What caused the so called problem with Social Security? Wealth inequality. Economist L. Josh Bivens and others have shown how the shift in national income to the wealthiest among us lowered Social Security’s revenues. Unemployment is a major contributor to lower Social Security revenues. Jobless people don’t pay payroll taxes. Wage stagnation in the middle class also cuts into revenues. It’s caused by a range of factors including runaway CEO pay and a declining minimum wage. (Middle- and lower-income workers with lower salaries pay less into Social Security.) Bank recklessness. Financial institutions therefore cut into Social Security’s revenues when they inflated the housing bubble, engaged in massive fraud, and gambled on a massive scale, leading to the financial crisis of 2008 and its aftermath.
Posted on: Sun, 29 Sep 2013 16:56:47 +0000
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