Anne Alstott Delivers BU Law’s Annual Distinguished Lecture
Tax law expert from Yale University discussed how growing inequality has undermined the Social Security retirement program.
Anne Alstott, Jacquin D. Bierman Professor in Taxation at Yale Law School, delivered Boston University School of Law’s Annual Distinguished Lecture on November 17. An expert in tax law and social policy, she spoke about her most recent book, A New Deal for Old Age: Toward a Progressive Retirement.
Alstott prefaced her talk by noting that she had written the book with an audience of progressive policymakers in mind. With the recent presidential election, she reflected on the roles of lawyers and legal scholars in such a transition. She stressed that they must use their skills to insist on truth, to demand justice, and to offer constructive solutions. Lawyers, she said, “have a duty to translate for others what is hidden behind legal jargon and complexity.”
Turning to retirement policy, Alstott argued that rising inequality is undermining the opportunities of vulnerable people in their working years and in retirement. Without reform, such inequality may swamp the capacity of Social Security to protect the disadvantaged. Much of the data on the financial position of retirees focuses on average income and blurs the “chasm of inequality” between rich and poor in old age, she said. “As we look toward the future, Social Security will be less and less able to bridge that divide.”
The issue is more than money. With improved health and longer life expectancies, the experience of retirement has evolved into what sociologists call the Third Age, or the period roughly from age 50 to 75 when retirees now have a wider range of choices in how to spend their work, family, and leisure time. However, low earners reach retirement with less financial security, and often have shorter life spans, higher rates of disability, and fewer job options, making their experience of the Third Age markedly different and far more vulnerable than those better off.
Established in 1935 as part of President Franklin Roosevelt’s New Deal, Social Security reflects the social and economic context of its time: Income distribution was compressed, family life was relatively homogeneous across social classes, and retirement behavior was predictable and covered a shorter period of time. Given the changes in modern social circumstances and retirement behavior, Alstott emphasized that Social Security now disproportionately punishes those who retire early, single parents, and those who have experienced job interruptions.
Society must grapple with the values at stake in retirement policy, she said. If the issue is framed as one of distributive justice, rather than solvency, the question becomes what share of our resources should we set aside to ensure decent lives for citizens no longer able to work? While many recommend raising the age of retirement across the board, low earners often experience more health problems that require them to retire early, leading to huge penalties for drawing from their funds before age 65.
To resolve such penalties on the disadvantaged, Alstott proposed the ability to work should determine a person’s access to benefits, rather than their chronological age. She recommended progressive retirement timing rules, in which every worker is offered the same menu of retirement options, with a preference for low earners baked into the payment rules, so the penalties for drawing benefits early are less for lower earners. “Updating Social Security for our age of inequality is a critical task. Fixing early retirement penalties would be a first step, but we can and should make the case for additional progressive reforms.”
The Annual Distinguished Lecture was established in 1986 to bring outstanding legal scholars to Boston University School of Law to present lectures on important legal topics. Revised versions of the lectures are published in the Boston University Law Review.