires at 70 instead of 65?

I don't see how that makes the title deceptive? The title says that the business roundtable wants people to work until they're 70, which is true. The calculations involved here are irrelevant.

It's really sad to see how selfish people are (or have become). I wonder if it is a subtle result of the seemingly permanently-lousy economy.

This is a problem for all of us and we should solve it as a group, in a way that hurts as few people as possible. What happened to solving hard problems with innovation and intelligence? Why are so many people so ready to throw in the towel and abandon ship, taking whatever isn't nailed down on the way?

The solution to medicare isn't to remove younger, cheaper people from eligibility, it's to remove older, more expensive people from eligibility. The math is shockingly obvious on this point.

Except that runs counter to (a large portion of) the point of Medicare, which is to provide assistance to the old. (Yes it's also for low income households, but it's also a lot aimed at the elderly as well.)

65 is younger than 90

Yes? I don't see your point though.

I'll take a stab at guessing what you were trying to say though.. For a large number of the US jobs 65 is getting a bit on in years, think manufacturing, service, etc. also known as a large number of the , at 65 a large number of jobs aren't much of an option anymore.

Right. Cutting off the level of support for "old" people doesn't mean cutting off support for a 65. For example, why isn't social security structured as a 20 year term (the distance from 65 to average expectancy) , to be claimed whenever someone decides to retire?

Actually, Medicare is for the elderly and people with disabilities. Medicaid is for families with low incomes.

Ah, I stand corrected. Never used or really been exposed to either service.

So just make ineligible the people the social service is meant to serve? I don't think the solution is quite that shockingly obvious.

Medicare and social security were intended to ensure that people who were too old to work (at a time when the majority of work was manual labor) had a certain minimum standard of living. It was not intended to give healthy people a 30 year end of life vacation nor be a source of funds to futilely try and prolong the last few years of life.

I'm not against social services for the elderly. I don't think my gardener should have to work until he dies. But I also don't want the government to spend millions of dollars so my grandmother can live to 94 instead of 92. It's not even a matter of not wanting to pay the taxes to make that happen, it's a matter of priorities. I'd much rather see that money go to health care for children, for younger people who are still in the work force, and to education. I don't think medical care near the end of life is a particularly useful way to spend public resources.

Are you against private resources being spent by a rich person to live to 94 instead of 92, or just public resources?

I really like the UK NHS "QALYs" system for public spending, but I think it's reasonable for individuals to spend their money as they please (and, as a benefit, if it were paid by 100% private insurance or out of pocket, late stage medical care would be more in touch with needs. An extra 6 months of high-quality life might be worth more than 2y of coma, etc.)

> Are you against private resources being spent by a rich person to live to 94 instead of 92, or just public resources?

I'm against using public resources to do it.

I think it's irrational to use private resources to do it too, the equivalent of burning your house down before you die, but hey people are welcome to do that.

Too bad the morals aren't that clear. Promises were made, and those people literally paid their dues which you and I haven't.

Who made the promise? I promise you a million dollars, to be paid by some dude who hasn't been born yet.

What do you mean who made the promise?

http://lmgtfy.com/?q=who+created+social+security

Also, you conveniently fail to mention that most everyone receiving social security benefits has been paying in their whole life.

They might be overestimating the capabilities of the 65+ crowd. A lot of them aren't capable of working. I used to work in a call center where I talked to AARP members, and a lot of them aren't even capable of leaving the house. I know this because they told me. You may not have been aware of this because they don't talk to anybody but call center workers.

I don't have the numbers but I'll bet there are more people whose working days are behind them at that age than most people think, because those people don't get out much, or at all.

Of those who can still work, they are probably a lot who are good for a few shifts a week but couldn't work a full time job with benefits and a living wage.

I have a better idea: remove the payroll tax cap, you cheap sons of bitches!

It still has to be remembered that many people don't live to 70. Even today people working in hard manual labor and black men in general are pretty lucky to get to 70.

People who are healthy and able to work should not be living on retirement simply because they have reached 65, but neither should someone die at work because their life was harder to begin with.

I'm not a CEO by any stretch of imagination and I want people to work till 70. I want to be able to work till 70 (from a physical standpoint). I mean, unless, everything becomes robotized, automated and we all get reverse taxes.

Now you are talking like a communist. The robots will earn money for the owners of the capital that invested in their construction. You can work in the shale fields scrubbing motor oil out of rocks until you die of lung cancer.

Not sure where it is my thoughts coincide with theirs --all I meant was that if ordinary job tasks (outside of research and a few other highly intellectual areas) are 'done for us' by robots or become automated, and (most) people would not want to do that same job for that same capital then reverse taxes would be necessary, since few people would be 'earning' a living. However, people would have to find some way to fulfill their lives. Watching TV or going on global treks is not going to fulfill lives. Maybe I'm just pessimistic, but I think great amounts of people with too much time on their hands become counterproductive and I don't have an idea of how that would be solved. (Just heard about another Muni bus getting torched after the 49ers won their _playoff_ game.)

