Why Immigration Can't Fix the Social Security Deficit
"Different international migration scenarios would not greatly affect the sharp rise in the rich countries' proportion of dependent elderly projected for the coming century, although they could dramatically affect population size."
"In 2000, for example, the U.S. Census Bureau projected the nation's numbers in 2050 with different levels of immigration. Results ranged from 328 million, representing a 20 percent population increase with zero immigration, to 553 million, representing an 80 percent increase with the highest level of immigration--hypothetical net annual immigration rising to 2.8 million by 2050. Regardless of migration, though, the U.S. ratio of elderly to working-age people will rise steeply from 2010 until around 2035 and will gradually increase thereafter. By 2050 it is projected to reach 39 percent with zero immigration and 30 percent with the highest immigration."
(Source: Joel E. Cohen, "The Migration Wild Card," Scientific American, September 2005, p. 54).
Surely there is variation dependent on Immigration policies, no?
Plus, the difference between 30% and 39% is huge. Considering that the shortfall in SS in the optimistic scenario (the one that has actually been the most accurate to date) is non-existant, this kind of difference would make a huge difference.
If I am doiong the math correctly you are saying that under one scenario, there will be roughly 70 working age people to every 30 non-wroking age people, and the other 61 workers / 39 non workers. Just for the sake of putting real numbers in, if you assumea naverage of $50K/worker spread around evenly to all the people, it would be the difference between $35,000/person and $30,500/person. Not trivial.
August 22, 2005 8:20 AM | Reply | Permalink
First, the elderly/working-age population ratio is *not* the only parameter that matters in forecasting the solvency of Social Security, and, the fact that it will rise in the future doesn't mean the program is doomed.
Second, the SSA provides an estimate as to how much faster immigration would reduce the actuarial shortfall, holding everything else constant. Follow the link. Essentially, if immigration runs at 1.3 million annually (about what prevails now) instead of the forecasted 900,000 (and, both these numbers assume a shrinking share of immigrants in the workforce), then, the forecasted 75-year actuarial deficit shrinks by 25 basis points (from 1.92% of taxable payroll to 1.67%).
Granted, having faster immigration *alone* solve this deficit would imply awfully high levels. But, immigration helps the solvency of Social Security, period.
http://www.ssa.gov/OACT/TR/TR05/VI_LRsensitivity.html#wp92900
August 22, 2005 8:30 AM | Reply | Permalink
This latest post by Lind shows he's once again back to spouting unsubstantiated talking points which mirror his ideology.
As "theCoach" rightly points out, according to the most historically accurate scenario's estimate of the future of SS, it's stable well into the future and would little shortfall, if any, many decades out. The differences are small enough that should shortfalls occur (surpluses could also occur) they should be visible decades in advance and adjusted with minor benefit structuring.
So it's disingenuous to start with the proposition SS has a problem.
Secondly, it's false to imply immigration won't be a boon to SS. The increase in SS spending even by Lind's estimate is significant, enough to cover any likely deficit in SS.
Lastly, what that data fails to represent at all is the likely increases in elderly care efficiency. For example, Japan is now developing robotics to deal with it's elderly care problem in a high tech way. There are machines for assisted bathing for example (basically a space age robotic shower) which has tested very positively with elderly care patients as friendly and life improving technology.
The point being that technology applied to elderly care will make it far more efficient, make individual nurses into super nurses, and significantly reduce economic cost while improving quality of elderly care.
BTW: don’t expect Lind to acknowledge this, because it’s a central plank of his writings on the future economy that health care and elderly care will continue increasing as it has, lack innovation or efficiency gains, and result in a nursing explosion beyond our imagination. No one expect Lind to imagine the innovations of the future, he’s a think tanker not an engineer. However, it does underline a problem, once again it’s Japan and other high tech Asian countries which are innovating to solve their domestic future problems, while our high tech innovators are busy capitalizing in China and India, meanwhile our think tankers are proposing just adding more nurses.
Maybe we should try and develop industries to look at our societal problems in innovative ways, so that our think tankers actually have something to work with.
August 22, 2005 10:09 AM | Reply | Permalink
There is an implied problem in here somewhere, but it isn't clearly stated. What is it and what do you propose as a solution?
thepeoplechoose
August 22, 2005 10:19 AM | Reply | Permalink
Ick. The words "robot" and "elderly care" do not belong in the same sentence.
Japan and America values differ greatly with respect to appropriate uses of technology. Thank God.
August 23, 2005 4:36 AM | Reply | Permalink
you know,
You can explore a problem without having a solution in mind. This whole, "don't talk to me about such and such unless you can give me a complete packaged solution, which I will proceed to deride" approach to conversations, which is rife in blodworld --is really irritating. Exploring a problem can be productive, and the best solutions sometimes take time to come to.
August 23, 2005 8:04 AM | Reply | Permalink
Well excuse me. The entire post was taken directly from the referenced source and doesn't specify any conclusions or even a framework for a discussion.
The actual source is:
WORLD POPULATION IN 2050: ASSESSING THE
PROJECTIONS
Joel E. Cohen*
http://www.bos.frb.org/economic/conf/conf46/conf46d1.pdf
This is a long scholarly work and is not a simple read. The work presents a lot of facts and proposes some future projections that could be problematic. There are all manner of statements in it that clearly specify that many of the suppositions may not bear out. Any discussion of this would necessarily assume that one has read this entire document and understands something about the topic.
I still fail to understand the intent of simply posting this without a frame of reference or reason for posting this work with only a reference and nothing else.
thepeoplechoose
August 23, 2005 10:41 AM | Reply | Permalink
I looked a little more and found that the paper as presented was also discussed in the conference in which it was presented. It was presented in a Federal Reserve Bank of Boston conference. Discussion of the presentation is here:
http://www.bos.frb.org/economic/conf/conf46/conf46d2.pdf
And here:
http://www.bos.frb.org/economic/conf/conf46/conf46d3.pdf
This presentation, and the discussion of it in the sub-conferences is very honestly beyond me. The presenters are all PhD types and write accordingly. The conference was held in June 2001. In reading some of the presentation I am inclined to think that the poster, having grabbed convenient pieces, has done a disservice to all the work Joel Cohen did on this paper. There is far more to this topic than the few sentences that were posted. Grabbing a few sentences from a scholarly work such as this, and using it for some undefined purpose strikes me as a bit peculiar. Not knowing the intent of the posting I'll refrain from any speculation. I think it fair to say that to read the post absent the context of the entire presentation may lead to an opinion that omits a lot of pertinent information and thus could well be considered as biased.
thepeoplechoose
August 23, 2005 11:49 AM | Reply | Permalink
Anti-mass immigration is exactly the right stance for the Democratic party. It helps out the working American citizen.
I find it perplexing how so many purported liberals have abandoned supporting the working blue collar American citizen, and then to make it worse, if you complain about how mass immigration lowers wages, and demand that it be slowed down, they call you racist. It's almost as if these so-called liberals are actually neoliberals, who want to lower wages by importing cheap labor.
What we need to do is tax the rich; they are getting hte proceeds from improved productivity. THen use that money to pay Social Security benefits.
We need more high profile writers like you in the Dem party. Socially neutral and economically left of center. REALLY left of center on economics, not faux-Left of center, like the social liberals who are cussing you out so often....
September 6, 2005 8:46 PM | Reply | Permalink