10 Kasım 2012 Cumartesi

U.S. Labor Unions: Fewer and Bigger

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John Pencavel offers an angle on the evolution of American unions that I haven't seen recently by looking at the number of unions and their size. Short story: the number of American unions has declined, but the biggest unions have many more members than their precedessors. Pencavel has a nice summary of this work in "Public-Sector Unions and the Changing Structure of U.S. Unionism," written as a "Policy Brief" for the Stanford Institute for Economic Policy Research.

As a starting point, the first table shows the top five U.S. unions by total number of members in 1974, and then the top five unions by total number of members in 2007. A couple of patterns jump out. First, back in 1974, most of the biggest unions--except for the National Education Association--were private-sector unions. However, by 2007, most of the biggest unions were public-sector union. BSecond, both the biggest union in 2007 (the NEA) and the fifth-biggest union in 2007 (the UFCW) were substantially larger than the first- and fifth-biggest unions in 1974.


 Pencavel compiles evidence that from 1974 to 2007, the total number of unions declined by 101, much of that due to unions consolidating with others. Unions with more than 1 million members actually had 2.7 million more total members in 2007 than back in 1974; conversely, unions with fewer than 1 million total members had 6.8 million fewer total members in 2007 than in 1974. In other words, union members are much more likely to belong to a very large unions now than a few decades ago.  Pencavel also compiles a longer-run table, going back to 1920, to show the share of unions members belonging to the biggest unions. Notice that most of the shift toward much larger unions has occurred since the early 1980s, and most of it traces to a change in the membership share of the largest unions.



I suppose that one response to all this is "so what"? Well, if the largest companies in the U.S. economy in any given industry gain a dramatically larger share of the U.S. economy, it gives rise to comment. When the largest unions gain a dramatically larger share of the union sector, it's worth some introspection, too. 

Pencavel draws his conclusions cautiously. "[A] union movement concentrated in a smaller number of large unions implies a union movement in which much of its wealth is allocated by a smaller number of decision-makers. ...  A serious concern is that a more concentrated union movement dominated by public sector unions may politicize unionism: That is, the focus of union activity will be less on attending to grievances and to the conditions of members at their place of work and more on issues that are the province of politics. ... Unions have always been involved in politics so this would be a change of degree, not of kind, but it is an important change because, ultimately, more politicized unionism will not help the typical union worker."

 Albert Venn Dicey was a British legal theorist who died in 1922. Pencavel refers to one of his works from 1912, when Dicey was mulling over the issue of freedom of association, both in thinking about association through labor unions and association through product cartels. Pencavel notes that Dicey perceived a "classic dilemma" here, and Pencavel writes: "The principle that working people should have the freedom to form associations that represent and guard their interests is an intrinsic feature of a liberal society. But, if these associations exploit this principle to procure entitlements that expense of others, a new base of authority and influence is created that, at best, enjoys a greater share of the national wealth and, at worst, challenges the jurisdiction of the state. A balance is needed between promoting the principle of free association and avoiding the creation of a mischievous organization."

Dicey perceived this dilemma for freedom of association as applying both to the power of large unions and the power of large corporations. Here's Pencavel quoting Dicey in 1912: "In England, as elsewhere, trade unions and strikes, or federations of employers and lock-outs;…in the United States,
the efforts of Mercantile Trusts to create for themselves huge monopolies…force upon public attention the practical difficulty of so regulating the right of association that its exercise may
neither trench upon each citizen’s individual freedom nor shake the supreme authority of the
State.”

The central question about large public sector unions, of course, is whether in their ability to act as an powerful interested group that influences the results of state and local elections and then to have their conditions of employment determined in negotiations with officials of those same state and local governments, they have exploited the freedom of association in a way that creates what Pencavel calls a "mischievous organization." Pencavel ends on a questioning note: "This is not a prediction; it is a concern."

 For more about U.S. union members, see my post "Some Facts about American Unions" from last March. 



Can Agricultural Productivity Keep Growing?

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As the world population continues to climb toward a projected population of 9 billion or so by mid-century, can agricultural productivity keep up? Keith Fuglie and Sun Ling Wang offer some thoughts in "New Evidence Points to Robust But Uneven Productivity Growth in Global Agriculture," which appears in the September issue of Amber Waves, published by the Economic Research Service at the U.S. Department of Agriculture.


