Strengthening Social Security Wage Reporting For Farm Workers

Barbara Robles
Associate Professor, School of Social Work, Arizona State University

Farm workers are at risk of not having their work count toward Social Security benefits because their employers may erroneously classify them as independent contractors or simply fail to pay Social Security taxes and report wages. Strengthening Social Security for Farm Workers: The Fragile Retirement Prospects for Hispanic Farm Worker Families supports legislation introduced in the 110th Congress, along with stronger enforcement of existing laws, to strengthen wage reporting. The proposal also notes that the changes would increase tax receipts and benefit the Latino farm worker population by increasing their Social Security benefits, providing better access to the Earned Income Tax Credit, and easing the burden on adult children of farm workers who have the triple burden of school debt, raising children and supporting aging parents.

Click here to download the full policy proposal developed as part of the project, Strengthening Social Security for Vulnerable Groups.

The project was funded by the Rockefeller Foundation’s Campaign for American Workers.

Increasing Social Security Benefits for Low-Wage Single Retirees

Patricia E. Dilley
Professor of Law, University of Florida Levin College of Law

Single retirees (that is, never married, divorced or widowed) are at high risk of being poor in old age. The decline in private pensions, rising out-of-pocket health costs, and declining housing values can be expected to make the already precarious financial situation of unmarried retirees even worse. Restoring Old Age Income Security to Low-Wage Single Workers proposes a change to the basic Social Security retired-worker benefit formula that would increase benefits for single retirees with at least 30 years of covered employment and low lifetime earnings. A second change would target single beneficiaries over age 85. Those who had at least 30 years of covered work, and received relatively low benefits (less than 75 percent of the average benefit), would receive a 10 percent benefit increase at age 85.

Click here to download the full policy proposal developed as part of the project, Strengthening Social Security for Vulnerable Groups.

The project was funded by the Rockefeller Foundation’s Campaign for American Workers.

A New Social Security Minimum Benefit For Low Lifetime Earners

Melissa Favreault
Senior Research Associate, The Urban Institute

Despite a lifetime of hard work, many workers end up poor or near poor in retirement. A New Minimum Benefit for Low Lifetime Earners examines a new minimum benefit that targets workers with long careers and low lifetime earnings, along with a modest credit that compensates for up to three years of low (or no) earnings due to care giving, unemployment, or poor health. The benefit at the full retirement age would pay 60 percent of the poverty threshold for a worker with 20 years of Social Security covered work and increase to 110 percent of the poverty threshold for a worker with 40 years of work. Caregiver credits would be available only in years when a child is under age 4 and only to one parent. The credit would be 60 percent of the average wage in the first such year, 50 percent in the second year and 40 percent in the third year.

Click here to download the full policy proposal developed as part of the project, Strengthening Social Security for Vulnerable Groups.

The project was funded by the Rockefeller Foundation’s Campaign for American Workers.

Why Do We Call Taxes a `Burden'?

Rashi Fein

This 1996 op-ed, originally published in The Washington Post, is as timely as ever.

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I learn a lot watching C-SPAN. The other night, one of Washington's leading economists was asked about using the tax system to help reduce environmental damage. The response? It certainly would be difficult, because it would increase the `tax burden.'

`Tax burden' is a phrase with which we are all so familiar that we don't stop to think what it means--nor what it implies. At first blush it seems value-free. But plainly a `burden' is something to be lifted. We don't refer to the monies we spend on movies, popcorn, milk or shoes as `burdens.' We refer to them--and think of them--as expenditures, some (movies and popcorn) optional, others (food, shoes) necessary. We don't speak of our `consumption burden.' Why, then, a `tax burden'?

Is it that our tax payments are not optional but our food expenditures are? That can't be it: We have to buy food. We can choose between steak and hamburger (or yogurt and tofu), but we can't choose between eating and starving. Indeed, the penalty for not eating far exceeds the penalty for nonpayment of taxes. yet we do not speak of the `food burden.'

More likely, we think of taxes as a burden because we're not quite certain what it is we're buying when we pay them. We miss, somehow, the connection between our tax dollars and the fire protection, the highways, the security against foreign powers and the biomedical research that our dollars buy. The problem is that few of the benefits we derive can be seen, touched or smelled. Moreover, the benefits we derive from government expenditures most often accrue to everyone; they do not come packaged in discrete units--this box of defense for me, this piece of highway for you.

And many of us assume that we'd continue to get whatever it is we're getting from government even if we didn't pay our taxes. Without spending our dollars, we'd have no milk on our tables, but we can't really imagine that schools and roads would disappear if you and I didn't buy them with our tax dollars. Clearly, government doesn't determine how many potholes to fill only after it deposits our tax dollars. If I don't buy that book, that restaurant meal, that aspirin--or if I cheat on my taxes--does government really subtract from the pothole-fixing budget or the salaries of judges? That's a tough connection to make--but without that connection, my taxes come to seem irrelevant, hence unnecessary, hence a `burden.'

Of course, no government program would suffer if you or I consumed less (and thus paid less in sales tax) or if I cheated on my return (and thus paid less in income tax). But if you and I both underpaid, everyone else would have to pay more. And it surely stretches language beyond acceptable usage to call not taking advantage of one's neighbors a `burden.'

Burdens are by definition oppressive, and our facile use of the term in connection with our taxes thereby encourages us to do everything we can (within the law) to ease them. Cheating on our taxes comes to seem acceptable (at least understandable), even though tax evasion is precisely analogous to shoplifting. If we take fire protection, guarantees on educational loans, clean air and water but fail to pay for them, we are stealing.

Our language shapes our attitudes. To weigh appropriate tax and expenditure policies in difficult when our language encourages us to think of our taxes as burdens not connected to the benefits we derive from them.

