Heres an interesting twist on the SS debate I found in the Freakonomics blog.
Exerpt:
"A 2004 study by Frank Sloan and Jan Ostermann at Duke University found that heavy drinkers contribute slightly more to Social Security, through their higher average lifetime earnings, than nondrinkers do. What’s more, since alcohol abusers tend to die sooner than moderate or nondrinkers, they draw less money, over time, from the Social Security trust fund.
Their conclusion: the elimination of heavy drinking (three or more drinks a day) from each successive group of American 25-year-olds would cost the Social Security trust fund $3 billion over the cohort’s lifetime. "
Its interesting to think that something that society frowns upon is something that is also inadvertently helping to keep one of America's biggest welfare institutions financially solvent! I wonder if this applies to drug use as well...kind of ridiculous.
Another Exerpt, which is open for debate:
"On another note, one of the puzzling underlying findings in this paper is the relationship between moderate alcohol consumption and increased lifetime earnings. For men and women alike, people who report downing two or fewer drinks a day earn slightly more than teetotalers do, on average. Heavy alcohol use tends to negatively impact earnings, as you might imagine, but not as much as abstinence. Sloan and Ostermann aren’t clear on the mechanics of this relationship, but the science seems solid.
Does drinking lead to higher earnings, or vice versa?"
any thoughts?
4 comments:
Well, there is a difference between correlation and causation. In this particular case i would say there is a correlation but one definitely does not cause the other. Heavy drinkers may contribute more towards social security, but i doubt it is because they are heavy drinkers. However, shame on me for ruining a very interesting study by trying to argue against it.... :(
I agree with you on the difference between correlation and causation. (And I'm also going to be a killjoy.)
With the second excerpt, it could just be that people who have high earnings have the opportunity and sometimes even the necessity to drink a lot, whether it's for networking, dining out, partying, etc. I'm inclined to believe that generally one doesn't cause the other, but both are associated with better jobs and a higher standard of living.
In any case, the Social Security fund for the future is already in crap condition. The Iraq war is being funded with the future, and money that could have fixed SS has gone to Iraq instead. The number of people contributing to the fund is insufficient to cover the influx of Baby Boomers needing to tap into the fund which, combined with a higher life expectancy, means they can be doing so for at least 20-35 years. Far longer than the fund originally intended.
So yeah, maybe encouraging heavy drinkers can pump more money into the fund. Saving the world one martini at a time worked for James Bond, right? But the fund is in such a state that even if everyone and their mother turned into a heavy drinker, it would barely make a dent in the problem (plus it would introduce a whole new slew of issues). The solution needs to address the flaws in the entire system. Maybe taxes should be raised to cover the fund. Or maybe the age requirement for accessing the fund should be raised, since people are retiring at a later age. Or maybe people should be given a choice of either SS or a private pension plan. (After what's happened on Wall Street, I doubt anyone's advocating the privatization of SS.)
Who knows what the best solution is? I guess for the moment while the government's preoccupied spending billions on wars and bailing out Wall Street, it's up to the bingers to save the day.
another possible explanation for the correlation between heavy alcohol use and higher earnings is that people who work jobs that pay more probably are more stressed, hence the use of more alcohol. since it is doubtful that there is a causal relationship between heavy alcohol use and higher earnings, encouraging alcohol use might not lead to an improvement in the SS system.
in response to the second excerpt: I think the reason why drinking moderately more can lead to an increase in lifetime earnings due to the fact that many jobs require a situation in which people meet with clients at restaurants or bars, in order to schmooze them. It can be thought of as some sort of a social stigma. Another situation in when people within the same firm go out together, or if the head bosses take the new guy out for a drink; it would seem akward and out of place for an employee to not drink.
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