Food prices have been rising for the last decade or so. Fuglie and Wang offer a figure that offers some perspective. The population data is from the U.N, showing the rise in world population from about 1.7 billion in 1900 to almost 7 billion in 2010. The food price data is a a weighted average of 18 crop and livestock prices, where the prices are weighted by the share of agricultural trade for each product. Despite the sharp rise in demand for agricultural products from population growth and higher incomes, the rise in productivity of the farming sector has been sufficient so that the price of farm products fell by 1% per year from 1900 to 2010 (as shown by the dashed line).

What are some main factors likely to affect productivity growth in world agriculture in the years ahead? Here are some of the reactions I took away from the paper.

Many places around the world are far behind the frontier of agricultural productivity, and thus continue to have considerable room for catch-up growth. "Southeast Asia, China, and Latin America are now approaching theland and labor productivity levels achieved by today'sindustrialized nations in the 1960s."

The rate of output growth in agriculture hasn't changed much, but the sources of that output growth have been changing from a higher use of inputs (machinery, irrigation, fertilizer) and toward a higher rate of productivity growth. "Global agricultural output growthhas remained remarkably consistent over the past five decades--2.7percent per year in the 1960s and between 2.1 and 2.5 percentaverage annual growth in each decade that followed. ... Between 1961 and2009, about 60 percent of the tripling in global agriculturaloutput was due to increases in input use, implying thatimprovements in TFP accounted for the other 40 percent. TFP's shareof output growth, however, grew over time, and by the most recentdecade (2001-09), TFP accounted for three-fourths of the growth inglobal agricultural production."



Sub-Saharan Africa has perhaps the greatest need for a productivity surge, because of low incomes and expected rates of future population growth, but is hindered by a lack of institutional capacity to sustain the mix of public- and private-sector agricultural R&D that benefits local farmers. "Sub-Saharan Africa faces perhapsthe biggest challenge in achieving sustained, long-termproductivity growth in agriculture. ... Raisingagricultural productivity growth in Sub-Saharan Africa will likelyrequire significantly higher public and private investments,especially in agricultural research and extension, as well aspolicy reforms to strengthen incentives for farmers.Perhaps the single, most importantfactor separating countries that have successfully sustainedlong-term productivity growth in agriculture from those that havenot is their capacity for agricultural R&D. Countries withnational research systems capable of producing a steady stream ofnew technologies suitable for local farming systems generallyachieve higher growth rates in agricultural TFP. ... Improvements in what can broadly becharacterized as the "enabling environment" have encouraged theadoption of new technologies and practices by some countries; theseinclude policies that improve economic incentives for producers,strengthen rural education and agricultural extension services, andimprove rural infrastructure and access to markets." 
There's no denying that feeding the global population as it rises toward nine billion will pose some real challenges, but it is clearly within the realm of possibility. For more details on how it might be achieved, here's my post from October 2011 on the subject of "How the World Can Feed 9 Billion People."




U.S. Birth Rates

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Birth rates are one of those apparently dry statistics that have profound implications both for public policy and for how we live our day-to-day lives. Here are two figures from the Centers for Disease Control "National Vital Statistics Reports--Births: Preliminary Data for 2011."

Overall, U.S. birth rates are in decline (as shown by the light blue line) have fallen below the levels seen in the Great Depression, which up until recent years had been the lowest fertility level in U.S. history. The 2011 fertility rate of 63.2 per 1,000 women aged 15-44 is the lowest in U.S. history. The number of actual births is actually near a high, but that is because of the overall expansion of population.




This decline in birthrates is not evenly distributed across age groups. The figure below shows only data back to 1990. However, it illustrates that for women age 15-19 (red line), 20-24 (light blue line) and 25-29 (yellow line), birth rates have dropped noticeablyl. Although birth rates have dropped substantially for younger women, they have held steady for women ages and up. For mothers int he three age groups above 30 years, birth rates have been holding steady or rising.