> people would not want to do that same job for that same capital then reverse taxes would be necessary, since few people would be 'earning' a living.

why would reverse tax (which i assume means the gov't pays you money) be necessary when many jobs become robotisized? Those people who are made obsolete by robots will have to find another way to create value - if they don't they either will have to survive on the dwindling social welfare (which seems to have to be lower as the number of people claiming them grows), or have to rely on family members. The unspeakable option which you allude to is to tax the owners of these robots (who invested their capital) to pay the reverse tax to those who the robots have replaced - i cannot agree with that option because its very unfair.

>why would reverse tax (which i assume means the gov't pays you money) be necessary when many jobs become robotisized?

Correct. Because people will become obsolete as primary workers for most stuff but will still want to have things (I mean luxuries, as opposed to necessities).

>The unspeakable option which you allude to is to tax the owners of these robots

I'm thinking of a time after this. When robots produce robots --when capitalists become much less necessary. The building of things would be more about 'should we?' rather then 'who'll build?'.

I was reading this http://marshallbrain.com/manna1.htm a while ago, which is quite apropos for this topic. Unfortunately, i really don't see a path from the current era, to the future you describe (which is to say, i hope it would happen, but i can't see a way forward that will make it happen).

I'm 66. I first retired at age 59 from a tech job with great benefits and healthcare for life. Got bored out of my mind, and went back to work at another tech company. Retired last July. By October I was again ready to work and am now working in yet another tech company.

I have no idea how long I will live, and I do intend to retire when my wife reaches 65.

Some of you make it sound terrible that someone is working at age 66. I am really happy working.

(I could get by without working, but it is very nice to have an income stream)

Well, they can't say they didn't see it coming. They have known since the 1970's that Social Security and Medicare were on unsustainable paths, and they repeatedly chose to pass the buck. What I want to know is if Millenials are going to get so fed up with it that they just cut them off completely. I mean, why would they ever want to pay 20+% of their salary for ever and ever, just to support the pathetic lives of those who repeatedly chose to fuck them over, and get nothing in return (or rather, negative returns)?

Average life expectancy for men in the United States is 75.

Enjoy those last five miserable years, guys.

It's a bit more complicated that that.

The at-birth life expectancy for males is currently 75.5 years. But that includes everything that kills younger people:

http://www.wolframalpha.com/input/?i=life+expectancy+for+usa...

The life expectancy for a male who has reached age sixty becomes 81.2 years:

http://www.wolframalpha.com/input/?i=life+expectancy+for+60+...

In comparison, the at-birth male life expectancy when Social Security started in 1939 was 63 years:

http://www.wolframalpha.com/input/?i=life+expectancy+for+usa...

My Dad is almost 70. I guess this gives me standing to drop some unhelpful anecdata.

At this point he's holding on to unlock accumulated Long Service Leave, which will occur in June.

I suspect he will get a job after he has Retired. Why? Boredom. Working hard is ingrained in the man. He is terrible at idleness. He can do it for a day or two (and no man alive is better at a good afternoon kip), but then he wanders the house like a restless poltergeist.

I expect he'll take his decades of hands-on electronics wisdom and work part-time at a local TV repair place. Just to keep himself busy.

As for the meat of the article -- which really is about trying to forestall the Greece-times-a-zillion excitement that the future of US fiscal policy promises -- I don't know what to say.

You guys are going to find that tough. In Australia we've had compulsory retirement saving (superannuation or colloquially "super") since the 1980s. Australians have now accumulated well north of a trillion dollars of assets against their retirement.

Is it perfect? No, it's riddled with problems. But in terms of forestalling a fiscal nightmare it's one of the most far-sighted reforms ever introduced.

> Australians have now accumulated well north of a trillion dollars of assets against their retirement.

Out of curiosity, could you elaborate on how this is implemented practically? Social Security, on the face, presents itself a lot like this but is really just a combination of a payroll tax and an entitlement program (i.e., there's no saved money anywhere that's yours; there's just the expectation that the government will pay out some benefits at the right time). Depending on your political worldview you could say the same about Americans, or you could also say that they've accumulated nothing in SS because SS (per the supreme court) does not legally guarantee any sort of payout and doesn't hold any securities tradeable on an open market.

If I had to design such a system myself, I'd personally go with forced savings of roughly the size of the current payroll tax in the form of actually-owned marketable government securities in individually named accounts, with a separate entitlement program to partially support those for whom retirement is still out of reach. If the Australian system looks anything like this, as opposed to how the US has designed Social Security, I tip my hat to them for practicality :-)

There is no "saving for retirement." As a practical matter, all forms of financial savings for retirement are at their root getting the working generation to give part of their production to the non-working generation. The American system does this directly through a tax. The Australian system does it indirectly by mandating savings in private financial instruments that achieve the same essential transfer.

i understand why social security is like this. why are retirement vehicles like 401ks and IRAs like this? for the young but well paid worker, do you suggest not saving for retirement?

