President's Council on Aging Even the President's Council on Aging was able to delineate a remarkable record of economic improvement among the aged in its May 14, 1963, report, "The Older American," and forecast continued improvement in the future. The Council, since it is a creature of the administration, understandably maintained a steady bias in favor of direct Federal interjacence in the health care field. Consequently, its documentation of the brightening economic profile of the aged is particularly noteworthy. For example, while offering the opinion that incomes of the aged are "inadequate for even a modest level of living," the Council, at the same time, pointed out that in 1950 there were 12.3 million Americans over 65 with a total income of $15 billion, but by 1961, with the number of aged at 17 million, their income had jumped to $35 billion." "Thus," said the Council, "while the number of older people increased about 40 percent in the past decade, their total income rose by more than 130 percent. This compares, for the same period, with an increase of 80 percent in the total personal income of the entire population of the country." The Council also noted that during this period, the consumer price index rose only 26 percent, the cost of all medical care, 56 percent, and hospitalization, 125 percent. Members of the Council sought to discount the benefits of this remarkable rise in the economic status of the aged in these words: "This is not entirely a plus, however. For one thing, the purchasing power of the dollar in 1961 was 20 percent less than in 1950. For another, more of the Nation's older people now live in urban areas where costs are high. "Then, too, a substantial part of this total [income] goes to a relatively small group. Over 200,000 older Americans-1 out of 85-had incomes of $20,000 or more, and over 50,000 had incomes of $50,000 or more in 1961." A number of observations are appropriate. If the dollar was less valuable to the aged, it was also less valuable to the rest of the population whose wealth increased at a slower pace. More of the aged may now live in urban areas, but, on the other hand, more of everybody live in urban areas. Furthermore, as we pointed out earlier from Department of Labor studies, the income per person among aged families in metropolitan areas was higher than in the rest of the country and even higher than younger families in or out of the metropolitan areas. There well may be 200,000 Americans over 65 with incomes of $20,000 or higher and 50,000 with incomes of $50,000 and up. If so, there must be tens of thousands of others with incomes of $10,000 to $20,000. Yet, those who endorse the proposed Federal program, including members of the President's Council, are urging that a payroll tax increase be forced on younger families, whose median income before taxes is less than $6,000, so that hospitalization and other health benefits can be provided at taxpayers' expense to everyone over 65, including these tens of thousands with incomes of $10,000, $20,000, $50,000, and more. Brighter future for aged The Council forecasts a brighter future for the aged, since Practically everyone will be eligible for social security payments. Social security checks will be bigger because they will be based on higher average earnings than in the past. Private pensions will add more and more to the income of the aged." Older people who retire in the next 10 years are likely to have greater personal assets and savings and equity in property. Even more astounding than all this is the fact, noted by the Council, that in the 1963 fiscal year, $17 billion was spent or administered by the Federal Government alone on programs for the aged. This, we do not need to emphasize, amounts to an average of about $1,000 per person aged 65 or over. 23 "General tax money will supplement these social insurance payments," the Council said. "It will be used to provide public assistance payments to the 21 "The Older American." 22 It is estimated that by 1970, there will be nearly 40 million workers enrolled in private and government retirement programs. This estimate was made in Miss Sylvia Porter's column, "A Report on Pension Funds," Chicago Daily News, June 17, 1963. Miss Porter's article was based on the 43d Annual Report of the National Bureau of Economie Research and the study "Economic Aspects of Pensions" under the direction of Roger F. Murray, professor of economics, Graduate School of Business, Columbia University. 23 "The Older American," May 14, 1963, first annual report, President's Council on Aging. very needy; it will provide money for medical care for many with very low incomes; it will assist in making adequate housing possible; it will support needed social services for the aged and will make possible special programs for education, rehabilitation, and increasing employment opportunities." " The Council appropriately observed that all this adds up to “astonishing improvements for older people in the past 10 years." Indeed it does. And it prompts the question how the Council could compile this record of "astonishing improvements" in the economic fortunes of the aged over the past decade and at the same time offer the opinion that problems of the older American have come "dangerously close to making him a second-class citizen." 25 Facts on aged finances Still other evidence persuasively attests to the fact that the economic condition of the aged is not as bleak as has been painted. Surveys have shown that the aged in general have more assets and fewer debts than other Americans. Such surveys conducted by the University of Michigan Survey Research Center, for example, have disclosed: 1. Median total assets held by aged spending units were nearly twice as high as younger spending units, $8,080 compared with $4,630. (Spending units as used by the center include single persons and are therefore different from the Census Bureau's family classifications which include no fewer than two persons.) (Table 5.) TABLE 5.—Comparison of assets of older and younger people, 1960 Calculated from the data by Department of Economic Research, American Medical Association. Sources: "1960 Survey of Consumer Finances," Survey Research Center, economic behavior program, Ann Arbor, Mich. 2. Forty-one percent of older units had assets of $10,000 or more compared with only 27 percent of younger groups (fig. 2). 24 The Older American." The Older American." FIGURE 2.-Comparison of assets of older and younger people 1960 1960 Survey of Consumer Finances, Survey Research Center, University of Michigan. Percentage refers to "spending units," with specified age of head. 3. Eighteen percent of the elderly had net worth above $25,000 compared with 9 percent of the younger units (fig. 2). 4. Median assets of the lower income group-income under $3,000-was 10 times as much as the comparable younger units, $5,680 against $500 (table 6). TABLE 6.-Assets held by younger and older spending units according to incomes, Source: Survey Research Center, University of Michigan. "1961 Survey of Consumer Finances," (master copy: Study 688, 1960, table LA-111; number of cases: 64 or less, 2,537; 65 or over, 425). 5. The median equity in a home was $4,560 for the aged groups, nearly four times the $1,280 for the younger (table 5). 6. In the income category above $5,000, the survey showed 82 percent of the aged with assets in excess of $10,000, compared with 38 percent of the younger units (table 6). 7. Sixty-four percent of the aged were homeowners, compared with 53 percent of the younger groups (fig. 3). 8. Fifty-three percent of the aged owned their homes free of mortgage, and only 11 percent had any mortgage debt at all. In contrast, only 18 percent of the younger units owned homes clear of mortgage and 35 percent had mortgage indebtedness (fig. 3). FIGURE 3.-Housing status and mortgage debt spending units with head 64 or less and 65 or over 1960 Survey of Consumer Finances, University of Michigan, Survey Research Center 9. Only 4 percent of aged homeowners owed mortgages of $5,000 or more, but 43 percent of younger homeowners owed $5,000 or more (fig. 3). 10. Among the aged, 74 percent had no personal debt and 86 percent had no installment debt. In contrast, among younger units, only 34 percent had no personal debts and 48 percent no installment debts (fig. 4). |