Entitlement Expansion and Aging in the United States

A recent New York Times article discusses Republicans’ desire to oust the Affordable Care Act (otherwise known as “Obamacare”) before the program becomes entrenched in the daily lives of the American citzenry. Should that happen, the belief goes, the program will become nigh-impossible to dislodge and will only expand. The article usefully places this in recent historical context (expansion of Social Security, and so on).

From my geographic/demographic standpoint the real interest was half down the first page where the NYT asserts (probably from an uncited Congressional Research Service report) that one reason for the expansion of “entitlement” programs since the 1960s has been the “aging of the population.”

Your Geographer (that is, me) explored the U.S. Census Bureau’s site (not their International Data Base) and compared the U.S.-wide summary results from the 1940 and 2010 Censuses to quantify this statement. I chose 1940 as it was the first Census conducted after Congress enacted Social Security in 1935 and its later expansion to cover dependents and survivors in 1939 (thanks NYT).

Understatement of the day: the U.S. has changed substantially since 1940. In 1940, the Census Bureau counted 131.6 million Americans. In 2010, there were 308.7 million Americans. In 1940, 4.6 million Americans were aged over 65 and were (ceteris paribus) eligible for retirement benefits (this 6.9% of the 1940 U.S. population). In 2010, 40.3 million Americans were aged 65 or older (13.0% of the 2010 U.S. population). To put it another way, there were more Americans in 2010 aged over 85 than there were Americans aged over 65 in 1940. This ten-fold increase in the number of elderly Americans, not to mention their growing proportion of the U.S. population, is due in no small part to changing fertility among U.S. families, improved healthcare, nutrition, and a number of other factors.

As the ratio of older Americans eligible for full retirement benefits (somewhere between 65 and 67 according to the Social Security Administration) grows larger the economic burden necessarily falls on a workforce that is proportionately smaller each generation.

To me there are a few solutions to this problem, all of which will probably tick off some political constituency. So we should seriously consider all of them. First, increase the retirement age. If there are more Americans aged over 85 now than there were Americans aged over 65 in 1940, why not make the full retirement age 70 or 75?  Second, immigration. If we (as a country) need workers and families to keep the economy humming immigration has always been the American solution. Third, more children. My least favorite idea, mostly because I don’t want the government telling me how many children to have. Further, this would only increase the burden on working adults by expanding the number of dependents; not only would a hypothetical American couple have to support both sets of parents they would also have to support three or four children.

A combination of increased retirement age and more open immigration policies (dare I say, a path to citizenship?) would be one way to keep the expansion of “entitlement” benefits in check, saving the system for future generations to (eventually) enjoy. The pending future, as various commentators have loudly argued, is a collapse in the Social Security system. Go write Congress.

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