Social Security payments are going up in January 2012, one sure sign that a presidential election season is getting underway.
Sixty three million Americans get something from Social Security (either retirement or disability payouts) and many more are living with or related to same. The 3.6 percent increase is the first in two years and will boost average retiree benefits by $39 a month and Supplemental Security income benefits by $18 a month. The increase is roughly in line with consumer price index (CPI), which is up about 3.9 percent this year, though some of the increase for retirees will be eaten by increases in some Medicare premiums.
The last cost-of-living adjustment came in January 2009, when payouts were boosted 5.8 percent, much higher than the normal range of 2.3 percent to 4.1 percent.
So Social Security recipients during the period of 2009-2012 will see their annualized payments increase by at least 2.4 percent. As David Cay Johnston notes in a look at the first official 2010 wage data (culled from the Social Security Administration):
There were fewer jobs and they paid less last year….
The median paycheck—half made more, half less—fell again in 2010, down 1.2 percent to $26,364. That works out to $507 a week, the lowest level, after adjusting for inflation, since 1999.
The number of Americans with any work fell again last year, down by more than a half million from 2009 to less than 150.4 million.
And Marketwatch reports that Bureau of Labor Statistics show real weekly wages are down 2 percent over the past 12 months.
In 2003, Cato's Michael Tanner calculated the rate of return on Social Security benefits to folks retiring then at about 2 percent, which stinks for any retirement plan. Worse still, wrote Tanner, "future retirees will receive even lower rates of return." Which is to say, nothing or negative returns. You wouldn't stand for that in a private plan, so why should we stand for it in a forced plan? Better question: Why do we stand for a forced savings plan that systematically robs us of money when we retire? Wouldn't it better to figure out how to help poor people, whether young or old, independent of squeezing us all into a plan that is guaranteed to earn bad returns and then get goosed whenever election season kicks into high gear?
No wonder kids hate their parents and grandparents these days, with the walking on their pants and their baseball caps turned backwards. Take it away, Alan Simpson, a.k.a. "The Enema Man":