These shifts in birthrates have powerful implications for our lives. Politically, the number of households with a direct personal interest in supporting programs that benefit children--because they have children under age 18 living at home--has declined. Here's a figure illustrating the long-term trend up through 2008 from Census Bureau report.  Back in the late 1950s and early 1960s, about 57% of U.S. family households included children under the age of 18. The share has been dropping since then, and is now approaching 45%. When it comes to decisions about everything from school funding and public parks up to pensions, health care, and other payments to those who are retired, it makes a real difference in a majority-rule political system if the share of families with children at home is more than 50% of the population or less.
The shift in birth rates represents a dramatic change in our personal lives as well.  In an article in the Fall 2003 issue of my own Journal of Economic Perspectives, economist and demographer Ronald Lee offered one point in particular that has stuck with me: "In 1800, women spent about 70 percent of their adult years bearing and rearing young children, but that fraction has decreased in many parts of the world to only about 14 percent, due to lower fertility and longer life."

More people are going through young adulthood and setting their original template for adult living without becoming parents, but then having children later into their 20s, or their 30s, or their 40s. Many people are raising children not in their 20s or 30s, but instead in their 40s and 50s. And with longer life expectancies, many people will find that while their care-giving responsibilities for children cover fewer years, their care-giving responsibilities for adult parents. Multi-generational family reunions used to follow a pattern of a few older folks of the grandparent generation, a larger number of their adult children and spouses, and then lots of children. In the future, there may be four or five generations in attendance at multigenerational reunions, and with many people having fewer or no children, the "family tree" will look taller and skinnier. We are already living our family lives in a substantially different context than earlier generations. The changes are large and getting larger, although sociologists and the science fiction novelists probably have deeper insights than do the economists into how such changes are likely to affect our personal lives.







What's Good for General Motors ...

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As President Obama and Mitt Romney jostled back and forth about the bailout of General Motors and Chrysler during the debate last night, I was naturally reminded of the 1953 confirmation hearings for Charles E. Wilson for Secretary of Defense. Wilson had been president of GM since 1941, overseeing both the company's transformation to wartime production and then its return to peacetime. Much of the confirmation hearing revolved around how he would sell off or insulate his financial holdings from his government job--and more broadly, the difficulties of separating his role at GM from the role of Secretary of Defense.

On January 15, 1953, Wilson had this famous exchange with Senator Robert Hendrickson, a Republican from  New Jersey:



"Senator Hendrickson. Mr. Wilson, you have told the committee, I think more than once this morning, that you see no area of conflict between your interest in the General Motors Corp. or the other companies, as a stockholder, and the position you are about to assume.
Mr. Wilson. Yes, sir.
Senator Hendrickson. Well now, I aminterested to know whether if a situation did arise where you had to make a decision which was extremely adverse to the interests of your stock and General Motors Corp. or any of these other companies, or extremely adverse to the company, in the interests of the United States Government, could you make that decision?
Mr. Wilson. Yes, sir; I could. Icannot conceive of one because for years I thought what was good for our country was good for General Motors, and vice versa. The difference did not exist. Our company is too big. It goes with the welfare of the country. Our contribution to the Nation is quite considerable. I happen to know that toward the end of the war—I was coming back from Washington to New York on the train, and I happened to see the total of our country's lend-lease to Russia, and I was familiar with what we had done in the production of military goods in the war and I thought to myself, "My goodness, if the Russians had a General Motors in addition to what they have, they would not have needed any lend-lease," so I have no trouble—I will have no trouble over it, and if I did start to get into trouble I would put it up to the President to make the decision on that one. I cannot conceive of what it would be.
Senator Hendrickson. Well, frankly, Icannot either at the moment, but we never know what is in store for us.
Mr. Wilson. I cannot conceive ofit. I do not think we are going to get into any foolishness like seizing the properties or anything like that, you know, like the Iranians are in over there, when they got into ---
Senator Hendrickson. I certainly hopenot.
Mr. Wilson. You see, if that onecame up for some reason or other then I would not like that. I do not think I would be on the job; I think I would quit because I would be so out of sympathy with trying to nationalize the industries of our country. I think it would be a terrible thing. That is about the only one I can think of. Of course, I do not think that is even a remote possibility. I think the whole trend of our country is the other way."

I've quoted here from the transcript of the actual hearings as printed in "Nominations: Hearings before the Committee on Armed Services, United States Senate,Eighty-third Congress, first session, on nominee designates Charles E. Wilson,to be Secretary of Defense; Roger M. Kyes, to be Deputy Secretary of Defense;Robert T. Stevens, to be Secretary of the Army; Robert B. Anderson, to beSecretary of the Navy; Harold E. Talbott, to be Secretary of the Air Force ..." January 15, 1953. 

