This article first appeared in the St. Louis Beacon, Aug. 18, 2011 - It is generally conceded that our current budget crisis is fueled in large part by "entitlements" -- or the money the government pays to subsidize much of its citizenry. That observation is at once both true and misleading.
Any accountant can scan the balance sheet and quickly conclude that entitlements comprise the biggest portion of Uncle Sam's expenditures. But the term, itself, is overly broad and thus fails to differentiate the details of these cash outlays -- and details, as the adage has it, is where the devil lives. Turns out some people are more entitled than others.
A 66-year-old worker who's been paying Social Security tax for the last 50 years may feel entitled to a pension. We can excuse his sense of privilege because the guy's contributed to the program for all of his adult life and has earned his payout. It's hardly fair for the casino to change the rules of the game after the hand has been dealt.
Besides, the fund is still solvent and perfectly capable of meeting its retirement obligations. Though estimates vary as to how long it will remain so, most of Social Security's problems could be addressed by instituting relatively modest adjustments to the program.
We could, for instance, eliminate the early retirement option. Most of the people who chose to hang up their tool belts at 62 have outside sources of income they plan to supplement with their government pensions. Many could still retire early by simply drawing more heavily on their private resources until Social Security kicks in.
Taking larger initial disbursements from deferred compensation funds, 401Ks or IRAs, they could later reduce these drafts when the government money began to arrive. We could also raise the standard retirement age by a year to 67 in deference to increased life expectancy. These options are not painless but neither are they catastrophic.
The problem is not with the people who've paid their dues but with those who collect before doing so. And though I trend Democratic when it comes to the economy, I reluctantly conclude that the government has got to stop subsidizing indolence.
An Aug. 11 article in the business section of the Post-Dispatch discusses the 2011 State of the St. Louis Workforce Report, an annual survey of area employers and displaced workers. The report cites a local unemployment rate north of 8.8 percent that "soars to more than 16 percent when involuntary part-time employees and workers who have stopped looking for a job are added to the mix." Despite those discouraging statistics, the primary complaint of area businesses is the lack of qualified applicants.
There are currently 6.9 unemployed persons for every job opening, yet employers report a dearth of "work ready" applicants with the requisite "soft skills" to succeed in the workplace. Among the deficiencies noted is the unwillingness "to learn the nuances of a new job from co-workers or other personnel." I suspect this reluctance to get with the program is made possible in large part by an option -- namely to do nothing and go on the government dole.
At present, I know five people who are collecting unemployment compensation. They are not necessarily representative of the unemployed in general, but do provide insight into the problem.
All are white, none has a criminal record, all have at least a high school degree and each has a credible history of employment. All fit within a broadly defined middle class, and each would agree that the government needs to crack down on welfare fraud.
The first is a female college graduate in her late 20s who was laid off when the state grant that funded her position was eliminated for reasons of austerity. She is actively looking for work and views unemployment compensation a temporary aid to help her survive a tough month or two before she finds something else. Fair enough.
The second is a woman in her late 50s who was down-sized from a well-paying job as an executive secretary. She'll begin collecting a pension from her former employer when she turns 62. She's not interested in another job because her husband's income and the couple's shared assets provide her a comfortable living. When her benefits expire, she'll simply wait for her private pension to take effect.
Next is a 30-something male with two kids. He lost his job after a run-in with the boss. Rather than deal with the hassle of looking for work, he moved into his employed parents' basement from where he collects $350 a week in unemployment and $580 a month in food stamps for his children. He intends to start looking for work when the government money runs out.
Then, there's the guy in his late 50s who lost his job when the firm he worked for closed its St. Louis office. Though he was fully vested for a pension that he began collecting immediately, he was "forcibly retired" and thus eligible for unemployment compensation. His wife is the co-owner of a profitable small business. When his benefits expire, he plans to "retire."
Finally, a man in his mid-50s was laid off more than a year ago. He receives a small pension -- not enough to live on -- from a prior employer. Recently, he applied at a local firm. Though the job he wanted had already been filled, he was offered a different position with the same pay and benefits. He didn't feel that the latter opportunity was a good fit for him and elected to remain on unemployment until something more to his liking comes along.
By my reckoning, that's 4 out 5 subjects in my decidedly unscientific sample who either don't need the public assistance they receive or have made no credible effort to provide for themselves. Ask any of these people whether they feel guilty about gaming the system and each will reply that they're entitled to the payments, so why not take them?
I suppose they're right. After all, if they don't take the money, the government will probably just give it to those damned loafers on welfare.
M.W. Guzy is a retired St. Louis cop who currently works for the city Sheriff's Department. His column appears weekly in the Beacon.