Protected Class

For all the fierce debate in Washington about cutting government spending, it is striking how the interests of one class — the elderly — are protected by politicians on both sides. The Democrats roundly attack the GOP for proposing radical changes in Medicare and Medicaid that would, they charge, undermine the security and health of the elderly.

(image via CDC)

The GOP loudly proclaims that these changes would affect only those now under 55, so none of today’s elderly and soon-to-be-elderly would be touched (grandfathering them in, so to speak). And neither side would do more than delicately tinker with Social Security. Hardly anyone dares whisper that senior citizens might be discomfited.

This is odd: Today’s senior citizens are better off than other Americans – certainly better off than American children. And yet, they are to be protected more than other Americans. (Disclosure: I will soon join this protected class.)

There is increasing awareness of growing inequality in the United States, of the widening gap between the rich and everyone else. But here is another dimension of growing inequality: the gap between the generations. And these haves are getting to have more.

Piteous to Privileged

In the 19th century, the elderly were quite reasonably objects of concern and even pity. Given the hard and dangerous physical labor, the disease and epidemics, the insecure nutrition, and the primitive medicine of the day, Americans aged rapidly. Just getting to 65 was an accomplishment. Even after reaching 65, people had to keep working for their daily bread as long as they could. When they finally could no longer work, the elderly had to move in with or otherwise depend on their adult children. In some cases, aged parents would contract with sons to guarantee that such support would come.

Those who had no adult children nearby or whose children were themselves poor had to turn to private and public charity. Many ended up in almshouses, institutions which were first established to deal with poor of all ages but which evolved into old-age institutions – awful, dreaded ones at that. The image of the old as vulnerable and needy made sense. Then came the 20th century.

The New Old

The condition of the elderly changed dramatically in the 20th century, especially in the second half. For one, old Americans started living longer. In 1900, men who had reached 65 could, on average, expect to reach 76; now they should assume they’ll get to 82. In 1900, women at 65 could anticipate living until 77, now until 85 (pdf). (Such longer lives, by the way, partly explain the unexpected run-up in Social Security and Medicare costs.) It follows, of course, that the elderly, those 65 and older, have become, especially after birth rates fell in the 1960s, a much larger proportion of the population – from 4% of all Americans in 1900 to 13% in 2010 (to an estimated 20% in 2050).

And the elderly started living better. Once, the elderly were especially likely to be poor – and the poor to be elderly. Not any more, as the graph below shows. It displays the percentage of Americans with poverty-level incomes, by age, by year.

Around 1960, those 65+ (represented by the lighter line) were about twice as likely to be poor as  were 18-to-64-year-olds. By the 1970s, they were less likely to be poor than children, and by the 1990s a bit less likely to be poor than other adults. In 2009, 9 percent of the elderly, 13% of other adults, and 21% of children were poor.  This reversal happened even as the elderly worked less; they retired earlier and earlier. In 1900, about 3 of every 5 elderly men were still working; by 1980, fewer than 1 in 5 were; and it’s below that now (source).

What happened? In part, the growth of the economy and the rise of private pension plans enabled comfortable retirement. But the biggest part of the explanation is the establishment of Social Security in the 1930s and the expansion of Social Security more recently. Since 1975, recipients have gotten automatic cost-of-living adjustments. Note carefully: There are, by contrast, no automatic cost-of-living adjustments for the minimum wage; that requires congressional action. The minimum wage is now worth, in buying power, about 20 percent less than it was worth 40 years ago (source). We’ve privileged the retired over the low-wage worker.

Not only do the elderly now get more annual income than do other Americans, they have considerably more wealth. American households headed by someone 65+ had, in 2007, a median net worth of around $220,000,  20% more than households headed by someone about 50 years old and more than double that of households headed by someone about 40 years old (source). Of course, there remain many financially distressed senior citizens – but proportionally fewer than among younger Americans.

Medicare, arriving in the 1960s and expanded ever since, contributes to the affluence of the elderly by removing most of the cost of health care from those who need health care the most. And, of course, it is workers’ contributions to the Medicare fund that makes this possible.

One result of this relative enrichment of the elderly is that they increasingly live on their own, either as couples in an “empty nest” (see this post) or as individuals in their own homes. They no longer have to move in with or depend on their grown children. It is not surprising, then, that the suicide rate among the elderly has dropped substantially in the last 50 or so years. Life has gotten better.

Why the Privilege?

So, if the elderly, as a class of Americans, are doing significantly better than other Americans, why do the politics of the day insist that they should not sacrifice to cut the national debt?

One simple – and correct – answer is their political power: Much more than others, the elderly vote – and organize, and petition, and lobby. Politicians respond to voters.

But there may be more going on. In a recent national poll, Americans were asked whether they thought that “providing health care coverage for the poor is the responsibility of the federal government” and whether they thought that “providing health care coverage for the elderly is the responsibility of the federal government.” The percentage saying yes was 56 for covering the poor, but 76 for covering the elderly. Different things may be going on to explain that 20-point preference for helping the elderly. In part, it may reflect the stigma of being poor in America. But it probably also reflects the reverence we accord the elderly.

That reverence goes deep. “You shall rise before the aged, and defer to the old,” the Scriptures say (Lev. 19:32, RSV). And even I, not quite a senior citizen, already benefit from the deference – the senior menu at Denny’s, cheaper movie tickets, and other discounts – and soon will benefit more – for example, from property tax deferments for the elderly. Frankly, I need them a lot less than younger people do. But that’s part of the point: favoring the elderly even when others have greater needs.

The injunction to defer to the old was neglected a lot in the 19th century; that is why we have the image of the piteous old person. Now, in our more affluent times, it’s a virtue we can more easily pursue. Increasingly, the image of the old person is a smiling picture taken on a golf course. But at what cost to the young?

(This column was cross-posted on The Berkeley Blog on May 6, 2011.)