We are living much longer – it is sustainable?

Antisa Khvichava

Birthday in bed: Antisa Khvichava rests during her 130th birthday party

The people continue to gather in Madison and the emotions grow higher by the day; what will be the tipping point? Who can say, the severity of the reaction by the public employees may force the governor, like the Tunisian president, to capitulate; or the bill that lead to the demonstrations in the first place may be passed and everyone will just have to move on; it does occur to me that the public employees unions are becoming like the Mandarins of China – a privileged class set apart from the rest of society. Which is not to question the value of their work, only to suggest that they have become a class by themselves. There are now more public than private union members and they work in the one industry that is guaranteed to survive.  Governments may be forced to cut expenses, but they are not going away completely.  And like the Mandarins the public employees are creating a very emotional and increasingly vocal opposition – the governor’s actions are in part a result of that opposition.  It is a story that is going to take years to play out and will have different outcomes in different locations.  In Nevada, it is not just state workers and teachers that are the focus of the opposition,  police and firefighters are viewed in the same light – over paid, with special privileges and unwilling to make sacrifices to help solve current budget problems; I am not saying that is the reality, I am saying there is a growing opposition to those employees that have that perception.

Sustainability is a relatively new concept in public discourse.  It is being applied in a multitude of circumstances from biology to economy and everything in between.  “We cannot continue to emit as many greenhouse gasses as we do without permanently changing the earth’s climate with disastrous consequence – it is not sustainable.”  “The prices of stock on Wall Street cannot continue to rise, housing prices will not rise at this rate for the long-term and we cannot continue to borrow without paying our debts – it is not sustainable.”  There a hundreds of examples like these where concept is used, including the way it is being used in state legislatures all around the country – and where it is meeting the unions and social security.

In a growing economy, such as the era between the Second World War and the Great Recession, the price of everything rose and so did the income of everyone.  Now one could argue that the growth is unequal as the the players in professional football are arguing.  The players say the owners share of the profits increases at a greater rate than their share and they are the ones creating the value, taking the risks and therefore deserve a larger share of the pie.  In a simple sense that is the argument that has existed between organized labor and management for at least the last 150 years.  From my point of view, there is not absolute right or wrong side of the argument – the balance between the two forces changes as conditions change.  And that is one of the problems in this time, conditions have changed and governments (I have no idea about the economics of professional sports) now have much less income than they had previously.  Having less income is forcing spending adjustments, and as in all businesses one of the largest, if not the largest, category of expense are employee related expense – wages, insurance and retirement funds.

In the current crisis, governments are being forced into radical changes in level and type of service they provide – some services are being dropped completely – libraries for example are experiencing major reductions  – and in this cutting process governments are reducing the number of employees, often dramatically.  In Reno, the city has been forced to layoff hundreds of people, including police and fire, and yet next year’s revenues will be lower yet requiring even more cuts, layoffs and changes.  But even with all of those cuts, many governments still are coming up short.  And that leads us all to retirement funds and social security ans sustainablity.

We have been told, whether we understand it or not, that life insurance is based on probability.  Your rates are determined by your probable age of death or more politely your life span.  The longer you are expected to live the higher your life insurance rate.  When the government started social security the life expectancy of the average American worker was about 66 years  and retirement age 65, work hard all your life, take a year to clean things up and then die; a simple and sustainable mode.   The current life expectancy is somewhere closer to 80 years now and increasing; that changes the math considerably.  Every government and public employee union is faced with the same dilemma as General Motors had when it was forced into bankruptcy.  Retired employees live too long.

No matter how many cuts governments (or car companies) make in current expenses, employee wages and benefits the cost of benefits keeps growing; I have an acquaintance who retired from a university about 10 years ago – he is only in his 60s – he took an early retirement to more fully enjoy his life.  He was a maintenance worker charged with cleaning and maintaining a specific building.   Today someone else does his job, but in theory the university could be paying as many as four people to do that same job; the current employee, my friend, the person who retired before my friend and possibly one who transferred into the job when my friend retired with only ten more years to go before he retired too. That is a great deal of money to pay to maintain one building.

That is simply unsustainable; it is the problem that faced General Motors, it is the problem our entire society is now facing.  I am a pre-baby boomer and with the baby boomers my generation (those that have not already retired and many have) is at the point of retirement – the longer we live on retirement the harder younger generations will have to work to feed us.  It won’t work forever, our society is going to have to find ways to keep us working, until we get closer to the original model – a couple of quick years after ending our gainful employment we quietly step into a grave.  Of course that begs one more question, just how long can our planet sustain a population that continues to expand and now increasingly refuses to die?  That will be he ultimate question of sustainability for the human race – if medically we can keep a person alive until they are 100, 120 or 150 should we? Can we afford to do it?  It is a very frightening question for me, because like Stanley Ho and Hosni Mubarak I am not ready to give up and turn over my allotted space on the planet to the next generation.


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February 2011
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