But the hearing had been closed to the public, and the transcript didn't come out for a few days. When reporters asked what had been said, they were told that Wilson had simply replied: "What's good for General Motors is good for the country." Democrats picked up the phrase on the campaign trail and used it against Republicans for being overly pro-business. The highly popular Li'l Abner comic strip had a character named General Bullmoose who often said: "What's good for General Bullmoose is good for the U.S.A.!"

The story goes that for a few years, when the quotation came up, Wilson would try to offer some context, but after awhile he stopped bothering. When he stepped down as Secretary of Defense in 1957, he said: " "I have never been too embarrassed over the thing, stated either way."
 didn't come out for


Of course, it's interesting that the Democratic party that bashed Charlie Wilson back in 1953 now finds itself in the position of arguing the modern version of "what's good for General Motors is good for the country." For those who want details about the actual bailout, my May 7 post on "The GM and Chrysler Bailouts" might be a useful starting point.

Here, I would just make the point that while GM remains an enormous company today, it was relatively much larger in the 1950s. In the Fortune 500 for 1955, General Motors was far and away the biggest U.S. company ranked by sales. GM had $9.8 billion in sales in 1955, with Exxon running second at $5.6 billion, U.S. Steel third at $3.2 billion, followed by General Electric at $3 billion. The GDP of the U.S. economy in in 1955 was $415 billion, so for perspective, GM sales were 2.3% of the U.S. economy.

In 2012, GM's sales are $150 billion, but in the Fortune 500 for 2012, it now runs a distant fifth in sales among U.S. firms. The two biggest firms by sales were Exxon Mobil at $450 billion in sales, just a few billion ahead of WalMart. The GDP of the U.S. economy is about $15 trillion in 2012, so GM sales are now more like 1% of GDP, rather than 2%. And many of those who argue that it was in the national interest to give GM more favorable government-arranged bankruptcy conditions, rather than the usual bankruptcy court, would likely be quite unwilling to give bailouts to Exxon Mobil or to WalMart--despite how much larger they are.






How Retirement Age Tracks Social Security's Rules

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Back in 1983, as one of the steps taken to bolster the long-run finances of the Social Security System, was to phase in a rise in the "normal" or "full" retirement age. The normal retirement age for receiving full Social Security benefits had been 65, with "early retirement" with lower benefits possible at age 62. Under the new rules, the normal retirement age remained 65 for those born in 1937 or earlier--and thus turning 65 before 2002. It then phased up by 2 months per year, so that for those born six years later in 1943 or after, the normal retirement age is now 66. Written into law is a follow-up increase where a rise in the normal retirement age from 66 to 67 will be phased in, again at a rate of two months per year,  for those born from 1955 to 1960. 

How has this change altered actual retirement patterns? What are the reasons, either for retirees or for the finances of Social Security, to encourage still-later retirement?


Economists have long recognized that what a government designates as the "normal" retirement age has a big effect on when people actually choose to retire. Luc Behaghel and David M. Blau present some of the recent evidence in "Framing Social Security Reform: Behavioral Responses
to Changes in the Full Retirement Age," which appears in the November 2012 American Economic Journal: Economic Policy (4(4): 41–67). (The journal isn't freely available on-line, but many in academia will have access through a library subscription.)

Consider the following graphs from Behaghel and Blau. Each one is for those born in a different year, from 1937 up through 1942, as the normal retirement age phased up. These people are the ones hitting the normal retirement age of 65 in the early and mid-2000s. The solid line shows the probability of retirement at each age. The early retirement age of 62 is marked with a vertical red line; the previous normal retirement age of 65 is marked with a vertical red line; and the actual retirement age for that year as it phases up two months per year is marked with a vertical red line. The dashed line, which is the same in all the figures, shows for comparison the retirement pattern for those born over the 1931-1936 period.

The main striking pattern is that the probability of retiring at a certain age almost exactly tracks the changes in the normal retirement age: that is, the solid line spikes at the red vertical line showing the normal retirement age. There is also a spike at the early retirement age of 62. Here are the patterns.






