Wednesday, September 14, 2011

1.75 Workers to Pay for One Social Security Recipient

Before this dreadful news came out, it took 3 full time workers to pay for one social security recipient. Today, the new figure is 1.75 workers to pay for one social security recipient. With unemployment to remain above 9 and more baby boomers retiring, there will not be enough workers to pay for social security. The government can extend the retirement age, cut benefits, or increase payroll tax; but one thing is certain, social security will go bust if reform is not taken seriously. - There were only 1.75 full-time private-sector workers in the United States last year for each person receiving benefits from Social Security, according to data from the Bureau of Labor Statistics and the Social Security board of trustees.

That means that for each husband and wife who worked full-time in the private sector last year there was a Social Security recipient somewhere in the country taking benefits from the federal government.

Most state and local workers are part of the Social Security system and pay Social Security taxes; and, since 1984, all federal workers have been part of the system and pay Social Security taxes. However, unlike private sector workers who pay Social Security taxes with private-sector dollars, government workers pay their payroll taxes out of wages government pays them with tax dollars or with money that was borrowed by government and taxpayers must eventually repay.

In its latest annual report, the Social Security board of trustees reported that the federal government’s total revenue from Social Security taxes in 2010—$544.8 billion—was not enough to cover Social Security’s total benefit payments—$577.4 billion.