The Center for Budget and Policy Priorities presents a chart today that compares the social security benefits of the median worker relative to their earnings. Out of the 34 OECD countries, the United States comes in 31st:
Social security benefits are just 41% of the earnings of a median worker in the United States compared to over 90% in the Netherlands and overall OECD average of nearly 60%. This is partially due to the fact that the U.S. has a higher age at which seniors receive full benefits and offers lower benefits to those who retire early.
Nevertheless, the Republican Party and even many on the left have argued for further benefit cuts to reduce the debt, even though the deficit is falling at its fastest pace in decades. One proposal favoured by Republicans that President Obama has signaled an openness to is to raise the retirement age when beneficiaries can collect their benefits.
Opponents of that policy note that gains in life expectancy have accrued almost entirely to high-income households. The seniors that depend most on social security benefits have seen little change in their average lifespan. Increasing the retirement age would harm them immensely.
Recently, liberals have started to more strongly advocate for increased benefits with Sen. Elizabeth Warren leading the charge. In a speech on the Senate floor in November, she passionately defended the program, earning praise from the left:
With less savings and weaker private retirement protection, retirees depend more than ever on the safety and reliability of Social Security. Social Security works — no one runs out of benefits and the payments don’t rise and fall with the stock market. Two-thirds of seniors rely on it for the majority of their income in retirement, and for 14 million seniors — 14 million — this is the safety net that keeps them out of poverty.v God bless Social Security.
The absolute last thing we should do in 2013 — at the very moment that Social Security has become the principal lifeline for millions of our seniors — is allow the program to begin to be dismantled inch by inch.
Warren particularly emphasised the fact that the current measure that the Bureau of Labour Statistics (BLS) uses to adjust social security benefits to inflation does not accurately estimate the annual cost of living change for seniors. This inaccurate adjustment mechanism has screwed seniors over for decades. If the BLS had used a more exact measure, the U.S. would much be higher up the CBPP’s rankings than they are today.
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