The evidence here seems clear: People are making their retirement choices in synch with the government-set normal retirement age. This pattern isn't new, as the authors point out, a spike in retirement age at 65 became visible in the data back in the early 1940s, about five years after Social Security became law. Still, the obvious question (for an economist) is why people would make this choice. If you retire later than the normal retirement age, your monthly benefits are scaled up, so from the viewpoint of overall expected lifetime payments, you don't gain from retiring earlier. A number of possible explanations have been proposed: 1) people don't have other sources of income and need to take the retirement benefits as soon as possible for current income; 2) people are myopic, or don't recognize that their monthly benefits would be higher if they delayed retirement; 3) many people are waiting until age 65 to retire so that they can move from their employer health insurance to Medicare; 4) some company retirement plans encourage retiring at age 65.

However, none of these explanations give an obvious reason for why the retirement age would exactly track the changes in Social Security normal retirement age, so it seems as if a final "behavioral" explanation is that the "normal" retirement age announced by the government, whatever it is, is then treated by many people as a recommendation that should be taken. Choosing a retirement date in this way is probably suboptimal both for individuals and for the finances of the Social Security system.

From the standpoint of individuals, there's a widespread sense among economists that many retirees would benefit from having more of their wealth in annuities--that is, an amount that would pay out no matter how long they live. In the Fall 2011 issue of my own Journal of Economic Perspectives, 
Shlomo Benartzi, Alessandro Previtero, and Richard H. Thaler have an article on "Annuitization Puzzles," which makes the point that when you delay receiving Social Security, you are in effect buying an annuity: that is, you are taking less in the present--which is similar to "paying" for the annuity-- in exchange for a larger long-term payment in the future. They write: "[T]he easiest way to increase the amount of annuity income that families have is to delay the age at which people start claiming Social Security benefits. Participants are first eligible to start claiming benefits at age 62, but by waiting to begin, the monthly payments increase in an actuarially fair manner until age 70. "

They further argue that a good starting point to encouraging such behavior would be to re-frame the way in which the Social Security Administration, and all the rest of us, talk about Social Security benefits. Imagine that, with no change at all in the current law, we all started talking about a "standard retirement age" of 70. We pointed out that you can retire earlier, but if you do, monthly benefits will be lower. If the choice of when to retire was framed in this way, my strong suspicion is that many more people would react differently than when we announce that the "normal retirement age" is 66, and if you wait then your monthly benefits will be higher. Again, people seem to react to what the government designates as the target for retirement age.

However, this labeling change might encourage people to work longer, but it would not affect the solvency of the Social Security system, because those who wait longer to retire are, in effect, paying for their own higher monthly benefits by delaying the receipt of those benefits. However, the Social Security actuaries offer a number of illustrative calculations on their website about possible steps to bolster the financing of the system. One proposal about phasing back the normal age of retirement looks like this:  "After the normal retirement age (NRA) reaches 67 for those age 62 in 2022, increase the NRA 2 months per year until it reaches 69 for individuals attaining age 62 in 2034. Thereafter, increase the NRA 1 month every 2 years."

Thus, this proposal would represent no change in the rules for Social Security benefits for anyone born before 1960--and thus in their early 50s at present. Under this proposal, those born after 1960 would face the gradual phase-in--but of course, they would also benefit from having a program that is much closer to fully funded. would face the same phase-in as currently exists. The actuaries estimate that this step by itself would address about 44% of the gap over the next 75 years between what Social Security has promised and the funding that is expected during that time. Given the predicted shortfalls of the Social Security system in the future, and the gains in life expectancy both in the last few decades and expected in the next few decades, and the parlous condition of large budget deficits reaching into the future, I would be open to proposals to phase in a more rapid and more sustained rise in the normal retirement age for Social Security benefits.



9 Kasım 2012 Cuma

How Retirement Age Tracks Social Security's Rules

To contact us Click HERE
Back in 1983, as one of the steps taken to bolster the long-run finances of the Social Security System, was to phase in a rise in the "normal" or "full" retirement age. The normal retirement age for receiving full Social Security benefits had been 65, with "early retirement" with lower benefits possible at age 62. Under the new rules, the normal retirement age remained 65 for those born in 1937 or earlier--and thus turning 65 before 2002. It then phased up by 2 months per year, so that for those born six years later in 1943 or after, the normal retirement age is now 66. Written into law is a follow-up increase where a rise in the normal retirement age from 66 to 67 will be phased in, again at a rate of two months per year,  for those born from 1955 to 1960. 

