Can we make Social Security better for blue-collar workers?

Nari Ri (0:01)

NPR.

Adrian Ma (0:06)

This is The Indicator from Planet Money. I'm Adrian Ma.

Wayland Wong (0:08)

And I'm Wayland Wong. And it is Jobs Friday, the day of the month where we check the latest jobs numbers and spotlight trends in the labor market.

Adrian Ma (0:16)

That's right. And according to the Bureau of Labor Statistics, the unemployment rate in September ticked up a tenth of a percentage point to 4.2, so not much of a change there. And the economy added 29,000 jobs.

Also, the numbers for July and August were revised downward, so July actually turned from positive to negative with minus 10,000 jobs.

Wayland Wong (0:37)

Meanwhile, the rate of annual wage growth has continued to slow down. It was 3% in September. Compare that to inflation, which is around 3.4%.

So while the job market is kind of moving sideways, people's pay is not keeping up with rising costs.

Adrian Ma (0:52)

So those are the headline numbers. Now, let's turn to the focus of today's episode.

On Jobs Friday, we talk a lot about the labor force. But today, we're going to talk about retirement.

Wayland Wong (1:04)

The retirement force?

Adrian Ma (1:05)

That's pretty, has a good ring to it.

Wayland Wong (1:07)

I would like to join that force.

Adrian Ma (1:08)

Sign me up. We're focusing on retirement because one lawmaker recently introduced a bill to change Social Security.

The proposal would allow people with a history of working physically demanding jobs to collect full Social Security benefits at age 60 That's instead of age 67

Wayland Wong (1:26)

It would be a big change, and one that proponents say would make Social Security more fair. But what even counts as a physically demanding job, and is paying retirement benefits sooner for some people a good idea when Social Security is running out of money?

Adrian Ma (1:39)

We'll get into it after the break.

Wayland Wong (1:53)

The proposal to lower the retirement age to 60 for workers with physically demanding jobs comes from Congresswoman Haley Stevens, a Democrat from Michigan. The bill she's proposing is called the Blue Collar Social Security Fairness Act.

Adrian Ma (2:07)

Under current law, most people cannot collect full Social Security benefits until age 67 She argues her bill would make Social Security more fair because people who've spent years or decades in manual labor often have health issues that prevent them from continuing to work in their 60s.

Wayland Wong (2:24)

But what counts as a physically demanding job under her proposal? Well, Stevens gives as examples construction, roofing, nursing, and manufacturing.

Adrian Ma (2:33)

And, I mean, her district is right outside Detroit, so probably auto workers?

Wayland Wong (2:38)

Makes sense, but this would actually go beyond that. Her bill calls for the government to come up with the list of physically demanding jobs and updated every three years. Then depending on how old the person was when they worked one of these jobs, they would have to put in around 10 to 20 years in order to qualify for full retirement benefits at age 60

Adrian Ma (2:56)

Nari Ri is director of the retirement security program at the UC Berkeley Labor Center. And she thinks this is a good idea.

Nari Ri (3:03)

Workers in physically demanding jobs do deserve to retire sooner. And we want to make sure that people get to retire in dignity and that we're not forcing people into working until their bodies break.

Adrian Ma (3:17)

Now, Nari says Social Security is a fairly progressive program. For example, it's set up so when lower income workers start receiving benefits, they get a bigger percentage of their pre-retirement income than high earners do.

Nari Ri (3:30)

But the overall progressive impact is also kind of blunted by the fact that more educated and richer people tend to live longer, so they collect those Social Security benefits for longer.

Wayland Wong (3:41)

One study by the National Academy of Sciences found that people in the top 20 percent income-wise live an average of about 13 years longer than people in the bottom 20 percent.

Adrian Ma (3:52)

Thirteen years. That's a huge difference.

Wayland Wong (3:55)

Yeah, that's really, really stark.

Adrian Ma (3:57)

And of course, low income is not synonymous with blue collar. But when you look at the BLS wage statistics, the lowest paying jobs tend to be the kind we'd consider blue collar.

Nari Ri (4:09)

And in addition, blue collar workers start their careers, their working lives at younger ages than white collar workers. Blue collar workers typically start their working careers after high school.

Wayland Wong (4:20)

Nari thinks that allowing blue collar workers to retire at 60 would help offset the fact that they start work sooner and tend to die at a younger age. And there's data to suggest that most Americans might be OK with that.