The income gap is widening, with new research documenting how income for the ultra-rich 1 percent continues to rise even as income for those in the middle and below remains flat or, considering inflation, actually declines. This applies especially harshly to pensioners.
Yet, citing statistics, the government claims that the cost of living last year was flat, so there is no cost of living allowance (COLA) to justify an increase in Social Security retirement income this year.
The rationale was that the sharp drop in fuel prices, including gasoline, more than offset any increases in other cost of living, such as food, clothing and shelter. Therefore, the government said, no COLA would be needed. Pensioners who don't drive, of course, did not benefit from lower gasoline prices. Folks who depend on Social Security retirement income, however, do have to eat, pay rent and buy clothing. And while food, clothing and shelter are necessities, an automobile is not. A car, according to the data drones, is a luxury.
Officially, the Social Security Administration announced that because "there was no increase in the Consumer Price Index from the third quarter of 2014 to the third quarter of 2015," monthly benefits will not increase for 2016.
This, of course, did not consider increases in the Consumer Price Index for the final three months of 2015.
So while the rich get richer, thanks to the widening income gap, the rest of the population must cope with flat or declining income, even as the cost of living rises. Anyone who goes to a grocery store knows that. Nonetheless, the statistics of the past 12 months "prove" that the cost of living did not rise.
Here are some numbers, as reported in the New York Times on Monday, January 4: For those Americans in the top quarter of 1 percent of employed people, "their salaries rose 96 percent from 1981 to 2013, after taking account of inflation." And for top executives at companies with more than 10,000 employees, "overall pay jumped 140 percent versus a 5 percent drop for the typical employee."
The report quoted research by Nicholas A. Bloom, professor of economics at Stanford University, and four of his colleagues.
Separately, the Senior Citizens League, based in Washington, noted that the government has changed its COLA calculation method 18 times in the past 34 years. "Each time they've called it an improvement or a correction," the League said, "but each time the result was a lower COLA."
Moreover, the League said, Social Security recipients "have lost a staggering 22 percent of their buying power in the last 16 years."
The League is backing a petition drive to support legislation to reform the COLA calculation method as well as provide a $70 monthly increase in benefits.
The bill, which already has the support of 73 members of Congress, according to the Senior Citizens League, raise the income ceiling so wealthy individuals would pay more into the system. As things stand, employees stop paying into the Social Security retirement fund after their income reaches $118,500. However, half of all American workers earn half that amount -- less than $60,000 yearly -- while those in the rarefied quarter of 1 percent earn $640,000 annually. Yet their contributions to the Social Security fund stop at the $118,500 level.
Closing this "loophole," the League said, would put Social Security on a sound financial footing for the next 50 years, and prevent possible future benefit cuts. As it is, some analysts have said the Social Security fund would run out of money in about 20 years.
The bottom line is this: The wage and income gap must be closed, and one way to help do that is for Congress to authorize a one-time increase in benefits, and then reform the COLA calculation method.
So while it may be statistically true that the general, overall range of prices in America did not rise as of September of last year, they are rising now as the economy recovers and oil prices on the commodities market jump again in response to yet another Middle East crisis. In turn, this will lead to higher gasoline prices at the pump. And when the data drones take out volatile fuel and energy prices from last year's calculations, it's more than likely that the actual cost of living rose. Given events of the past few weeks, both in America and worldwide, those on fixed incomes till face an even harder struggle in 2016.
Given also that this is an election year, it behooves an alert politician to remember that pensioners vote, and they do so at higher rates than younger folk.
No comments:
Post a Comment