How has this change altered actual retirement patterns? What are the reasons, either for retirees or for the finances of Social Security, to encourage still-later retirement?


Economists have long recognized that what a government designates as the "normal" retirement age has a big effect on when people actually choose to retire. Luc Behaghel and David M. Blau present some of the recent evidence in "Framing Social Security Reform: Behavioral Responses
to Changes in the Full Retirement Age," which appears in the November 2012 American Economic Journal: Economic Policy (4(4): 41–67). (The journal isn't freely available on-line, but many in academia will have access through a library subscription.)

Consider the following graphs from Behaghel and Blau. Each one is for those born in a different year, from 1937 up through 1942, as the normal retirement age phased up. These people are the ones hitting the normal retirement age of 65 in the early and mid-2000s. The solid line shows the probability of retirement at each age. The early retirement age of 62 is marked with a vertical red line; the previous normal retirement age of 65 is marked with a vertical red line; and the actual retirement age for that year as it phases up two months per year is marked with a vertical red line. The dashed line, which is the same in all the figures, shows for comparison the retirement pattern for those born over the 1931-1936 period.

The main striking pattern is that the probability of retiring at a certain age almost exactly tracks the changes in the normal retirement age: that is, the solid line spikes at the red vertical line showing the normal retirement age. There is also a spike at the early retirement age of 62. Here are the patterns.






The evidence here seems clear: People are making their retirement choices in synch with the government-set normal retirement age. This pattern isn't new, as the authors point out, a spike in retirement age at 65 became visible in the data back in the early 1940s, about five years after Social Security became law. Still, the obvious question (for an economist) is why people would make this choice. If you retire later than the normal retirement age, your monthly benefits are scaled up, so from the viewpoint of overall expected lifetime payments, you don't gain from retiring earlier. A number of possible explanations have been proposed: 1) people don't have other sources of income and need to take the retirement benefits as soon as possible for current income; 2) people are myopic, or don't recognize that their monthly benefits would be higher if they delayed retirement; 3) many people are waiting until age 65 to retire so that they can move from their employer health insurance to Medicare; 4) some company retirement plans encourage retiring at age 65.

However, none of these explanations give an obvious reason for why the retirement age would exactly track the changes in Social Security normal retirement age, so it seems as if a final "behavioral" explanation is that the "normal" retirement age announced by the government, whatever it is, is then treated by many people as a recommendation that should be taken. Choosing a retirement date in this way is probably suboptimal both for individuals and for the finances of the Social Security system.

From the standpoint of individuals, there's a widespread sense among economists that many retirees would benefit from having more of their wealth in annuities--that is, an amount that would pay out no matter how long they live. In the Fall 2011 issue of my own Journal of Economic Perspectives, 
Shlomo Benartzi, Alessandro Previtero, and Richard H. Thaler have an article on "Annuitization Puzzles," which makes the point that when you delay receiving Social Security, you are in effect buying an annuity: that is, you are taking less in the present--which is similar to "paying" for the annuity-- in exchange for a larger long-term payment in the future. They write: "[T]he easiest way to increase the amount of annuity income that families have is to delay the age at which people start claiming Social Security benefits. Participants are first eligible to start claiming benefits at age 62, but by waiting to begin, the monthly payments increase in an actuarially fair manner until age 70. "

They further argue that a good starting point to encouraging such behavior would be to re-frame the way in which the Social Security Administration, and all the rest of us, talk about Social Security benefits. Imagine that, with no change at all in the current law, we all started talking about a "standard retirement age" of 70. We pointed out that you can retire earlier, but if you do, monthly benefits will be lower. If the choice of when to retire was framed in this way, my strong suspicion is that many more people would react differently than when we announce that the "normal retirement age" is 66, and if you wait then your monthly benefits will be higher. Again, people seem to react to what the government designates as the target for retirement age.

However, this labeling change might encourage people to work longer, but it would not affect the solvency of the Social Security system, because those who wait longer to retire are, in effect, paying for their own higher monthly benefits by delaying the receipt of those benefits. However, the Social Security actuaries offer a number of illustrative calculations on their website about possible steps to bolster the financing of the system. One proposal about phasing back the normal age of retirement looks like this:  "After the normal retirement age (NRA) reaches 67 for those age 62 in 2022, increase the NRA 2 months per year until it reaches 69 for individuals attaining age 62 in 2034. Thereafter, increase the NRA 1 month every 2 years."

