Here's my simple proposal for lowering the unemployment rate:

Step 1: Remove the income cap on the social security deduction. You pay a straight 6% on all earned income, period.

Step 2: Lower the retirement age to 60; 55 or 50 for jobs requiring physical labor. (The average stockbroker or senator may be willing to work full time into his 80's, but the women who clean their offices and toilets are tired!)

Step 3: Raise Social Security payments to make retirement more attractive to people.

As a 40 somthin farmer with 2 back surgeries under my belt...I can't fathom working until 67 or whatever they will require by then.
Give the working class a break and solve the florida mortgage fiasco at the same time.

End-arounds to lower the physical "unemployment statistic" are not an unemployment fix on main street.
Families need real income. People need to be "actually employed" to pay into SS.
The only way to fix unemployment is for people to work real jobs.

but giving the 60-65 age cohort the opportunity to retire with full benefits
would immediately create job openings

But our problem was created not because too many exist to fill too few positions, but because people that had jobs lost them in a recession. The US job capacity diminished. Retiring old people and hiring young people only transfers jobs. The same amount of tax revenue is being generated despite a technically lower unemployment rate. In fact, likely less revenue will be collected because new workers make less money.

Here's the thing, labor is a natural resource. Adding value to products through human actions and processes does create real value and real income. Excuse the libertarian terminology, but taking labor out of the supply (workforce) and attaching it to the overhead (government te et) can only hurt the economy. Said otherwise, there's little economic benefit to decreasing your workforce - especially while increasing benefits to those not in the workforce.

Unless removing the SS cap can cover enrolling MORE people on social security AND increasing the ss benefits AND the baby boomers all retiring (this was going to be a big problem BEFORE all the recession bullshit) this plan fix anything. Removing the cap just might cover all of that... but why push it?

I say remove the cap and just keep social security alive. Worry about growing SS when a healthy economy can support it naturally. If you are concerned about unemployed, just pump any excess funds from dropping the SS cap into unemployment funding. This would keep your labor supply high, unemployment benefits feeding people who are part of that supply, and keep social security healthy as it takes on the baby boomer burden.

Is there a shortage of goods? I don't think so, not with houses sitting empty and factories sitting idle.

Is there a shortage of energy/power? Not yet.

Is there a shortage of food? You got to be kidding!

So what we have here is a mal-distribution of all the goods and services we produce.If we have sufficient goods and services and a 10% unemployment rate, we don't need everyone working, we just need to figure out an equitable way to cut up the pie. When that gets out of hand, you end up in the situation Mexico is in now, when nobody from the zillionaire down to the guy with a taco wagon is safe from extortion and kidnapping.

So, tax our zillionaires and tell them it's a public safety anti-crime tax. Use the money to allow (not force) people to retire, thus opening up jobs for young wage earners.

A pension allows people to sit back and enjoy the fruits of their labor. Unemployment payments are vital, but each penny received burns away just a little bit more of self worth. When young folk feel unwanted and useless, bad things happen.

Good plan.

Among dozens of other things that this would effect in a negative way. The economy is not that simple.

the negatives...I am pretty dumb about these things

I am no more sure about the numbers than you are. But it doesn't pass the sniff test.

How many newly retired folks would be on the books?
How do you ensure/force any company to fill the now open job at the same pay?
Or if they fill the job at all?
How much would the raise in benefits need to be to get the proper reaction for those you want out of the work force?
Are the replacements properly trained and ready to step in to the jobs that will be hit the hardest?
What would the unions say about losing the upper end dues of paying members?

Like someone else in this thread pointed out, if you really dug in and looked at some numbers, i belive it wouldn't even be close to anything positive for the economy.

http://freakonomics.blogs.nytimes.com/2008/05/01/taxes-warren-buffett-and-paying-my-fair-share/

Mr Wolfers fails to note that if you add the 17% income tax he paid plus the 6% Social Security tax, he's paying 23% before any state or local taxes are included.

FactCheck: Removing $97,500 cap would be $1.3T tax increase
Clinton called Obama’s proposal to raise Social Security taxes on earnings over $97,500 per year, the current upper limit on which any tax is levied, a trillion-dollar increase on “middle class families.” Clinton said, “I do not want to fix the problems of Social Security on the backs of middle class families and seniors. If you lift the cap completely, that is a $1 trillion tax increase. I don’t think we need to do that.”

