Self-serving myths and the billionaires who love them

Mexican telecom mogul Carlos Slim, who with a fortune of $65 billion is the world’s richest man, believes that struggling countries need to raise their retirement age to 70 in order to help fix their finances:

Countries should have people work until they are older to reflect longer life expectancy rates, Slim reportedly said…Slim added the current retirement age was established “when jobs were more physical and people died at 60, but now we live until 85 or 90.”

El Universal reported one of the world’s savviest businessmen as saying: “We live in the knowledge society, so knowledge and experience should be valued. This is why a person’s work life could be increased.”

MYTH: People are living longer, so it makes sense to raise the retirement age.

FACTS:

• Numerous studies have documented that increases in life expectancy in retirement have been skewed in favor of those with higher incomes and more education, with higher income white men seeing the greatest gains, and low-income minority women seeing decreased longevity.

• Compared to new male retirees in 1982, today’s higher income male retirees can expect to live an additional five years, but lower income men are living just 1.1 years more in retirement.

• For women, overall life expectancy has stagnated, with lower-income women seeing declines in life expectancy, and upper-income and more educated women seeing modest improvements.

• Increases in life expectancies are mostly due to increased survival during childhood.

• Even under current law, younger generations will work considerably longer than workers in the past. The average number of years a 20-year-old man could expect to work rose from 39.0 to 42.0 between those born in 1899 and those born in 1949. Those born in 1999 will average 45.0 years of work before retirement age.

MYTH: Older workers have more experience, so it’s easy for those 55 and older to find jobs.

FACTS:

• Often older workers can’t work longer, even if they want to. An analysis of the latest Bureau of Labor Statistics data revealed that during April 2010, the job market for Americans 55 and older had never been worse.

• Additionally, many mid-life individuals are “structurally unemployed” meaning that demand for their now increasingly obsolete skills will not suddenly increase in demand after the recession ends. Many of them are underwater on mortgages and faced with family caregiving. responsibilities for aging parents, young children or adult children who cannot find work.

• There has been a 17% increase in age discrimination cases since 2007, according to the EqualEmployment Opportunity Commission (EEOC), suggesting struggles for older Americans in securing and maintaining good jobs.

MYTH: The beneficiary to worker ratio keeps dropping, so we need people to work longer in order to pay full benefits.

FACTS:

• With a fertility rate close to the replacement rate, any positive net immigration will contribute to labor force growth, which can in turn offset increases in life expectancy and stabilize the beneficiary-to-worker ratio.

• Even though the beneficiary-to-worker ratio is expected to rise with the Baby Boomer retirement, it will level off after 2035 despite projected increases in life expectancy at retirement.