For generations, Social Security has been the backbone of American retirement. That backbone is now breaking.
New estimates predict that Social Security’s retirement trust fund will be insolvent by 2032. At that point, benefits would be automatically cut by 24% across the board, equal to an average reduction of $500 per month. 68 million Americans would immediately lose this crucial lifeline.
The immediate structural reasons for this aren’t hard to understand. Social Security was conceived as a “pay-as-you-go” system in which today’s workers fund yesterday’s retirees. The program was a concession following the intense class-struggle battles of the early 1930s. When the program began 90 years ago, there were 42 active workers for every retiree, allowing the trust fund to build up a sizable reserve. That reserve has collapsed as baby boomers retire in droves.
An aging population with declining birthrates and fewer workers entering the labor force will only exacerbate this contradiction. From 1970 through 2010, there was one retiree for every new worker. Today, there are three retirees for every worker entering the labor force.
The historic 1.4 million drop in immigration last year makes it even worse. Undocumented workers contribute to the fund through payroll taxes, despite having no path to retiring with benefits. The estimated figure for their contributions in 2022 was $25.7 billion.
As a result, workers are stressed about retirement like never before. An Employment Benefit Research Institute survey found that almost four in ten workers don’t expect to retire until they are 70 or older, or ever at all. “Work ‘til you drop” looks less like dystopian anxiety and more like dark reality.
Three in four workers plan to work into their “golden years.” 72% of Americans aged 55 and older have debt, including average mortgage balances of $72,000, and credit card and medical debt averaging $9,000. The financial burden is forcing many older Americans to postpone retirement or to return to work after retiring. An AARP survey found that nearly half of retirees who reentered the workforce did so to cover living expenses and debt payments.
On top of these stressors, corporations have been doing their part by converting benefit pension plans into 401(k)s. This shifts both the financial obligation and the investment risk away from the employer and onto the worker. The real dollars that are earned through a lifetime of labor are collected by investment firms, thrown into the speculative stock market, and tied to the unpredictable swings of a system prone to economic crisis. When the markets crash, it isn’t Fidelity, Vanguard, or Charles Schwab who lose their retirement.
Does the ruling class have any options?
The solutions the capitalists propose include raising the payroll tax rate, raising retirement ages, or lowering monthly benefits. There’s a reason touching Social Security is seen as political suicide. All three of these austerity measures amount to a frontal attack on the working class’s conditions and would incite intensified class struggle.
France offered a preview of what happens when governments impose higher age requirements for benefits. In 2023, President Macron tried to push retirement from 62 to 64. What followed was the largest strike wave France had seen in decades.
Of the 38 OECD countries, 19 are expected to raise their retirement age. Far from an anomaly in France or the US, the retirement crisis is a feature of capitalism in its senile decay.
The same year that Social Security is expected to become insolvent, the global elderly care industry is anticipated to be worth $2.7 trillion.
Senior workers have spent a lifetime toiling away for the profits of the capitalists. They deserve to live their final years in peace and tranquility.Yet the same class that made its fortunes off the backs of these workers is now dismantling the very social programs that would allow for even a meager retirement.
Just as the mass struggles of the 1930s forced concessions like Social Security out of the ruling class, only a mass militant struggle today will force the billionaires to pay for workers to have a dignified and comfortable retirement..