Thus, this proposal would represent no change in the rules for Social Security benefits for anyone born before 1960--and thus in their early 50s at present. Under this proposal, those born after 1960 would face the gradual phase-in--but of course, they would also benefit from having a program that is much closer to fully funded. would face the same phase-in as currently exists. The actuaries estimate that this step by itself would address about 44% of the gap over the next 75 years between what Social Security has promised and the funding that is expected during that time. Given the predicted shortfalls of the Social Security system in the future, and the gains in life expectancy both in the last few decades and expected in the next few decades, and the parlous condition of large budget deficits reaching into the future, I would be open to proposals to phase in a more rapid and more sustained rise in the normal retirement age for Social Security benefits.



Should Voting be Compulsory?

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Just to put my cards face up on the table right here at the start, I'm not in favor of compulsory voting. But I think the case for doing so is stronger than commonly recognized. Let me lay out the arguments as I see them:  low turnover, what the penalties look like in some other countries for not voting,  the free speech/constitutional issues, and whether any resulting differences in outcomes would be desirable.

The starting point for making it compulsory to vote begins with the (arguable) notion that democracy would be better-served if participation in elections was higher. Here's a figure from a post of mine a couple of months ago on "Voter Turnout Since 1964."  With some variation across age groups, voter turnout in presidential elections has been sagging over the last few decades.
Some nations have responded to concerns over low voter turnout by passing laws that make it a requirement to vote. Here's a list of countries with such laws, and the penalties that they impose for not voting, taken from a June 2006 report from Britain's Electoral Commission. The penalties are categorized from  "Very Strict" to "None."   But honestly, even the "Very Strict" is not especially onerous.


 In talking with people on this subject, I've found that one immediate response is that that compulsory voting must be a violation of freedom or free speech in some way. I have some of this reaction myself. But while one may reasonably oppose the idea of compulsory voting, the case that it violates a specific law or constitutional right is difficult to make. Indeed, the original 1777 constitution of the state of Georgia specifically called for a potential penalty of five pounds for not voting--although it also allowed an exception for those with a good explanation. If the U.S. government can require you to pay money for taxes, or compel you to serve on jury duty, or institute a military draft, it probably has the power to require that you show up and vote. Of course, a compulsory voting law would almost certainly include provisions for conscientious objectors to voting, and you would be permitted to turn in a totally blank ballot if you wish.  The penalties for not voting would be an inconvenience, but far from draconian.

For a review of the various legal and constitutional ins and outs of compulsory voting, along with some of the practical arguments, I recommend this anonymous 2007 note in the Harvard Law Review, called "The Case for Compulsory Voting."

The author points out (footnotes omitted): "Approximately twenty-four nations have some kind of compulsory voting law, representing 17% of the world’s democratic nations. The effect of compulsory voting laws on voter turnout is substantial. Multivariate statistical analyses have shown that compulsory voting laws raise voter turnout by seven to sixteen percentage points."

The anonymous author also offers what seem to me ultimately the two strongest arguments for compulsory voting. The first argument is that a larger turnout will (arguably) provide a more accurate representation of what the public wants, and in that sense will strengthen the bond between the electorate and its elected representatives. The second and more subtle argument is that compulsory voting would mean that political parties could focus much less on voter turnout. Less money and effort could go into turning out the vote, and more into persuasion.  Those who now vote almost certainly have stronger partisan feelings, on average, than those who don't vote. So politicians aim their advertisements and strategies at that more partisan group. Many negative campaign ads attempt to reduce turnout for a candidate: if turnout was high, the usefulness of such negative ads could be diminished. A broader spectrum of voters would push candidates to offer a broader spectrum of messages to appeal to those voters, and groups that now have low turnout would find themselves equally courted by politicians.

The question becomes whether these potential benefits to the democracy as a whole are worth the imposition of compulsory voting. The anonymous writer in the Harvard Law Review offers what is surely meant to be an attention-grabbing and paradoxical-sounding conclusion: "Although there are several legal obstacles to compulsory voting, none of them appear to be substantial enough to bar compulsory voting laws. ... The biggest obstacle to compulsory voting is the political reality that compulsory voting seems incompatible with many Americans’ notions of individual liberty. As with many other civic duties, however, voting is too important to be left to personal choice."

