It’s A Good Time To Be Old, Or Working For The Government

Americans are getting poorer – wage growth isn’t keeping up with inflation – but federal employees are getting richer. Particularly those working in the Washington DC area.

And the redistribution of wealth from young to old is creating inequality, too.

For instance, in terms of total compensation (salary plus benefits), federal workers earn 16 percent more on average than private-sector workers with the same experience, education, and responsibilities. They are paid out of your current and future taxes, not corporate profits. In what some have seen as an echo of the setting for The Hunger Games, the growing power of the federal government to dispense favors and direct whole industries has transformed the Washington, D.C., metro area into the nation’s wealthiest, boasting 10 of the top 20 counties for median household income.

Then there is generational inequality, which is also goosed by government policy. The Pew Research Center finds that in 1984, households headed by someone 65 years or older possessed on average10 times the wealth of a household led by someone under 35. By 2010 that gap had widened to 22 times. Part of that disparity is the result of payroll taxes that take about 12.4 percent (half from the worker, half from the employer) of every dollar of earned income up to $110,000 to pay for Social Security (for the past two years, the worker’s share of Social Security taxes has been reduced by 2 percentage points, a break that will expire at year’s end). Another 2.9 percent of all wages ‑ again split between employee and employer ‑ goes to Medicare.

Payroll taxes take a relatively bigger bite out of the paychecks of younger and poorer Americans even as old-age benefits are disbursed generally without regard to need. To add insult to the situation, Social Security will be paying out fewer dollars than new and future retirees will have put into the system. So at the very time when younger Americans have lost ground to their elders, they are compelled to pay into a fund that will shortchange them when they become eligible for it.

The American dream, or part of the American dream, is the idea that the next generation of Americans will do better than the last. And, throughout most of the nation’s history, that’s been true. In the aggregate, and despite some detours into economic depression and other problems, the trend for American prosperity has been upward for each successive generation.

Except, it seems, this one. Between the heavy weight of an enormous welfare and entitlement state, not to mention the cost of an expansive and increasingly intrusive government, America’s younger generations are set to get a pretty raw deal.

Rob Port is the editor of In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters.

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  • igx

    Old people have already been sucking money out of the future with Medicare and social security. Obamacare totally exacerbates it. Youth premiums will go up 40% and old people go down 16%. It’s idiotic.

    • kevindf

      Which demographic group voted for Obama twice?

      • sbark

        Many have now concluded its nothing to do with demographics………its simply we are well on the road to pacification is complete on 53% or more of the population……………..pacification via free stuff or entitlements.

        • kevindf

          Which means college loans will now be forgiven.

    • awfulorv

      A 1970 hundred dollar bill has, approximately, the purchasing power of a twenty dollar bill today. So, yes, the older folks are responsible for the loss in the dollar’s value. Old Representatives, old Senators, old Presidents, old Treasury secretaries, etc. etc. etc. And yet, when you had, damn near, the perfect guy, a skillful, knowledgeable, honest, money manager type, and a whiz on taxation to boot, as his VP, willing to take over and use their considerable expertise to solve the immense problems extant in this country, you turned up your noses at them . Many of you declared that his bible, for Christs sake, was not the right sort and, therefore, withheld your votes. Thus allowing a proven incompetent, and almost certainly worse, to continue to guide this nations descent into the abyss. Had I the means, I’d search for some of those Small Pox infected blankets the liberals always lie about, left over from the Indian Troubles, and present them to you hand sitters, ostensibly as gifts, for your bigoted viewpoints which have, perhaps, cost this country it’s last chance to exist, as a viable nation.

      • igx

        That is exactly dead-on. Romney / Ryan had the capability of fixing this thing without freaking out the bond market–maybe. Obama has no shot at all. None.

        The only question is if it happens after his term is up.

  • mikemc1970

    You’ll notice that as Detroit was slowly economically decimated by liberal policies that Washington DC was slowly enriched. All the wealth DC has amassed was stolen from private sources. Watch the same thing happen to Chicago and all the major cities in the US.

