Let’s Agree on an Age to Retire

Current antidiscrimination law hurts businesses and both younger and older employees

We marvel at the continuing energy of octogenarians such as Warren Buffett, Ruth Bader Ginsburg and Clint Eastwood, but let’s face it: Few 80-year-olds are as good at their jobs as they were in their 50s.

In most workplaces, wages rise with seniority, but productivity does not. In the U.S., after many years of a declining retirement age, the average worker is now retiring later, which means that there are fewer jobs for young people.

.. Given the added fact that mandatory retirement and age discrimination are illegal, employers hesitate to hire middle-aged workers, who may stay on the job long after their pay has exceeded their productivity.

..  A relatively simple set of reforms could help American businesses and workers at the same time. These would include a

  • relaxation of age-discrimination laws, so that contracts could require workers to retire at 65 or older, and
  • a reduction in Social Security benefits for well-paid older employees who decide to keep working.

.. Retirees in the U.S. can maximize their Social Security benefits by retiring around the age of 68, but some workers are induced to retire earlier. Their employer or union makes it irresistible through a “defined-benefit” pension plan, which provides a set annual payout, usually based on the salary earned in their final years of employment. Virtually all such plans encourage timely retirement by requiring contributions from those who continue to work and reducing their benefits if they stay on the job past a certain age. By design, most workers find it economical to retire by 60.

.. In place of defined-benefit plans, the new standard has become individual retirement accounts or defined-contribution plans, in which the employer provides tax-favored contributions but bears no responsibility for investment returns.

.. These new retirement plans have taken away the ability of employers to influence the age at which workers retire.

.. One way forward would be to amend current law to allow employers and employees to agree on a retirement age at the start of a new job. The contract could specify that, after a certain age, the employee could be terminated without cause.

.. It would also subtly redirect age-discrimination law to help job applicants in their 50s and early 60s, because employers would know that these employees could not simply stay on the job forever.

.. One effective change in incentives would be to reduce Social Security benefits for any beneficiary with more than $75,000 a year in earned income. A worker entitled to full retirement benefits at 66 who continues in a relatively high-paying job might, for example, lose $5,000 in Social Security a year.

.. For higher earners, the penalties could be even steeper. After age 76, an employee who makes, say, $200,000 a year and chooses to continue working full time would stop receiving Social Security benefits altogether. The benefits would start up again only at retirement.

I Spent 5 Years with Some of Trump’s Biggest Fans. Here’s What They Won’t Tell You.

The deep story of the right goes like this:

You are patiently standing in the middle of a long line stretching toward the horizon, where the American Dream awaits. But as you wait, you see people cutting in line ahead of you. Many of these line-cutters are black—beneficiaries of affirmative action or welfare. Some are career-driven women pushing into jobs they never had before. Then you see immigrants, Mexicans, Somalis, the Syrian refugees yet to come. As you wait in this unmoving line, you’re being asked to feel sorry for them all. You have a good heart. But who is deciding who you should feel compassion for? Then you see President Barack Hussein Obama waving the line-cutters forward. He’s on their side. In fact, isn’t he a line-cutter too? How did this fatherless black guy pay for Harvard? As you wait your turn, Obama is using the money in your pocket to help the line-cutters. He and his liberal backers have removed the shame from taking. The government has become an instrument for redistributing your money to the undeserving. It’s not your government anymore; it’s theirs.

The deep story reflects pain; you’ve done everything right and you’re still slipping back. It focuses blame on an ill-intentioned government. And it points to rescue: The tea party for some, and Donald Trump for others.

.. Many, however, had been poor as children and felt their rise to have been an uncertain one.

.. “We have our American Dream, but we could lose it all tomorrow.”

.. Affirmative-Action blacks, immigrants, refugees seemed to so routinely receive sympathy and government help. She, too, had sympathy for many, but, as she saw it, a liberal sympathy machine had been set on automatic, disregarding the giving capacity of families like hers.

.. And, as older white Christians, they were acutely aware of their demographic decline. “You can’t say ‘merry Christmas,’ you have to say ‘happy holidays,'” one person said. “People aren’t clean living anymore.

.. They also felt disrespected for holding their values: “You’re a weak woman if you don’t believe that women should, you know, just elbow your way through society. You’re not in the ‘in’ crowd if you’re not a liberal. You’re an old-fashioned old fogey, small thinking, small town, gun loving, religious,” said a minister’s wife. “The media tries to make the tea party look like bigots, homophobic; it’s not.” They resented all labels “the liberals” had for them, especially “backward” or “ignorant Southerners” or, worse, “rednecks.”

.. Their Facebook pages then filled with news coverage of liberals beating up fans at Trump rallies and Fox News coverage of white policemen shot by black men.

.. age had also become a source of humiliation. One white evangelical tea party supporter in his early 60s had lost a good job as a sales manager with a telecommunications company when it merged with another. He took the shock bravely. But when he tried to get rehired, it was terrible.

.. Age brought no dignity. Nor had the privilege linked to being white and male trickled down to him.

.. Those more in the middle class, such as Sharon, wanted to halt the “line-cutters” by slashing government giveaways. Those in the working class, such as her Aflac clients, were drawn to the idea of hanging on to government services but limiting access to them.

.. with all the changes, the one thing America needed, she felt, was a steady set of values that rewarded the good and punished the bad.

.. If you rose up in business, you took others with you, and this would be a point of pride. There was nothing wrong with having; if you had, you gave. But if you took—if you took from the government—you should be ashamed.

.. The rich deserve honor as makers and givers and should be rewarded with the proud fruits of their earnings, on which taxes should be drastically cut. Such cuts would require an end to many government benefits that were supporting the likes of Sharon’s trailer park renters. For her, the deep story ended there, with welfare cuts.

.. They want someone that’s macho, that can chew tobacco and shoot the guns—that type of manly man.”

.. Many blue-collar white men now face the same grim economic fate long endured by blacks. With jobs lost to automation or offshored to China, they have less security, lower wages, reduced benefits, more erratic work, and fewer jobs with full-time hours than before.

.. He compares the top 20 percent of them—those who have at least a bachelor’s degree and are employed as managers or professionals—with the bottom 30 percent,

.. But is sleeping longer and watching television a loss of morals, or a loss of morale? A recent study shows a steep rise in deaths of middle-aged working-class whites—much of it due to drug and alcohol abuse and suicide. These are not signs of abandoned values, but of lost hope. Many are in mourning and see rescue in the phrase “Great Again.”

.. He has shamed virtually every line-cutting group in the Deep Story—women, people of color,the disabled, immigrants, refugees. But he’s hardly uttered a single bad word about unemployment insurance, food stamps, or Medicaid, or what the tea party calls “big government handouts,” for anyone—including blue-collar white men.

.. Not only does he speak to the white working class’ grievances; as they see it, he has finally stopped their story from being politically suppressed. We may never know if Trump has done this intentionally or instinctively, but in any case he’s created a movement much like the anti-immigrant but pro-welfare-state right-wing populism on the rise in Europe. For these are all based on variations of the same Deep Story of personal protectionism.