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Fair Play for Older Workers

June 25, 1989

There was a time when good social policy seemed to call for encouraging older workers to retire by threatening them with potential economic penalties if they worked beyond the age of 65. The aim was to open up jobs for younger members of the labor force. Congress simply set a limit on what people between the ages of 65 and 69 were allowed to earn if they went on working. Anything earned above that ceiling would trigger a reduction in Social Security benefits. This year, for example, a post-65 worker forfeits $1 in Social Security benefits for every $2 earned above a ceiling of $8,880.

This kind of punish-the-pensioner approach to job creation can no longer be justified on either economic or demographic grounds. Where once the nation had to be concerned about having too many workers, there are now labor shortages, nowhere more disturbingly than in areas where special job skills and experience are required. At the same time Americans are living longer,healthier and more productive lives. While more and more people are opting to retire early--often at 62 or even younger--many prefer to remain at least semi-employed beyond the traditional retirement age. This year, for example, more than 900,000 people in the 65-69 age group will earn more than $8,880 and, as a result, lose some of the Social Security income they are entitled to.

Recognizing the inequity of current policy, the Senate has now voted unanimously to let 65-69 year-olds earn up to $10,560 next year--instead of the $9,360 originally scheduled--before facing the loss of $1 in Social Security benefits for every $3 earned above the ceiling. That's some help, but why impose any ceiling at all on over-65 earnings? People who are 70 and older are permitted to earn as much as they can with no loss of Social Security benefits. Certainly the time has come to extend that same right to everyone 65 and older. Retaining a law that penalizes the older work force only deprives the nation of a valuable asset.

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