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Why teenagers don't want to raise the retirement age

The French parliament is about to raise the national retirement age by two years, and high school students are at the barricades.  Link.  Why?  Truly, I don't know why teenagers do anything, but it's easy to see how this change will adversely affect them in the short term:  During the transition period, there will be fewer jobs open to young people because there will be more sexagenarians hanging on to job slots that would otherwise trickle down to new labor market entrants. 

Older workers have the power of incumbency:  As long as their jobs aren't actually eliminated, they can generally keep working as long as health and motivation permit.  So, when there is a labor surplus (job shortage), the burden falls most heavily on the young who have not yet established themselves in the work force.  This pops out of US age-and-education-dissected unemployment data for the Great Recession: The greatest increase in the unemployment rate has been among college graduates under 25. Link.

Some in the US want to eliminate Social Security entirely on the ground that it is wrong to tax the young and middle-aged to pay pension benefits to the old.  (They don't say whether it is also wrong to tax the middle-aged and old to pay for the even more valuable benefit of free public educations.)  Those who simply want to put US Social Security on an actuarily sounder long-term financial footing propose raising the retirement age but do not discuss the adverse impacts of that on youth unemployment (or other human effects). 

Perhaps some readers will object that I'm assuming the Lump of Labor Fallacy (aka the Lump of Jobs Fallacy), but I'm not. The "fallacy" originated in proposals to reduce unemployment rates by reducing the work week from 40 hours to 35 hours and spreading the work among 12.5% more employees.  Economists pointed out that, for a variety of reasons believed to be present in real labor markets, that wouldn't happen--or at least would not happen to the extent claimed.  The criticism is, I think, correct, but some misuse that fallacy to try to prove the opposite--that nothing will happen to the unemployment rate, which is also a fallacy: The Lump of Labor Fallacy Fallacy?  I don't assume that the number of jobs in the US will not expand if general economic conditions improve, but it would be equally false to say that because the number of people in the work force increases, an equivalent number of jobs will magically appear for them.  In fact, the number of US jobs as a percentage of working age US population has actually been shrinking--not just during the Great Recession but ever since 2000 and is lower now than in 1991. Link.  Whatever the number of jobs existing at any time, the competition for them will be more intense if sexagenarians stay in the work force longer, and the cohort most disadvantaged by that increased competition will be the youngest.

If we're going to increase the retirement age, what's the plan to increase the number of jobs?

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Reader Comments (1)

Yay! Someone who finally gets it about the difference between the lump-of-labor fallacy and the lump-of-labor fallacy fallacy.

October 23, 2010 | Unregistered CommenterSandwichman
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