What’s the big idea?

A lower re­tire­ment age?

The Washington Post Sunday - - OUTLOOK - — Car­los Lozada lozadac@wash­post.com

From Washington to Western Europe, politi­cians are slowly com­ing to terms with the need to cut — or at least slow the growth of — re­tire­ment ben­e­fits in or­der to deal with run­away deficits. In De­cem­ber, Pres­i­dent Obama’s deficit com­mis­sion rec­om­mended a se­ries of tough mea­sures to re­duce spend­ing, in­clud­ing rais­ing the re­tire­ment age and thus de­lay­ing the moment when peo­ple start col­lect­ing So­cial Se­cu­rity.

Ac­cord­ing to econ­o­mist James K. Gal­braith, though, this is ex­actly back­ward. In an ar­ti­cle in the lat­est For­eign Pol­icy mag­a­zine ti­tled “Ac­tu­ally, the re­tire­ment age is too high,” Gal­braith, a pro­fes­sor at the Uni­ver­sity of Texas at Austin, con­tends that older work­ers should be en­cour­aged to re­tire ear­lier, not later. With the econ­omy cre­at­ing few jobs, he writes, “com­mon sense sug­gests we should make some de­ci­sions about who should have the first crack: older peo­ple, who have al­ready worked three or four decades at hard jobs? Or younger peo­ple, many just out of school, with fresh skills and am­bi­tions?”

The an­swer he says, is ob­vi­ous — send the old folks home. He calls for a three-year win­dow in which the age to be­gin re­ceiv­ing full So­cial Se­cu­rity ben­e­fits drops to 62. “With a se­cure pen­sion and med­i­cal care, [the new re­tirees] will be hap­pier,” he writes. “Young peo­ple who need work will be hap­pier. And there will also be more jobs.”

Early last year, Rep. Den­nis Kucinich (D-Ohio) also called for a lower re­tire­ment age as a job-cre­at­ing ini­tia­tive and got nowhere with it, save per­haps a few in­ter­views with baf­fled fi­nan­cial jour­nal­ists. The pro­pos­als echo a fa­mil­iar, and ques­tion­able, no­tion on the left: that we should find ways to bet­ter par­cel out ex­ist­ing jobs. It’s the same logic that leads some coun­tries to con­sider cut­ting the num­ber of hours or days some­one can work each week, so that more peo­ple can share the work pool. In re­al­ity, the true chal­lenge is to fig­ure out how to cre­ate new jobs.

Gal­braith writes omi­nously that the ef­fort to in­crease the re­tire­ment age is “the most dan­ger­ous con­ven­tional wis­dom in the world to­day.” But some­times the con­ven­tional wis­dom is not only con­ven­tional, but wise as well.

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