Teenagers Should Care
about Social Security
by


This first appeared in the
North Hills News Record

A couple of weeks ago, U.S. Sen. Rick Santorum was in the area attempting to persuade some local high school students of the importance of the Social Security system. They weren't buying it.

One of the teenagers in the audience stood and defiantly asked, "Why are we worrying about when we're old and decrepit? Why aren't we worrying about now?"

Mr. Santorum didn't seem to have a good answer for her or any of the other teens who were more interested in discussing education, training and jobs than retirement benefits. He blew it.

Social Security is very relevant to the under thirty crowd. From dollar one, workers split with their employer a whopping 15.3 percent Social Security tax on the first $68,400 they earn. The tax rate has increased 17 times since 1951 and younger workers, who are usually a decade or two away from their peak earning years, usually pay more in Social Security taxes than income taxes.

That's a heavy burden to carry--especially when many of them are struggling to pay for an education, set up a household and start a family. That makes Social Security relevant to them now--not just 50 years down the road.

Of course, paying that much into some kind of an investment account wouldn't be so bad if all those billions of dollars truly were being invested using Webster's definition, "To lay out (money or capital) in business with the view of obtaining an income or profit," and not Government's definition, "To spend money stupidly to achieve reelection."

The way the federal retirement system is set up, Social Security dollars are added right into the budget. A dollar collected from the Social Security tax could be spent to build highways or fund snail darter research. There is no real investment (Webster's definition).

The amount young workers can expect to earn from their so-called retirement investment (Government's definition) grows steadily worse. Assuming there are some dollars left in the ill-named Social Security Trust Fund, most young workers will receive a negative return on their Social Security taxes -- less than they paid in.

This is where Social Security relates to education, training and jobs--the topics of interest to our high school students. Because Social Security taxes are so high, private saving is reduced and there is less capital available for new investment (Webster's definition).

This makes it more difficult for entrepreneurs to start a business and existing businesses to expand. Limiting capital also means workers are less productive. As a result, wages are lower than they otherwise would be.

If workers were allowed to invest (Webster's definition) some or all of their Social Security taxes in the private sector, there would be a lot more money for job creation, training and education.

Whether or not individuals will have the right to invest (Webster's definition) some or all of their own dollars is being heatedly discussed in Washington.

But nothing is likely to change unless young people realize what's at stake. That's why Mr. Santorum was making the rounds in the local schools. What happens to Social Security is a very important issue--especially if you're still in high school.

© Copyright Deborah A. Ayers 1998. All rights reserved.