Jan 1 1992

Finding Gold in Grey Hair

The New York Times was up to a bit of demagoguery recently (11/3/91), under the headline “Why Older People Are Richer Than Other People.”

Reporter Iver Peterson began by presenting awell-established fact–“the notion that some Americans will be the first generation to live at a lower level than their parents”– as a campaign slogan being used by “some Democratic candidates.”

Who are the lucky Americans who are living at a higher level? The answer the Times gave was not a class, nor a gender, nor a race, but an age group: The favorites of fortune are people over 65.

Selected figures can be found. Young people certainly are worse off than young people used to be, on average. Rich people tend to live long and accumulate wealth. Many poor people don’t reach 65, and so don’t bring the average down. Even so, the Times‘ headline is as absurd as the ancient joke that has a dollar-a-day railroad worker bragging, “Me and Jay Gould, we make $100,000 a year, on average.”

On retirement, the typical worker’s income drops by half. Often, his or her medical benefits also decline, while out-of-pocket health costs tend to rise sharply. Yes, many have accumulated equity in their homes, on paper, but taxes and other shelter costs have climbed. In fact, one out of eight old Americans is officially classified as living below the poverty level, and three more would be down there were it not for their modest Social Security pensions.

What the Times was looking at but could not see was a longterm decline in the share of the national income going to the working population. Old people are not getting richer. Rich people are getting richer.

John Hess is a columnist for the New York Observer.