A switch in poverty
“I can remember when I was a child several decades ago (we won’t say how many) that my family worried a lot about my grandparents,” says host Mary Walden. That wasn’t unusual because living in old age wasn’t easy for many economically. Once they stopped working, older folks had no labor income and pensions were meager. “Has that changed today?” she asks her husband, N.C. State University economist Mike Walden.
Mike Walden: “That has changed dramatically. Of course, the big change over the last generation or two has been the advent of Social Security and Medicare. I can remember also my grandfather, my mother’s father, having the same situation of really not having enough money to live on when he was not able to work anymore physically. He moved around between his children and lived with them, one week, one child, and another week, another child. But Social Security and Medicare dramatically changed that. In fact, those programs have resulted in a big drop in the poverty rate for those over age 65. Forty years ago 35 percent of people over age 65 were considered poor. Today that’s fewer than 10 percent. And at the same time that we’ve seen the economic stresses of elderly people go down, many say the economic stresses of the young have gone up. In fact, traditionally, poverty for the old was much higher than poverty for the young. Today, that’s switched. And, in fact, the poverty rate for individuals under age 35 today is twice as high as the poverty rate for those over age 65. So, again, we’ve had a major change in who is poor. Certainly Social Security and Medicare have helped those older folks live better during their retirement years. But some dramatic changes in the economy put big stresses on those younger workers.”Category: Economic Perspective