Some weeks ago, I received a brochure encouraging me to open an IRA. In that brochure, a 1040 tax return was labeled `pain,' while the application for an IRA was labeled `pain killer.' By implication, taxes (like pain) are to be avoided. By implication, I can continue to enjoy the benefits of government expenditures without paying for them.

We can debate `value for money,' the wisdom of particular government policies, programs and expenditures. We can argue as to whether we're spending too much here, not enough there. But that debate is distorted if we enter it with the view that any government expenditure--which means my tax dollar--is inherently burdensome.

I feel as I do because I remember what Justice Holmes wrote in 1904: `Taxes are what we pay for a civilized society' and what Franklin Delano Roosevelt said in 1936, `Taxes, after all, are the dues that we pay for the privileges of membership in an organized society.'

Now, at century's end, our economists tell us taxes are a burden, and our pension funds tell us taxes are a pain. Is it any wonder that our leaders vie to reduce the burden and the pain, even if in so doing our society becomes somewhat less organized and less civilized?

Improving Benefits for Widowed Spouses of Low-Earning Couples

Joan Entmacher
Vice President for Family Economic Security, National Women’s Law Center

Social Security is especially important to older women, particularly widows. Most poor elderly women are widows. Social Security survivor benefits help to bridge the transition to widowhood, but the benefits are less adequate when both the husband and wife had worked at low pay. Strengthening Social Security Benefits for Widow(er) s: The 75 Percent Combined Worker Benefit Alternative proposes to increase benefits for widowed spouses of low-earning dual-earner couples. The new widowed-spouse benefit would be 75 percent of the combined retired-worker benefits of the husband and the wife, but would be capped to not exceed the benefit for one person who had earned the average wage over a career.

Click here to download the full policy proposal developed as part of the project, Strengthening Social Security for Vulnerable Groups.

The project was funded by the Rockefeller Foundation’s Campaign for American Workers.

Increasing Social Security Benefits at Advanced Ages

John Turner
Director, Pension Policy Center

People who live into their 80s and 90s face a growing risk of becoming poor. They rely more and more on Social Security because their other sources of income decline as they age: private pensions, if received, are eroded by inflation; income from work is very rarely an option; and financial assets may have been spent. Longevity Insurance, Strengthening Social Security at Advanced Ages proposes increasing benefits at age 82 (about the average life expectancy at age 65) for beneficiaries with low Social Security benefits and long work histories. This longevity insurance would improve financial security for individuals who live longer than the average life span.

Click here to download the full policy proposal developed as part of the project, Strengthening Social Security for Vulnerable Groups.

The project was funded by the Rockefeller Foundation’s Campaign for American Workers.

Easing the Impact of Increasing the Retirement Age: Occupational Disability

Eric Klieber
Director, Retirement Actuary, Buck Consultants

Legislation in 1983 increased from 65 to 67 the age at which Social Security pays full retirement benefits. The change lowers retirement benefits at each age they are claimed. Disabled-worker benefits remain unreduced, but are not available to individuals who fail to meet a strict test – “inability to engage in any gainful activity” – yet are unable to continue in their jobs. Strengthening Social Security for Workers in Physically Demanding Occupations proposes a benefit for such individuals based on an occupational disability test – “inability to perform the essential duties of one’s current occupation.” Making such an occupational disability benefit available at age 62 could protect recipients from retired-worker benefit reductions (or part of such reductions) due to increasing the full benefit age.

Click here to download the full policy proposal developed as part of the project, Strengthening Social Security for Vulnerable Groups.

The project was funded by the Rockefeller Foundation’s Campaign for American Workers.

Increasing Social Security Benefits for Family Elder Caregivers

Shelley White-Means
Professor of Health Economics, University of Tennessee Health Science Center

Rose Rubin
Professor, Department of Economics, University of Memphis

Informal care provided by family members improves quality of life for frail elders, allows them to remain in the community instead of in nursing homes, and saves Medicaid dollars. Providing the care also imposes opportunity costs on caregivers that weaken their own retirement security. Retirement Security for Family Elder Care Givers with Labor Force Employment proposes to provide up to four years of Social Security credit to individuals who provide care to elders. The elders must be certified to need levels of care that would qualify for Medicaid coverage. The value of the credit would be the caregiver’s average wage in the three years before care giving interrupted earnings. The authors suggest the credit could be financed based on the reduction in public spending for nursing home care.

Click here to download the full policy proposal developed as part of the project, Strengthening Social Security for Vulnerable Groups.

The project was funded by the Rockefeller Foundation’s Campaign for American Workers.

Helping Homeless Individuals with Serious Mental Illness Get Disability Benefits

Yvonne Perret
Executive Director, Advocacy and Training Center

Deborah Dennis
Vice President, Policy Research Associates, Inc

Margaret Lassiter
Senior Project Associate, Policy Research Associates, Inc

Social Security and SSI disability benefits are often the main sources of stable income for people who have serious mental illness. Individuals who are homeless face particular barriers in navigating the application process. They typically lack a mailing address, transportation, and a treatment history from accepted medical sources (physicians or licensed psychologists). Improving Social Security Disability Programs for Adults Experiencing Long-term Homelessness proposes three strategies to address these barriers: (a) expand the acceptable medical sources to include professions likely to be available in publicly funded health and mental health care systems; (b) use SSA’s presumptive eligibility for SSI disability benefits for people with schizophrenia who are homeless for at least six months; and (c) modify the administrative process to accommodate homeless individuals consistent with SSA’s Homeless Plan of 2002.

Click here to download the full policy proposal developed as part of the project, Strengthening Social Security for Vulnerable Groups.

The project was funded by the Rockefeller Foundation’s Campaign for American Workers.