Of course not. I'm just pointing out that at the end of the day, if you want to allow a significant portion of the population to "retire" you have to confront the same basic issue: those people aren't drawing down on goods and services they stashed away while they were working, they're taking away part of the production from the working generation.

That's the universal constant of old people--it was true even back before we had retirement systems and the elderly were taken care of by their kids.

You seem to think that money in an interest-bearing bank account or a mutual fund is the same as cash under a bed. It's not.

You also seem to think that the size of the economy fixed and that allocation is a zero-sum game across time and space. It's not.

Thus you are conflating welfare schemes with savings schemes.

They're different.

> money in an interest-bearing bank account or a mutual fund is the same as cash under a bed.

of course they aren't the same. But in aggregate, the reason investments work is because down the line, somebody is producing goods/services, and some of the profit of those production is paid out in the investment. In the scenario where there are too many retirees, this fails, because who is actually going to be creating the value that the investment accounts pay out?

Imagine there are W workers, and R retirees, where W > 2R (2 workers per retiree). If suddenly, half the workers retired, then now there is only 1 worker per 2 retiree. If they demand the same amount of goods, what would happen?

I predict rampant inflation as demand outstrip supply - sure the investment account might pay out handsomely, but that's a lie, because the cost of living will rise (remember, lots more mouths to feed, way less people doing actual work), and the poorest suffers first.

Accumulating investment capital has a different effect on the economy than taxing and spending.

> Out of curiosity, could you elaborate on how this is implemented practically?

You are required to pay 9% of your pre-tax income into a registered superannuation fund of your choice. These funds invest on you behalf. Upon retirement you receive a lump sum or annuity, depending on your plan.

The government does not take the funds, does not invest the funds and does not make the payments. Payment is not guaranteed.

The Australian Government still has a pension scheme (which is means-tested and so is reduced if you have plenty of superannuation), but it is not dressed up as an investment vehicle.

It's recognised for what it is: welfare paid out of general revenues.

America's CEOs can go fuck themselves

Oh, look honey, more equivocation between "working" and "not receiving a government entitlement check"!

"That's nice, dear."

But, but it obscures clear thinking on this issue!

"What else is new?"

So... we have more automation than ever before, and the solution is to make "everyone else" work longer so that all the benefits can be showered on these few privileged.

I expect that a lot of people who actually, really invented and developed this largess, would be disgusted with their attitude. And with what has happened to American society.

P.S. Yes, my statement is a bit simplistic and ignores the global context. But, confined to American society, I think my rebuttal has validity. And even on a global scale, I don't think I'm being disingenuous. U.S. senior management seems just as inclined to be exploitative abroad as domestically.

My comment also ignores increasing lifespan, but I don't think current discussion around increasing retirement age is being honest on that front. Rather, it seems to be another component of advocacy for a regressive distribution of society's expenses. (Also, lifespan increases seem to be slowing -- even regressing, in some cases -- and becoming more divergent (again?) based on affluence and economic opportunity.)

P.P.S. It's all the more hypocritical, when I think about it, in that many of these CEO's companies actively (if circumspectly) discriminate against hiring anyone over 50 -- or even in the upper 40's.

In today's world where "no job is secure", and where corporations seek to control ever-more of the marketplace, how would they propose to reconcile this?

Real simple. Don't want to work for the 'man' and retire at 70 -- start your own damned company. Learn how to invest. Buy real estate. Do something. If you don't want to work until your 70, don't let yourself be dependent on the government (or your employer) for your retirement.

Nobody is forced to be dependent unless they allow themselves to be. Many people own a car and a nice TV yet very few would be willing to put $30,000 down on buying their first rental property or invest in starting a company. It's easy to just let the government or an employer be your 'daddy.' It's much harder to take responsibility for your yourself and your own future.

Inspiring. I am going to sell my $25000 car (not the one I drive to work, the other one) and my $5000 TV, and buy some rental property.

Real simple - unless you don't have significant capital to invest in stocks, real estate or starting your own company, all of which pose varying degrees of risk that you will fritter away your nest egg and end up with nothing to retire on. $30,000 is not a small quantity of money for most families living paycheck to paycheck (US median income $44k) with 30-year home loans. Nor is it a large quantity of money to invest with.

If you happen to reach your late 50s without having already invested a fair bit and you still aren't making a lot of money, griping about the government isn't going to help you as much as dumb old social security. If that's what it takes for some people to survive, I'm not criticizing them for it just because I've had a much easier time.

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