Taxing all earnings would indeed amount to a $1.3 trillion increase over the next 10 years alone, according to estimates by Cato Institute Social Security experts. A similar estimate comes from Citizens for Tax Justice, which figures the measure would bring in $124 billion per year.

Obama defended his proposal by saying it would fall only on the upper class: “Understand that only 6% of Americans make more than $97,000--so 6% is not the middle class--it’s the upper class.”
Source: FactCheck.org on 2007 Democratic debate in Las Vegas Nov 15, 2007

http://www.ontheissues.org/economic/barack_obama_social_security.htm

But, if we were the GREATEST generation, we'd have made a baby-boom that generated both consumer demand and jobs.

We should have NEVER have read and believed Paul Erhlich and his phoney 'population bomb.'























:sarcasm:

You don't tell me when to retire. I'm 63 and not ready to retire and couldn't afford it if I did.

He's my simple plan in case you are ever unemployed. Get a skill someone is willing to pay you for!

as long as they are capable of doing the work. On the other hand, I know a hell of a lot of people who would bail today if they could afford to.

Our comapny just had a large voluntary layoff. If you volunteered you got 2 weeks salary and the usual retirement benefits (like normal) PLUS a pension equalling 1 week for every year you worked with the company. One lady who retired worked over 50 years here! Over 100 employees took the deal, nearly all older who and nearing retirement anyways. Imagine a 30k-50k bonus for basically retiring. Not too shabby. Especially if you have a little part-time work lined up anyways.

Point being, they were not forced to retire - but chose to.
The company was able to free up alot of higher paying positions and nobody was forced to do anything they didn't want to.

Yet we have people who continue to work even though they could retire at full pay.

I need to work here for 3 more years to get a pension. I just started 2 years ago.

Besides which, even with federal student loans and/or grants, there is still not enough money.
We're just laying low, living on savings and eating small here.
*Shuddering*

you could graduate with a high school diploma and expect to make enough money to buy a house. Now, you have to pay for community college or a 4 year degree to even think of getting a decent job. But wait - there's more! The cost of tuition has skyrocketed even more than medical costs. SO the typical person borrows money to go to school to get a job, then spends the next 30 years working to pay off that school loan, save for educating any kids that come along, pay an outlandish mortgage or rent, and save for retirement. Did I mention that wages have been flat for many years?

I sometimes tell people that I am glad I lived when I did. It was easier for me even though I worked full time and went to school full time.

My plan would be paid tuition if you worked for a community organization or something that served the public when you graduated for a number of years. Like the military or GI bill but you don't need to go to war to get it.

I don't know what they are any more but I saw ads for them. I will see if I can find it again.

He paid off part of his school loan by working at way less than minimum wage for Americorps - as a teacher. When his time was up, the school told him he was great, but they didn't have a job for him! He's working elsewhere now, but not as a teacher.

Teachers here in New York generally get a good wage. We have an excess number of applicants in most districts. You must have a master's degree and a certain number of hours teaching to be certified here. Teachers in some other states make very little money. For some strange reason, the school districts in those states have a hard time attracting and retaining well trained good teachers.

So - it's a temporary fix to help today's kids by volunteering to teach in an understaffed school. A better fix would be to adjust the tax base to ensure that teachers get paid what they're worth.

I'm not knocking Americorps or any other volunteer group or the volunteers themselves. We just have to be careful that we aren't shooting ourselves in the foot here.

http://www.finaid.org/loans/publicservice.phtml
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But that aside, the numbers for your proposal don't come anywhere close to paying for themselves.

will employ more people and will give people time to volunteer to help those less fortunate.

Many businesses are barely staying afloat as it is. I keep seeing this idea being thrown out there, but it is naive. For it to work, shortening the week would have to be cost neutral but it is very far from that because employment isn't free to businesses even if the nominal wages paid are the same.

Hence why every time this idea is tried it produces no new employment. It is cheaper to pay overtime than to hire another person, and even if you were not allowed to work overtime hiring another person would never pay for itself all other things being equal.

My problem with #2 is the lower age for jobs with "physical labor". That is way too subjective and there would be endless disputes about whether a job had the specified amount of labor. It would be best to just settle on a flat age.

Some people drove a fork truck all night, others packed shipping crates. Now, driving a fork truck all night isn't exactly a treat, but the folks on the packing lines were lifting weights all night. As it happens, some people on the pack lines whined like crazy if they had to drive a truck. Of course, they all had more lifting and bending than an office worker.

Maybe if you can wear nice clothes to work without getting them wrecked, that should be the criteria!

:evilgrin: