Millions of people 65
and over receiving benefits

14

HISTORY OF SOCIAL SECURITY

This conclusion is one that we, as a nation, have not fully faced. But it is one that millions of our older people have to face-day in, day out. Many are poorly housed, poorly fed. Many are forced to turn to their children or to public charity for the medical care they need. Many have been shoved into a dull, meaningless existence because the opportunities to remain active to use their skills and talents are not available.

The responsibility to help them rests on us as a nation, because many of them cannot solve their greatest problems alone and because their problems have not been of their own choosing but forced on them by a changing society.

It is a responsibility which, if not met now, will grow greater each day. The nearly 18 million older Americans will be 20 million by 1970 and over 32 million by the year 2000.

Assigning the responsibility is not easy. This is always true when a task-by its nature-must be shared. This task clearly must be widely shared. It must be shared by all levels of government, by private organizations, and by individuals. It is no more the sole responsibility of the Federal Government to deal with the problems of our older people than it is the sole responsibility of the communities where they live.

Only through a partnership can the Nation hope, in time, to solve the problems.

Some of them can best be dealt with through Federal legislation, and President Kennedy has already in his special message to the Congress made a series of proposals.

Others can be solved only by changes in individual attitudes and through more vigorous application of the laws and programs available.

What we need to keep constantly in mind is that the same society which has given Americans longer life has not developed enough ways for making the additional years useful and meaningful.

Somehow, through leadership and education, it must be recognized that a citizen's desire to live a purposeful life does not end with his retirement. It must also be made clear that skills and talents do not suddenly end with retirement.

We should seek out new means to use these talents, which all too often go unused. It is an incredible waste not to find some way to put this vast reservoir of ability into action.

None of what has been said before should obscure the substantial progress toward assuring greater dignity and security for the Nation's older citizens made in the past 15 years.

But-so much still has to be done.

As President Kennedy stated in his message to the Congress:

Our national record in providing for our aged is a proud and hopeful one. But it can and must improve. We can continue to move forward by building needed Federal programs, by developing means for comprehensive action in our communities, and by doing all we can, as a Nation and as individuals, to enable our senior citizens to achieve both a better standard of life and a more active, useful and meaningful role in a society that owes them much and can still learn much from them.

Ever Independent

To most older Americans, a high degree of independence is almost as valuable as life itself. It is their touchstone for self-respect and dignity. It is the measure they use to decide their importance to others. And, it is their source of strength for helping those around them.

Whether they enjoy the degree of independence they desire depends partly on the role they play in the community, partly on the condition of their health, and partly on the adequacy of their incomes, housing, medical care, and other essentials.

No order of importance can be given to these ingredients of independence. Their importance to older Americans will vary, not only from person to person but the chances are from time to time in their lives.

INCOME

What is an adequate income for a person or a couple, 65 or older? Is it a major portion-say 75 percent of the income that was available during the working years? Is it enough income to cover the "modest but adequate" budget developed by the Bureau of Labor Statistics? Is it an income related to the average income of the working population?

No matter what standard might be used to judge the adequacy of the incomes of today's older people, one point is clear: Their incomes are usually inadequate for even a modest level of living.

This is true even though some of their expenses may be lower than those of younger people and even though they may no longer have the various costs connected with work or the expense of educating their children. It is true even though they get tax relief not available to younger people and even though many of them own their homes free and clear and no longer have to pay rent or make mortgage payments.

Despite the obvious inadequacy of their incomes generally, today's older people have much more income than aged people had a dozen years ago. In 1950, there were 12.3 million Americans 65 and over with a total income of about $15 billion, while the 17 million 65 and over in 1961 had a total income of $35 billion.

Thus, while the number of older people increased about 40 percent in the past decade, their total income rose by more than 130 percent. This compares, for the same period, with an increase of 80 percent in the total personal income for the entire population of the country.

This is not entirely a plus, however. For one thing, the purchasing power of the dollar in 1961 was 20 percent less than in 1950. For another, more of the Nation's older people now live in urban areas where costs are high.

Then, too, a substantial part of this total goes to a relatively small group. Over 200,000 older Americans-1 out of 85-had incomes of $20,000 or more, and over 50,000 had incomes of $50,000 or more in 1961.

The overriding fact, however, is that far more older people today are dependent on sources other than current earnings for their liveli

*Nonearned income is income from all sources other than that from current work. Source: U.S. Bureau of the Census, "Current Population Reports: Consumer Income," Series P-60, No. 37.

Chart 3

Sources

hood. In 1950, about half of all income of older people was from earnings. In 1961 less than one-third of the total came from earnings. Thus, in 1950, for the 12.3 million older people earnings totaled $7.5 billion and income from other sources was $7.5 billion. By 1961, with an aged population of 17 million, earnings had increased to only about $10 billion, whereas income from other sources had shot up to about $25 billion.

Where did the additional $17.5 billion not directly derived from earnings come from, and what do these figures signify with respect to the general economic well-being of the older Americans?

Almost one-third of the $17.5 billion came from private pensions, income from savings and investments, life insurance, and other private

sources.

More than two-thirds-or some $12 billion-of the increased income from sources other than paychecks came from Government programs. And of this $12 billion almost $9 billion came solely from old-age, survivors, and disability insurance-what we call, and with good reason, social security. The remaining $3 billion from Government programs consisted principally of railroad retirement, Government employee retirement programs, veterans' payments, and public assistance.

Public assistance payments to older Americans, taken alone, went up only $400 million-from $1.5 billion to $1.9 billion. Interestingly, public assistance in 1950 was about half of all the money paid to the aged under Government programs, while in 1961 it represented only about one-eighth.

These figures show that older Americans, as a whole, have more income today than they did a dozen years ago.

And they are better off individually. In 1961, of the persons 65 and older who were not in institutions, 50 percent had less than $1,000 for the year, while in 1950, 74 percent had less than $1,000. Also, in 1961, about 14 percent had incomes of more than $3,000, compared with 7 percent in 1950.

This is encouraging progress. But, most of the aged are still living on considerably less than an adequate income.

This can best be seen by comparing the findings of two relatively recent Government studies dealing with incomes of older people and their budget requirements. Overall, the figures used would be a little higher if the studies were made today, but their relationship would be about the same.

MEDIAN MONEY INCOME IN 1960 OF
2-PERSON FAMILIES AND PERSONS LIVING ALONE

A Typical Elderly Couple

Source: U.S. Bureau of the Census, "Current Population Reports: Consumer Income,"
Series P-60, No. 37.

Chart 4

For the comparison, let us assume Jim and Dorothy Elder are a couple which the Bureau of the Census formally calls a two-person family headed by someone over 65. They are just an average couple living in Average City, a moderately large city, with a population representative of a cross section of all the citizens of the United States, including the people 65 and over.

Thus, the Elders have a yearly income of $2,530 or slightly more than $210 a month. Half the other older couples in the United States have an income of less than $2,530 a year, and half of them have more.

Compared to younger couples that is, two-person families with the breadwinner under 65-the Elders are not very well off. In fact, their yearly income is only slightly more than half that of the average younger couple living in Average City-even when allowance is made for the Federal tax breaks the Elders receive.