Jobs Boost Social Security
Photo Credit: thefiscaltimes.com Social security is entirely funded through payroll taxes. As unemployment rose during the Obama administration, payments into social security decreased. But, as President Trump knows, a healthy economy leads to a stronger SS system.
Currently, retirement benefits are calculated using a formula called the Primary Insurance Amount, or PIA. The formula looks back at the last 35 years of employment and uses the amounts earned to calculate a recipients benefit payment.
Those nearing retirement age, who have been unable to find work, often see lower monthly payments because of this loss of income. In addition, fewer jobs means less people are paying into the system. So, in other words, high unemployment = reduced social security benefits and low unemployment = greater social security benefits.
In the past, Democrats have failed to adequately address the problems that have endangered the social security program. You simply cannot preserve a program funded by payroll taxes without acknowledging the influence of…
Lost Jobs and Low Wages
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As President Trump takes on the task of improving social security, focusing on creating more jobs and improving wages will be crucial. For example, by raising the tax cap, 12 million more Americans will be paying into the system. This change alone has the potential to eliminate any projected shortfalls in the program.
A booming job market also reduces dependence on social support programs. While these programs do not directly affect social security, they do create a greater tax burden. Higher taxes lead to unemployment– and the cycle relentlessly continues.
As the job outlook continues to improve, it will also mean bigger benefit increases in the future. Recipients have already seen a modest increase in their monthly benefit this year. That trend will likely continue under the Trump administration.
His work on ending illegal immigration will also have significant impacts on social security. Issuing fewer green cards will ensure there are more jobs and better wages for American workers. It will also reduce the $500 billion-dollar burden that threatens the solvency of the program.