More than half of elderly women, and nearly half of the nation's entire senior population, is "just one bad economic shock away from significant material hardship." That's the finding from the Economic Policy Institute, which just released a study of the nation's elderly, and the risk to them if policies like those floated in President Obama's grand bargain or Paul Ryan's budget were enacted. The key findings are pretty damned scary.
The argument that Social Security should be expanded rather than cut is gaining some steam with every report showing just how vulnerable retirees and near-retirees are to real poverty. Here's another one.
- Nearly half (48.0 percent) of the elderly population in the United States is “economically vulnerable,” defined as having an income that is less than two times the supplemental poverty threshold (a poverty line more comprehensive than the traditional federal poverty line).1 This equates to roughly 19.9 million economically vulnerable seniors.
- The older elderly—people age 80 and older—have a far higher rate of economic vulnerability (58.1 percent) than people age 65 to 79 (44.4 percent).
- Women are 10.7 percentage points more likely to fall below two times the supplemental poverty threshold than men (52.6 versus 41.9 percent)
- The majority of elderly blacks and Hispanics are economically vulnerable: 63.5 percent of blacks and 70.1 percent of Hispanics, age 65 and older, have incomes less than two times the supplemental poverty threshold. In comparison, 43.8 percent of whites are economically vulnerable.
- The share of economically vulnerable elderly varies across the United States, from a low of 35.4 percent in North Dakota to a high of 59 percent in the District of Columbia.
- Under House Budget Committee Chairman Paul Ryan’s proposed changes to Medicare, the predicted increase in seniors’ out-of-pocket health costs would raise the share of economically vulnerable elderly (those below two times the supplemental poverty threshold) by 8.4 percentage points, pushing the share up to 56.4 percent. That means almost 3.5 million more seniors would be economically insecure.
- Reductions in Social Security benefits arising from a proposed shift to indexing cost-of-living adjustments to the chained consumer price index (chained CPI) would also push more elderly into economic insecurity. For example, a switch to the chained CPI would boost the share of 70- to 75-year-olds below two times the supplemental poverty threshold by 1.2 percentage points, resulting in 132,000 more economically vulnerable seniors.
It's time to change the debate.
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