One of the raps on Social Security is that it supposedly pits the older generation against the younger.
This seems intuitive — after all, retired Americans collect the benefits but those in the working population make all the contributions. The notion of a generational war has been pushed aggressively by (among others) Boston University economist Lawrence Kotlikoff, author of the apocalyptic 2005 book "The Coming Generational Storm" and of academic papers and newspaper columns in which he writes of "the terrible zero-sum nature of the generational game we are playing against our children."
As we mark Social Security's 81st birthday — it was signed into law by President Franklin D. Roosevelt on August 14, 1935 — it's important to observe that the program doesn't pit generations against each other so much as bind them together. As an example, more than a decade of research has established Social Security's role as the nation's most important anti-poverty program for children.
Social Security "is especially critical for children of color, who are more likely to live in families with limited or no other sources of income," said Maya Rockeymoore, chief executive of the Center for Global Policy Solutions. The center's study was conducted chiefly by Peter Arno and Jeannette Wicks-Lim of the University of Massachusetts-Amherst.
The most remarkable point made by both studies is that, except for the very poorest households, among low-income families more children live in households receiving a Social Security check than one from such anti-poverty programs as Temporary Assistance to Needy Families or Supplemental Security Income. In 2003, according to Boushey's paper, 8.6% of children in households earning less than 200% of the federal poverty line were living with someone receiving TANF, but 11.9% were living with someone receiving Social Security. (That income figure was $38,314 for a family of four in 2003 and is $48,600 today.)
The later study put raw numbers to the finding: In 2014, 6.4 million children, or 8.7% of all children, benefited from Social Security, up from 5.4 million (7.3%) in 2003. Social Security keeps many of those children out of poverty — the child poverty rate in families receiving Social Security is 25.5%, but it would be 42.8% without those benefits.
"The growing number of children who rely on Social Security underscores the need to protect and expand this critical program," Rockeymoore said, "not slash it in the name of deficit reduction or tax reform."
That's an important point because it's common to hear conservatives dismiss Social Security as merely a giveaway to seniors already living comfortably — "greedy geezers" was the term uncorked a few years ago by the egregious former Sen. Alan Simpson (R-Wyo.) during his campaign to cut benefits.
As these studies show, such attacks on Social Security overlook its important insurance component. The program's benefits for dependents of workers who die or become disabled before retirement are much higher on average than anything a private retirement account could provide for a family bereft of a breadwinner in mid-career.
That this feature is so often ignored is surprising, because it can't be unknown to one of the leading advocates for benefit cuts: House Speaker Paul D. Ryan (R-Wis)., who received survivor benefits during his college years because of his father's early death. Benefits to surviving college students through age 21, which were instituted in 1962, are no longer available, as it happens; they were repealed in 1981, when the maximum age for receiving survivor benefits was reduced to 18. Several proposals for expanding Social Security include restoring the higher ceiling.
One interesting aspect illuminated by the Center for Global Policy Solutions is the increasing role of indirect benefits in keeping families solvent. While the number of children receiving direct benefits — through the survivor, disability, and retirement programs — rose by less than 3% from 2003 through 2014, those receiving indirect benefits — those collected by a grandparent or other non-parent in a household have soared by nearly 39%.
That reflects the rise of multi-generational households, especially among Asian, Latino and black families. The percentage of Americans living in households with two or more adult generations or grandparents and grandchildren rose from 12% in 1980 to nearly 20%, according to the Pew Research Center. The percentage exceeds 25% in Asian, Latino and black households.
This trend puts a new gloss on the importance of Social Security to Americans of all ages. Traditionally, the program was viewed in part as a way to maintain the independence of older generations to relieve their children of the economic burden of supporting them rather than making their own way. The renowned Social Security advocate Robert M. Ball was only half-joking when he remarked that one reason to support the program was "the value of not having your mother-in-law living with you."
In the modern economy, however, Social Security is not a generational battleground — it's a compact tying generations together.