Inequality in the Social Security Debate

Source: Sarah Anderson and Scott Klinger, Institute for Policy Studies, March 14, 2013

How benefit cuts would impact health industry CEOs versus home health aides…The Fix the Debt campaign, a large, well-funded corporate lobby group, has been leading the charge for massive new corporate tax cuts paid for with cuts to Social Security, Medicare, and Medicaid. The nearly 100 CEOs who are leading Fix the Debt have relatively little to lose from cuts to these benefit programs, particularly when compared with low-wage workers. To illustrate this disparity, we analyzed the potential impact of several proposed Social Security reforms on two Fix the Debt CEOs from the health care industry and a representative low-wage worker from that same sector….

The CEOs of CVS Caremark and UnitedHealth illustrate how lucrative the health industry can be for those at the top. At CVS Caremark, Merlo has accumulated a retirement stash of $46 million, the fifth-largest of the Fix the Debt member CEOs.2 If invested in an annuity at age 65, Merlo’s employer-provided nest egg would deliver him a monthly retirement check of $263,169 for the rest of his life. Combined with Social Security benefits, Merlo could expect monthly retirement income of $267,445 on average over the next 20 years.

UnitedHealth CEO Stephen Hemsley, after only 15 years in the job, has an $18 million retirement cache, enough to provide him a $104,671 monthly retirement check if he converted his golden egg into an annuity at age 65. Combined with Social Security benefits, Hemsley could expect average monthly retirement income of $108,607….

In contrast to the Fix the Debt CEOs, home health aide Rhonda Straw will need to rely almost entirely on Social Security in her retirement years. …Despite the high level of responsibility in her job, she has not earned enough to put much away for her retirement. Her current wage is $9 per hour. (The median wage for the nearly one million people in her profession across the country is $9.91 per hour, or $20,610 per year, according to the Bureau of Labor Statistics)….Together with her Social Security benefits, her retirement income over 20 years is expected to average about $2,704 per month.