There is a 350word minimum requirement for your Initial Post for Discussion 6.1. Your 2 posts in response to your classmates, 130 word minimum for your classmate’s responses.1. Discuss social security benefits, and make suggestions to changes needed in the system.2. Describe your retirement goals. How do you plan to retire with relevance? (Retirement Redefined video).3. Discuss the “senior revolution: A look at Switzerland’s aging society” video. What are the pros and cons of the information presented?4. Elaborate on how design & technology may assist the aging population. Discuss the ideas from the “Why do we abandon great ideas when it’s for the elderly” video.5. You may add new, relevant to this discussion in the form of a youtube, article or anecdote to earn the 100 possible points. (Add an explanation as to this new material’s relevance).
Chapter 16
The Politics of Aging
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reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
Chapter Outline
Political activism among the elderly
Political debates about the aged
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16-2
Voting among Older People
Older people are much more likely than young
people to register to vote and to actually vote
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Changing Voting Patterns among
Young People
2000 – 36 percent of people aged 18 to 24 voted
2004 – 47 percent of people aged 18 to 24 voted
2008 – 52 percent of people aged 18 to 24 voted
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16-4
Voting Behavior and Health
In one study, voter turnout was 20% lower
among people with disabilities than among
people without disabilities
Lower turnout was concentrated among people
with disabilities who were not employed or who
were 65 or older, and who had difficulty going
outside alone
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Bloc Voting
Exists only if people vote on the basis of age
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Age and Voting Preferences
Older people are quite diverse in income, social
class, education, health, and other criterions
Their votes are rarely based on age-group
interests
Older people are nearly indistinguishable from
young adults in voting preferences
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16-7
Interest Group Politics
Interest groups
Organizations that represent individuals by
lobbying politicians to take certain actions and by
suggesting alternative proposals
Can also support candidates by informing their
members that a certain candidate favors or
opposes an issue of importance to them and
urging members to vote accordingly
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16-8
Gray Lobby (1 of 2)
Phenomenal growth of old-age interest groups in
1970s
White House Conference on Aging was first
held in 1961
Contributed to the expansion of the gray lobby
SOS, a coalition of senior citizen organizations,
was reinvigorated in 1981 after cuts in Social
Security were proposed
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16-9
Gray Lobby (2 of 2)
Main interest groups that represent older people
American Association of Retired Persons (AARP)
National Committee to Preserve Social
Security and Medicare
National Council of Senior Citizens
National Association of Active and Retired
Federal Employees
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16-10
Social Movement Politics
Social movements are collectivities of people
organized to promote or resist change
In general, older people are least likely of all age
groups to belong to a social movement
Townsend movement (1933) was the first
major social movement of the aged
Goal was to promote old age pension
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16-11
Medicare Catastrophic Coverage Act of
1988
Increased coverage of long-term hospital stays
Added:
A prescription drug benefit
Mammography screenings
Hospice care
Caregiver support
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16-12
The Red Hat Society
Dedicated to improving the image of older
women
Has hundreds of chapters in the United States
and has spread to nearly 30 other countries
Members of the Red Hat Society take to the
streets, malls, and restaurants wearing their
distinctive outfits
This tactic makes people notice older women
It also engages bystanders in a dialogue about
who they are and what they are doing
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16-13
The Aged as Office Holders
In general, the higher the office, the older is the
age of the officeholder
In the twentieth century, only three presidents
were 65 or older when they were inaugurated
John McCain was 72 when he ran for election in
2008
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16-14
Debates about the Aged: The
Deserving Elderly
For most of the twentieth century, the elderly
were viewed as deserving and needy
The public willingly supported income and health
care benefits for older people
In 1960, poverty rates for people 65 or older
were around 30 percent
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16-15
Debates about the Aged: Generational
Equity Debate
The argument is that the elderly have received
more than their fair share of public resources,
and this has left them as a group financially
better off than younger people
Few Americans agree that the elderly are greedy,
selfish, and unproductive
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16-16
Debates about the Aged: The
Entitlement Crisis
The two major entitlement programs are Social
Security and Medicare
The core thesis of the concept of an entitlement
crisis is that spending on Social Security and
Medicare is consuming a disproportionate share
of the federal budget, crowding out other social
needs
The entitlement crisis consists of two themes
Approximately one-third of the federal budget is
devoted to programs for older people
Spending on the elderly will harm future
generations
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16-17
Debates about the Aged: The
Ownership Society
Mainly directed at changing the nature of Social
Security
Would occur through privatization, where workers
would be allowed to divert a portion of their share
of payroll taxes into private accounts
Designed to appeal to younger workers who like
the idea of having the opportunity to build
wealth
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16-18
End of Presentation
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reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
Chapter 15
Poverty and Inequality
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or further distribution permitted without the prior written consent of McGraw-Hill Education.
