CHART 2. AGED WOMEN LIVING ALONE IN POVERTY SOURCE: Social Security Administration estimates TECHNICAL NOTE: The index of poverty developed by Using this index, 1.8 million aged women lived classified by the Bureau of Census as unrelated Data are not yet available to show the improve- THE FINDINGS: Widows and other aged women living CHART 3 AT PRESENT RATE, PRICE RISE WOULD 110.9 SOURCE BLS DATA THROUGH MARCH 69, In March 1969, the Consumer Price Index had already risen 6.2 percent from December 1967, when the last Social Security increase was enacted. If the index continues to rise at the rate in March (the highest jump in the last 18 years), it will be 15.8 percent higher than the December 1967 level by the time beneficiaries would receive the 7 percent benefit increase proposed by the Administration (in checks received in March 1970). If the increase is instead projected at the rate during the first 3 months of 1969, the March 1970 index will be 12.2 percent higher. And if the increase is projected at the rate during the year 1968 the March 1970 index will be 10.9 percent higher. The 7 percent increase was already wiped out in April of 1969 under the first projection and will be wiped out in May under the other two projections. We have another chart I would like you to see. This is the 7 percent chart. The administration has indicated that it will recommend a 7-percent increase in social security benefits. To interpret this chart, go to the lower left hand corner of the chart. The red line (solid line) there that intersects the lower left hand corner of the chart represents the time when the last increase was enacted, the little arrow there indicates the time period when the last increase was enacted. That was a 13-percent increase, as I recall, enacted back in 1967. The next little arrow indicates when the checks actually began to be received by the beneficiaries. Since then, the red line (upper center, far right) represents the increase in the cost of living, that is, the red line going upward, and the big black arrow in the middle of the chart represents that point where the proposed 7-percent increase would be wiped out by the rising cost of living. The projected red, green, and yellow lines (broken lines, left to right) represent three different estimates ranging from the most pessimistic to the most optimistic of further increases in the cost of living in the months ahead, through the middle of 1970. So, you can see that the proposed 7-percent increase will already fall short of the rising cost of living. As we look ahead, toward 1970, it would fall way short of just keeping retirement income on a par with rising living costs. That is the last of the charts. I certainly do hope that we will make a valuable record here, one that will advance the committee study of "The Economics of Aging." Our first witnesses are new to the Federal Government, but each has a longstanding interest in matters with which they now deal in Washington. It is a pleasure to call Mrs. Virginia Knauer, the President's Special Assistant on Consumer Affairs. She will be accompanied by John B. Martin, Jr., well known to you here in Michigan as your former State commissioner on aging, and now newly confirmed by the Senate in Washington as U.S. Commissioner on Aging. Before we receive the testimony from Mrs. Knauer and Mr. Martin, I do want to mention that we have received a very interesting statement and proposal that is pertinent to the hearings today from Senator Philip Hart, of Michigan. His full statement will be incorporated. in the record at this point. (The statement referred to follows:) PREPARED STATEMENT OF HON. PHILIP A. HART, A U.S. SENATOR FROM THE STATE OF MICHIGAN Anytime I approach a topic on "protecting the elderly" I am suspicious that the situation much resembles a toddler telling his mother, "Don't worry Mommy, if the bogey man comes while Daddy is away, he won't get you-I'll protect you." While I grant that my intentions are as honorable-and hopefully as touchingas the small boy's, I worry that perhaps my credentials are equally unimpressive. I fear that we who are younger are doing the elderly-and ourselves a disservice by our generally patronizing attitude to those who by age and experience are qualified to be teaching us. Times and attitudes have changed. True, many years ago it was typical for the grandmother to don her widow's weeds, pull up a chair by the kitchen pot-belly stove and sort of retire from activity at the death of her husband. In many cases she did this at a mere 50 years of age-and the children were expected to take over on major decisions affecting her well-being. But anyone who has watched the tour groups leaving any metropolitan airport in recent months-for Hawaii, San Francisco or around the world-knows that a good number of them are made up of those "little old widows." Ladiesand men-full of life, vitality, and a sense of adventure are conquering the world far up into their eighties or more. I raise this point not to say-or even to hint-that hearings and conferences such as this are unnecessary. The elderly-just like all consumers-do have problems. And some of them are special to being older than the rest of us. But I caution that we do not become so protective that we overlook the very valuable assistance the elderly can give themselves and other consumers. As a case in point, let's consider the general complaints consumers have today about the difficulty in obtaining auto insurance at reasonable rates. The elderly know this problem well. For years, they watched their rates shoot up the moment their insurance company noted the cross-over to the "elderly" age group. The parent committee of this subcommittee, under the very able direction of Senator Harrison Williams, was the first