CEPR Maintaining and Improving Social Security for Poorly Compensated Workers
Millions of American workers are poorly compensated for the work they do. This is not becausethey do not work hard or deserve adequate compensation. Rather, it is due to a political failure toensure that increases in economic growth and productivity over the last several decades have beenfairly distributed. One consequence of this failure is that many working-class Americans do notenjoy the living standards they deserve either during their working years or when they retire. Without the earned benefits provided by Social Security, along with Medicare and related healthinsurance benefits for the elderly, these workers would see their already modest living standards inold age fall even further below typical ones. The federal government should strengthen Social Security in ways that increase the retirementsecurity of middle- and working-class Americans. Particular attention should be paid to improving the living standards in retirement of workers in poorly compensated jobs, who typically have little orno retirement savings outside of Social Security. Some recent proposals to cut Social Security wouldput the retirement security of workers in poorly compensated jobs at further risk. While it would be wise to shore up the long-term finances of Social Security, this can be done without cutting benefitsfor working- and middle-class retirees. Finally, it is important to remember that Social Security by itself cannot be the sole vehicle for addressing an economy that is out of balance. We need to domuch more improve job quality in the United States by ensuring that poorly compensated workersget a better deal. This report examines the essential role that Social Security plays in bolstering the retirement security of poorly compensated workers.
reviews compensation trends. Despite healthy economy-wide productivity growth, workers in middle-wage and low-wage jobs have seen little improvement in their wages overtime. The collapse of the housing bubble has left many poorly compensated workers whoare near retirement age with little or no wealth to rely on in retirement.
provides background on how Social Security works and why workers in poorly compensated jobs can count on it being there for them when they retire.
discusses ways to increase the retirement security of poorly compensated workers.
reviews some troubling recent proposals that would cut Social Security benefits