Chapter Outline
Aging and social stratification
Gender inequality in old age
Race, ethnicity, and inequality
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15-2
The Theory of Cumulative
Disadvantage
Inequality is a cumulative process that unfolds
over the life course
Central premise – Those who begin life with
greater resources have more opportunities to
acquire additional resources
Those who begin life with little fall further and
further behind
Inequality is not random among the aged but
patterned
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15-3
Income and Poverty (1 of 2)
The poverty rate is the percentage of people
below the poverty level
Americans aged 65 and older have lower poverty
rates than other age groups
Certain subgroups (single, minority, and female) of
the elderly have very high poverty rates
© McGraw-Hill Education.
15-4
Income and Poverty (2 of 2)
Being single poses a particularly serious threat
to the economic security of elderly minority
women
Many black and Hispanic women have limited
work histories, low lifetime earnings, and no
personal pensions
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15-5
Why Do Women and Minorities Have
Lower Income in Old Age?
The largest source of racial disparity is income from
assetsstocks, bonds, and rental property
Whites are more likely than African Americans,
Asians, or Hispanics to receive income from pensions
Women are less likely than men to receive income
from private pensions
Social Security benefits are a much more important
part of the income of older minorities than they are
for whites
Even though women and minorities depend more on
Social Security benefits for income than do white
men, the benefits they receive are lower
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15-6
Gender Inequality and Work
Paid labor performed by women has increased
dramatically
Since 1965, mens housework time has almost
doubled
Familial responsibilities disrupt the employment
of women
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Social Security and Unpaid Labor
(1 of 2)
Current law favors the traditional family in which
the husband is the sole earner
Gender recognition
Presumes that gender equality can be achieved by
taking into account the differences between men
and women and taking measures to compensate
the disadvantaged sex
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Social Security and Unpaid Labor
(2 of 2)
Could eliminate the penalty mothers pay for
taking time out of the labor force to care for their
children by removing periods of child care from
the computation of Social Security benefit levels
Could provide child care credit under a special
minimum benefit
Recent reforms in the Social Security system
have emphasized gender neutrality
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15-9
Inequality in Social Security Income
(SSI)
Average monthly benefit is very low
Poverty among older women is less of a
problem in other Western nations
United States is the only country where single
elderly women have higher poverty rates than
older couples
© McGraw-Hill Education.
15-10
Inequality in Employer Pension
Coverage
Historically, women have worked in jobs that
lack pension coverage
Womens interrupted work histories also reduce
their pension eligibility
Retirement Equity Act of 1984
Allowed pension-splitting to become part of a
divorce decree
Now the pension is considered part of the
property settlement
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15-11
African American Elderly
Largest minority group
Racial discrimination in jobs and housing
impeded the accumulation of wealth by blacks
Racial differences in home ownership and in
value of homes
Reasons include racial discrimination by real
estate agents, white neighborhoods, and federal
policies including redlining
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15-12
Hispanic Elderly
Differences among the Hispanic-origin groups
are reflected in income
Poverty rate is the highest among Puerto Ricans
and Mexicans
Many older Hispanics worked in occupations not
covered by Social Security and are ineligible for
Medicare
Due to irregular patterns of work, many older
African Americans and Hispanics are ineligible
for private pensions
© McGraw-Hill Education.
15-13
Asian Elderly
Many have transcended barriers
Place high value on education
Currently, Asian Americans are the most
prosperous group of immigrants
© McGraw-Hill Education.
15-14
Native American Elderly (1 of 2)
American Indians have the highest
unemployment rates and the highest mortality
rates of any minority
Health care has improved
IHS-funded services for the Indian elderly provide
few chronic and long-term-care services
Elders are unable to obtain health care due to lack
of transportation
© McGraw-Hill Education.
15-15
Native American Elderly (2 of 2)
© McGraw-Hill Education/Barry Barker
© McGraw-Hill Education.
15-16
End of Presentation
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reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
15-17
Chapter 14
The Economics of Aging
© McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No
reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
Chapter Outline
Aging policy and the economy
The changing economic status of the aged
Public income sources
Private sources of income in old age
© McGraw-Hill Education.
14-2
Todays Older Generation
Elderly of today have benefited from the rising
tide of prosperity in the postWWII era
Jobs were plentiful
Divorce rates were low
More children grew up in two-parent families than
at any other time in American history
Higher levels of education than previous
generations
Each year from 1970 to 2008, those turning 65 have
had higher levels of education, more stable job
histories, and higher preretirement incomes
© McGraw-Hill Education.
