Government Reports on Aging, Inequality Tell Us What We Already Know

A report by the Government Accountability Office (GAO), commissioned by Senator Bernie Sanders, is as disheartening as it is unsurprising: Aging and retirement are much harder on the poor and the vanishing middle class than on the rich. Even Social Security, because of its structure, contributes to income and wealth inequality among seniors. Another report, this one released by the Census Bureau on Tuesday, reiterates the importance of Social Security in combating poverty, particularly among the elderly. On the heels of these reports, Senator Elizabeth Warren has unveiled her plans to make Social Security more equitable, both by increasing payments and by raising revenue through the closure of a tax loophole used by none other than VP Joe Biden.

The GAO study followed a cohort of Americans who were middle-aged (defined as between 51 and 61 years old) in 1992 through to old age in 2014. The results are clear, disturbing, and completely expected. The bottom four quintiles’ income remains relatively stable and closely distributed over the two decades studied. The top quintile, however, already made five times more than the next-highest-earning fifth at the beginning of the surveyed period—$250,000 a year as opposed to a little over $50,000. Because higher-earning individuals tend to hold more and better income-bearing investments—stocks, pension funds, and real estate—wealth inequality is even more prominent than income inequality among the elderly, with the end of working life at retirement doing nothing to reduce the disparity between the richest fifth and everyone else.

The American Prospect