If our politicians tried to do to us what China’s politicians just did to their own citizens, I’ll bet Americans would take to the streets.
The Chinese government, in one fell swoop, approved two measures to prop up that country’s wobbly retirement system: an increase in the retirement age and a hike in the number of years workers must labor in order to qualify for a monthly pension.
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Read: China raises retirement age, currently among the lowest of the world’s major economies
This change was announced Friday by the country’s legislature, following “a sudden announcement earlier in the week that it was reviewing the measure,” AP reported, citing China’s state broadcaster.
There’s no sweet and sour here, just sour. And there’s a lesson in it for us, as we grapple with difficult questions about how to fix our own teetering retirement system. By teetering, I mean cuts to Social Security benefits of as much as 21% in a few years, unless we take action.
Read up on what China did. Over the course of 15 years, the retirement age for men will go from 60 to 63. For women, the retirement age will go up from either 50 or 55, depending on their job, to 55 or 58.
China’s problem is similar to our own, and to those of Western Europe and Japan. In these and other places, as the senior population explodes and takes retirement benefits, there aren’t enough younger workers to support them.
In China, this problem stems in no small part from its vaunted “one-child” policy, under which, beginning in 1979, families could have just that: one child. Fast-forward a few decades, and in 2020, China had about five workers for every retiree. But by 2050, that ratio is projected to shrink dramatically, to 1.6 workers per retiree. It’s one reason the Communist government ditched the one-child policy in 2015.
Unlike the Communist government in China, our politicians can’t compel us to have or not have kids. But you know what can? Economic pressures. The U.S. birthrate has been falling for years as young Americans grapple with the rising cost of housing, healthcare, child care and more. It’s reasons like these, along with often-massive student debt, that are discouraging couples of marriage age from getting hitched and starting families in the first place.
For the U.S., as for China, fewer babies means fewer people growing up, entering the workforce and paying onto the system. I mentioned that as recently as 2020, China had about five workers for every retiree. In the United States, in 2022, the ratio was far lower: about 2.8 workers for every retiree, according to the Peter G. Peterson Foundation, a nonpartisan think tank that focuses on the intersection between America’s fiscal health and its economy.
When you’re a top-down communist country, where no serious political opposition exists and where anti-government speech is quickly squelched, it’s pretty easy to do what China has done to bolster its retirement system. In the United States? Not so easy.
But everyone agrees that something has to be done. Raising the full retirement age for Social Security — currently 66 and change or 67 for most of us — is one option. Raising taxes on high earners is another. But most Democrats oppose raising the retirement age, while most Republicans oppose higher taxes. Letting more immigrants into the country to work and pay taxes would also help. But this, too, is a source of political disagreement.
Like the menu in a Chinese restaurant, perhaps something from both Column A and Column B will be the answer. But this would involve something from our politicians that China’s one-party Communist government doesn’t have to worry about: compromise.
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