14-3
Median Net Worth (1 of 2)
Total value of all assets (e.g., a house, other
property, and personal savings) minus any
debts
Median net worth is low among young adults who
are just starting their careers
Rises steadily until age 65
Begins to decline as people spend down their
savings to pay for health care and living expenses
© McGraw-Hill Education.
14-4
Median Net Worth (2 of 2)
Much of the wealth of older people is tied up in
their homes
Once the value of the home is excluded, the net
worth of this group falls
© Justin Horrocks/Getty Images RF
© McGraw-Hill Education.
14-5
The Economic Security of Future
Generations
The percentage of people with retirement
savings accounts is declining
Between 2007 and 2013, home prices in some
parts of the country declined by more than 50
percent
As a result, some families owe more than their
homes are worth
The collapse of the stock market in 2008
destroyed trillions of dollars of retirement
savings and forced people in or near retirement
to make serious adjustments to their plans
© McGraw-Hill Education.
14-6
Income Inequality in Later Life
There is a great disparity between the poorest
and the most affluent elderly
Some of the income inequality in later life is the
cumulative effect of a lifetime of low wages
People who are poor in their younger years are
likely to be poor in old age
Sometimes adverse life events such as
widowhood or a prolonged illness cause a
precipitous drop in income
The possession of assets separates the affluent
from the low-income elderly
© McGraw-Hill Education.
14-7
Aging of the Baby Boomers
Members of the baby boom cohort have had
fewer opportunities than their parents did
Have made decisions that reduced the effect of
adverse trends
Be Have married later than their parents
Have waited longer to have children
Have had fewer children
Impact of loss in earning power among men has
been offset by the increased labor force
participation of married women
© McGraw-Hill Education.
14-8
Status of Social Security
Social Security is the most successful program
of the American welfare
Has removed large numbers of older people
from poverty
© McGraw-Hill Education.
14-9
Changing Attitudes toward Social
Security from 2000 to 2010
Attitudes have shifted slightly toward the view
that too much is being spent on Social Security
Yet support remains high
The majority of people feel that the
government is spending too little or just about
the right amount on Social Security
© McGraw-Hill Education.
14-10
Why Is the Social Security Trust Fund
in Jeopardy?
Aging of the baby boom generation
Decline in population growth after 1960
People are living longer in old age
By 2025, there will be fewer workers
contributing to the system and more retirees
By 2025, revenue coming into the trust fund will
fall
By 2040, the trust fund will be depleted
© McGraw-Hill Education.
14-11
Options for Social Security Reform
(1 of 2)
Raising the retirement age
Raising the normal retirement age, which has
already been raised from 65 to 67, for people
retiring in the future
Reducing benefits by:
Lengthening the years of work needed for full
benefits
Reducing cost-of-living increases
© McGraw-Hill Education.
14-12
Options for Social Security Reform
(2 of 2)
Increasing revenues by increasing the present
payroll tax rate
Means testing
Eliminating benefits entirely for retirees with
high incomes
Privatization
Allowing individuals to divert a portion of payroll
taxes to private accounts
© McGraw-Hill Education.
14-13
Defined Benefit (DB) Plans
Typically pay a worker monthly benefits upon
retirement
Amount is based on years of service and prior
earnings
Problems with DB plans
Access
Vesting rules
Do not include yearly raises
Pension funds have been insufficient to cover
those eligible
© McGraw-Hill Education.
14-14
Employee Retirement Income Security
Act (ERISA)
Established minimum vesting standards
Set more stringent funding requirements
Established better methods of reporting plan
benefits and finances to workers
© McGraw-Hill Education.
14-15
Pension Benefit Guaranty Corporation
(PBGC)
If a pension plan is terminated because of a
merger or takeover and does not have sufficient
funds to pay the workers their pensions, the
PBGC assumes the responsibility for paying the
benefits owed
For a variety of reasons, companies have been
reluctant to establish new DB plans
© McGraw-Hill Education.
14-16
Defined Contribution (DC) Plans
The worker and employer or the worker alone
pays a fixed amount into an account that is
invested for the worker
Benefits at retirement are simply based on the
amount that has accumulated in the account
over the years
Most common plan is 401(k)
© McGraw-Hill Education.
14-17
Problems with DC Plans
Workers may withdraw funds early for other
needs
Participation is voluntary
Vulnerable to big fluctuations in value
Workers sometimes are encouraged or required
to place all contributions into company stock
© McGraw-Hill Education.
14-18
Personal Savings (1 of 2)
Saving early is an important aspect in having
sufficient retirement income
Problem of planning for retirement savings is
knowing how much to save
No one can predict the future
Uncertainties
Not knowing how long one will live
Labor market
Decline in health
Divorce
Age of retirement
Future rate of inflation
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14-19
Personal Savings (2 of 2)
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14-20
End of Presentation
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