  • nimrod

    The elderly are also fortunate in that they probably won’t be around when it comes time to pay for all of the current spending.

    • Rob

      That’s the moral hazard isn’t it?

      Run-away entitlements. Unpayable pension obligations. An exploding national debt. All problems for the next generation. Just keep the benefits rolling for now.

    • whowon

      yep, and so will the workers who provided the revenue for our insane government. Oh, who will pay for everything then?

  • SigFan

    While I am in full agreement that government employees are far too numerous and far too well compensated I have to say something in defense of the elderly. You cannot fault them for being forced to pay into the Ponzi scheme and believing the government bull. They were sold a bill of goods and were forced to pay into something that they were promised would be there for them in their retirement years. Regardless of whether they “need” it or not (or some bureaucrat decides they don’t need it), that was the promise. Changing the rules might be necessary for the future security of the program – though I believe it will collapse eventually – but you also cannot expect the elderly to just say oh well, go ahead and steal what you said was mine. This is not something that will resolve itself easily or without conflict of some type.

    • Rob

      You cannot fault them for being forced to pay into the Ponzi scheme and believing the government bull.

      I don’t disagree, but does that mean we screw over the next generations?

      At some point, somebody is going to have to take it in the shorts. There’s no other way out of this.

      • SigFan

        There have been ideas put out that leave SS as it is for people at or above age 55 since they would not have time to build up any alternatives. For people younger than that, they should be required to put the same percentage as is withheld for SS into a private annuity. Eventually (20-30 years) the older people will be gone and the program could go away entirely, and younger people would have their own privately held and managed funds to live on. Of course the left will never buy that idea, since it removes government from the equation and power, but it would work and be the right thing to do.

  • awfulorv

    These old folks have abided by the laws, which were, legally, passed by congress. They paid into the system each, and every, paycheck and now, rightfully, expect the other side to abide by the promises made to them. I don’t recall a law being passed, though, which stated that, if you lay on your ass, and pop out kids, you will be paid an additional amount for each child you produce, up to a certain number, that is. Or where is it written that, having illegally entered the country, your every need, health, food, housing, transportation, will be taken care of by various, too benevolent, government agencies? Payments paid to undeserving recipients by liberal thieves which deplete the pot for those who have reason to believe the legal agreement they entered into would, and will, be honored. If monies are to be saved,and there is ample room to do so, I suggest these two programs, and many other wasteful liberal boondoggles are the obvious place to start.

  • kevindf

    This is what happens when the free lunch bunch feels their free lunch is being threatened.

  • Stuart

    Invalid argument me ass! Shows government jobs and that they are living far above the average citizen. Censorship?

  • Stuart

    In Fargo check out how much opportunity there is in working for the Post Office. I was censored by Robs minions for giving full clear and succinct details. Related information to issue of Government Employees having it better!

    • Rob

      Censored? You shouldn’t have been. I’ll check.

  • LastBestHope

    Why so many of the young don’t get it, explains a lot about being young. When this “screwed generation” hits age 40 and has figured out what happened to them, there will be a swing to the poltical right that will cut across all the demographics the democrats now own.

    Of course by then, we will be Greece to the 10th power.

  • Lynn Bergman

    Obama and the Senate will let the Bush Tax cuts expire… what they have preferred all along. Americans will finally realize, by the end of 2013, that tax increases actually reduce the revenue stream. We will also realize how bloated the defense department was. And the other automatic spending cuts will be healthy for our economy, offsetting the negative results of the tax increases.

    More people will be unemployed and dependent on government… which is what they voted for. They would rather have a “safety net” than actually earn a living.

    And this will go on and on… until a majority of Americans wish to earn a living again and vote that way… so don’t hold your breath for renewal, we’re a socialist people for now!

  • Stuart

    Did you check like you were suppose to on the censoring of my facts on why certain government were making these kind of wages in Fargo?