Robert Samuelson has pretty much devoted his column to trying to distract readers from the policies that have redistributed income upward to the richest one percent, urging them instead to focus on high living seniors. The latest occasion is a new study from the St. Louis Federal Reserve Bank which found that median income for those aged 62 to 69 gained 12.3 percent to $50,825 from 2007 to 2012. It found that median for those over age 70 increased 15.6 percent to $31,512.
There are two points worth noting on this one. First is that while median family income did rise for older families, while it fell for younger people, the absolute income levels for those over age 62 were still considerably lower than for those between ages 40-61. The difference is 11.7 percent for those between the ages of 62-69. The gap in median incomes was 44.6 percent for those over age 70 compared with those ages 40-61. (One of the reasons for the rise in income is the mix of people over age 62 has skewed sharply downward over this period as baby boomers now fill the younger portion of the age group. The young elderly always have higher income since many are still working and they have not yet spent down their assets.)
The other factor worth noting is that much of the improvement in income is simply due to the fact that people are living longer so that more of these families are two person families now than was the case in 2007. If we look at the Census Bureau's estimates for median person income, we find that this rose by 7.8 for women between the ages of 65-74 between 2007 and 2012, but just 3.2 percent for men. For men over age 75 median person income rose by 2.3 percent, while it fell by 1.7 percent for women over age 75.
This picture may still look better than the median income for younger people, but this is a story about having the losers fight among themselves. Since its 1999 peak, the median income for men from age 62-74 has risen by 7.4 percent. For women in this age group it rose by 13.9 percent. For men over age 75 it by just 0.007 percent, while for older women it fell by 1.1 percent.
This is a period in which average per capita income rose by 21.1 percent. Clearly the typical senior was not getting their share of the gains of growth even if they might have been doing somewhat better than the young. The big gainers were of course the Wall Street folks, the CEOs, and highly protected professionals like doctors and dentists. Yet Samuelson insists that we need to beat up on the elderly.
There is one other point about Samuelson's agenda that deserves highlighting. He wants us to cut Social Security and Medicare because today's seniors have not taken as big a hit as those who are younger. However, any cuts to Social Security and Medicare will almost certainly be phased in through time. This means that they will likely have a bigger impact on people who are today in their forties or fifties than the people now in their sixties and seventies. Since this age group has taken a big hit even by Samuelson's measures, he is proposing cuts that will have their largest impact on exactly the group of people who have taken a big hit in the downturn with little time to recover. This doesn't sound like good policy.