to compile information that proved that this one problem-at least-of the elderly was based much on traditional stereotypes of the infirmity that comes with the 60's-and not the facts. For example, a 1964 study by the Illinois Department of Public Works and Buildings, indicated that senior drivers have a lower accident involvement than other age groups. While 6.05 of the drivers studied were in the 64-74 age group, they were involved in only 3.95 of all accidents. As a result of the surfacing of this study-and others which backed it upa few auto insurers now are seeking out the older driver-not to surcharge him but to offer him rates representing the preferred risk he is. The ramifications of the discovery could end up with happy results for other consumers. If research, however belatedly done, destroyed such a long-held belief that older drivers had more accidents, certainly some of the patently illogical underwriting decisions of the companies are suspect. Thus, there is hope for shooting down surcharges against divorcees, ministers, doctors, oil drillers, people who keep unneat houses-and many other "verboten" insurance categories. Some of the studies proving that aged drivers are good-not bad-drivers were done by groups representing the elderly. As I say, merely one example of the grey-heads in our country being able to help all consumers once they put their minds to a job. As you may have gathered, the purpose of this statement is to ask for attention in the middle of your considerations to the way that consumer problems of the elderly are identical to those of all consumers as well as to the ways in which they differ. While the nuances of consumer problems of the elderly may be different, isn't it true that the major subject areas are all too common to all consumers? Consider the 10 topics for the work groups this afternoon-ranging from (A)— automobile insurance to (J)-suitability of design of living arrangements. It would take no stretch of the imagination to see other consumers-in their 20'sor in their 40's-caught up in the same tangles. There is little unique to the elderly in problems of advertising, product safety or credit buying. The chapter titles in the tale of woe may be different. But the book always has the same name. In your considerations today, I hope you will keep in mind that total picture, as well as the various segments of it. If you do, I think you will agree with me that the great need of elderly consumers and all consumers-is less for an identification of the problems they face and more for a method for dealing with them. Now comes, as you may have suspected, the sponsor's plug: About eight years of working in consumerism have convinced me that the movement-and the problems-have grown now to the magnitude to demand not just tinkering but a major overhaul of the system. We have responded to the symptoms many times. But it seems to me that the major diseases remain untreated. The major problems of all consumers as I see them are a lack of information, representation and recourse. INDEPENDENT CONSUMER CORPORATION These three lacks would be filled-to a great extent-by my proposed Independent Consumer Corporation. An independent, federally-chartered corporation with units in the local communities, it would: 1. Disseminate product information through new technology-perhaps a nationwide computerized vending machine setup. 2. Represent the consumer before government. 3. Mediate complaints about products between consumer and/or retailer or manufacturer. The last point may well prove to be its most important function. For not only could this mediation result in solving the individual complaints a consumer might have on one product, but general problems could be detected to be passed on as proposals for legislative action. My purpose in raising this proposal with this group is not, I admit, totally unselfish. For I hope that the elderly who are following and participating in these hearings will find the idea worthwhile and sign on to support it. Practicing what I was a few hundred words ago preaching, I solicit the help of the elderly. For I know I could benefit greatly from their advice, solicitude and energy. It is help that is needed-and would be greatly appreciated. STATEMENT OF HON. VIRGINIA H. KNAUER, SPECIAL ASSISTANT TO THE PRESIDENT FOR CONSUMER AFFAIRS; AND HON. JOHN B. MARTIN, COMMISSIONER, ADMINISTRATION ON AGING, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE Senator CHURCH. I am happy to welcome you both to the committee hearing this afternoon. Mrs. Knauer, if you will be our leadoff witness, proceed with your statement and then we will hear from Commissioner Martin. STATEMENT OF MRS. KNAUER Mrs. KNAUER. Thank you, Mr. Chairman. I am pleased that one of my first occasions to testify before a congressional committee is before this subcommittee, concerned as it is with problems which will have high priority in my office-the consumer problems of the elderly. As I stated on the day my appointment as Special Assistant to the President was announced, I believe very strongly that older citizens comprise one of the groups in our society whose consumer problems deserve special attention. Unquestionably, consumer needs change with the various stages of retirement. In the earlier years, the retiree is generally well and active. Except for his problem of adjusting to a lesser income than he had when working-an income which may be inadequate his consumer problems are generally not unlike those of the population in general. In his later retirement years, his needs usually center more on such problems as medical care; services he is no longer able to perform for himself; and products designed for use by persons living alone who are perhaps less agile or have some physical handicap. |