The Business Roundtable is made up of the CEO's of 200 major corporations. They met in Washington this week, and you'll be happy to know that they solved the Social Security problem.
What is that problem? Is it caused by the "babyboom" retirement bulge? No, that problem was solved in the 1980's when a government commission recommended planning for that increased load on the system by increasing FICA payroll taxes beyond the level actually needed in order to produce a surplus in the Social Security trust fund. That surplus would be used to cushion the effect of babyboom retirements.
Yes, Virginia, there was a time in our recent history when our government was capable of recognizing a problem and coming up with a bipartisan solution.
The current problem is that the Social Security trust fund will only be able to pay full benefits for the next two to three decades. If no adjustments are made it will only be able to pay 75% of expected benefits thereafter.
Many people feel that a reasonable solution is to change the maximum wage subject to FICA payroll tax. Right now, the first $110,000 in earnings is subject to the tax. Raising it to the first $220,000 in wages totally solves the problem.
The Business Roundtable disagrees. The members--whose average compensation is $11.3 million per year--claim that this will put a terrible drag on the economy.
Up pops the old "job creator" argument. If they have to pay anything more in taxes, they just won't create jobs. Sorry, that just doesn't wash.
What causes businesses to create jobs is demand. When customers with money in their hands come through the door but leave because the product is unavailable or they have to wait too long for a too small workforce to wait on them, businesses create jobs.
Getting more and more money to CEO's doesn't create jobs, it just increases the size of their yachts.
OK, what solution did the Business Roundtable come up with? Everyone should just work until they're 70 before collecting Social Security. They also thought that this was a great idea for Medicare as well.
After all, they reasoned, people are living longer. That's true, but how much longer depends on where you are on the economic scale. Since the 1970's the life expectancy of someone in the upper 50% of the income continuum has increased by more than 6 years. If you're in the bottom 50%, it's up by barely one year.
I suppose I'd be happy to work into my 70's if my job involved sitting behind a big desk, going to meetings and flying in a private jet all over the world to make deals in expensive restaurants all the while making $11.3 million per year.
Now lets talk about the coal miners, construction/factory workers, waiters, retail clerks and even teachers who find themselves on their feet for most of the workday. Oh, by the way, lots of those folks in their 50's are finding themselves laid off and unable to find work.
Note to Business Roundtable: Something else has increased since the 1970's and it's called "executive compensation." If I read the charts correctly, executive compensation--even corrected for inflation--has literally skyrocketed while real wages for the rest of us have stayed flat in real dollars, or even fallen a bit.
Just put one less gold faucet in the eighth bathroom of your McMansion and pay your fair share!
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