How might one respond to these arguments? Perhaps the most obvious answer is that if one looks at the countries that have compulsory voting--say, Brazil, Australia, Peru, Thailand--it's not obvious that their politics are characterized by greater appeals to the nonpartisan middle, or that the bond between the population and its elected representatives is especially strong.

For a more detailed deconstruction , I recommend a 2009 essay by Annabelle Lever in Public Reason magazine, "Is Compulsory Voting Justified?"  Basically, her argument comes down to a belief that the potential gains from compulsory voting are unproven and unsupported by evidence in countries that have tried it, while the lost freedom from compulsory voting would be definite and real.


In Lever's view, the evidence that exists doesn't show that political parties start competing for the middle in a different way, nor that outcomes are different. For example, northern European social democratic countries like Sweden don't have compulsory voting, and do have declining voter turnout.
 f people are disinterested or disillusions and don't want to vote for the existing candidates, it's not clear that threatening them with a criminal offense for not voting will build connections from the population to elected representatives. If political parties don't need to focus on turnout, they will immediately turn to other ways of identifying swing groups and wedge issues.  The penalties for not voting may not look large in some broad sense, but be clear: when we enter the realm of compulsory voting, we are talking about criminal behavior. will need to decide how large the fines or other penalties will be, and what happens to those (and there will be some!) who refuse to pay. If not voting is a crime, we will be making a lot of people into criminals--maybe guilty of only a minor crime, but still recorded in our information-technology society as breaking the law. It is by no means clear that having a right to vote should be reinterpreted as having a legal duty to vote: there are many rights that one may choose to exercise, or not, as one prefers. In a free society, the right to be left alone has some value, too. Lever concludes:


"I have argued that the case for compulsory voting is unproven. It is unproven because the claim that compulsion will have beneficial results rests on speculation about the way that nonvoters will vote if they are forced to vote, and there is considerable, and justified, controversy on this matter. Nor is it clear that compulsory voting is well-suited to combating those forms of low and unequal turnout that are, genuinely, troubling. On the contrary, it may make them worse by distracting politicians and voters from the task of combating persistent, damaging, and pervasive forms of unfreedom and inequality in our societies.

"Moreover, I have argued, the idea that compulsory voting violates no significant rights or liberties is mistaken and is at odds with democratic ideas about the proper distribution of power and responsibility in a society. It is also at odds with concern for the politically inexperienced and alienated, which itself motivates the case for compulsion. Rights to abstain, to withhold assent, to refrain from making a statement, or from participating, may not be very glamorous, but can be nonetheless important for that. They are necessary to protect people from paternalist and authoritarian government, and from efforts to enlist them in the service of ideals that they do not share. Rights of non-participation, no less than rights of anonymous participation, enable the weak, timid and unpopular to protest in ways that feel safe and that are consistent with their sense of duty, as well as self-interest. ... People must, therefore, have rights to limit their participation in politics and, at the limit, to abstain, not simply because such rights can be crucial to prevent coercion by neighbours, family, employers or the state, but because they are necessary for people to decide what they are entitled to do, what they have a duty to do, and how best to act on their respective duties and rights."

I don't know of any recent polls on how Americans feel about compulsory voting, but a 2004 poll by ABC News found 72% opposed--a slightly higher percentage than a poll taken 40 years earlier on the same subject. These kinds of results from nationally representative polls pose an additional level of irony. If Americans as a group are strongly opposed to laws that would require compulsory voting, it seems problematic to glide around this opposition into an argument that, really, although they don't know it yet, they would feel better off with compulsory voting.

In a 2004 essay on compulsory voting (in this volume), Maria Gratschew points out that a number of countries in western Europe that used to have compulsory voting have have moved away from it in recent decades: Austria, Italy, Greece, and Netherlands. In discussing the decision by Netherlands to drop its compulsory voting laws in 1967, Gratschew writes: "A number of theoretical as well as practical arguments were put forward by the committee: for example, the right to vote is each citizen's individual right which he or she should be free to exercise or not; it is difficult to enforce sanctions against non-voters effectively; and party politics might be livelier if the parties had to attract the voters' attention, so that voter turnout would therefore reflect actual participation and interest in politics."

Compulsory voting is one of those intriguing roads that looks better when not actually traveled.