Economic turmoil challenges Mich. seniors, too

Keep your ear to the ground, and you can almost hear a revolution coming.

The New York Times outlines the very different economics of households at either end of the human lifespan in a piece headlined "Old vs. Young." Esquire magazine declares "The War Against Youth." The Washington Post flatly states "Young Americans Get the Shaft," with author Matt Miller informing young readers, "You’re in big trouble. You don’t even know it. You’re busy trying to get a degree, land a job, start a family, save for a home. You don’t follow the news. But trust me – you’ve been taken for a ride by your elders. The question isn’t whether such talk will stir up generational war. That’s already being waged – and you’re losing."

To be sure, while old age isn’t for sissies, it has its compensations.

In Michigan, being over 65, or 62, qualifies one for a number of free and discounted services, from legal assistance to help with minor home repairs. Some are funded through federal programs, some via the state. All are predicated on our culture’s long-held notion that the elderly are more likely to need special help getting by.

For most of the last century, being old has been synonymous with being poor. On fixed incomes, with health-care costs at their highest, only a lucky few elderly Americans could count on their retirement years as golden. And yet, in more recent years, something else entirely has happened: Older people have seen their fortunes rise, as other groups have suffered, particularly young children.

Where 35 percent of those 65 and older lived in poverty in 1969, that figure had fallen to 9 percent in 2010, according to Census Bureau figures. That’s the lowest of any demographic group, with children under 6 the most likely to be poor, at 25.8 percent. This shift is what many point to when they note this "new generation gap" between the old and young.

But what are the chances our social programs will shift as a result? Not very likely.

Tom Jankowski, for one, doesn’t believe the numbers tell the whole story. The associate director of the Institute of Gerontology at Wayne State uses a different index to determine poverty. He believes the poverty rate for older Americans is far higher -- 37 percent in Michigan.

The Elder Index, as it’s called, "benchmarks the actual costs of living for older adults, taking into account expenses for housing, food, transportation, health care and other necessities at a basic standard of living," wrote Jankowski in a white paper on the index released last year. And according to the Elder Index, the state contains significant elder poverty.

Jankowski divides the elder population roughly into thirds, with roughly one-third doing well, one-third living on Social Security alone, and one-third falling somewhere in the middle. But those who struggle are "skipping meals, skipping doctor visits, skipping medication," he said.

"One of the changes we've seen in the past 20 to 30 years is the disappearance of defined-benefit pensions," he said. "Most working-class people aren't able to save a whole lot for retirement," and those who have, have income pegged to the stock market." In other words, Jankowski says, don’t look to the elderly for relief.

Seniors are spenders, too

But, he adds, there’s always another side to consider.

"Seniors are a huge economic engine for Michigan," he said. "We tend to think of them as a drain, but they actually import a large amount of money into our local economy." Seniors with pensions, or 401(k)s they’re spending down, still inject an aggregate income of $37 billion in Michigan, Jankowski said, adding that health care, which seniors use heavily, is one market sector that’s still growing statewide.

But spending on health care isn’t like spending on restaurants and clothing; once it starts, it can grow like an avalanche. And so Jankowski and others argue that many of the dollars spent on the elderly from the public sector are designed to keep them from spending everything on health care. That is to say, older people are helped to "age in place" in their own homes, given support services to put off expensive nursing-home care as long as possible.

"You spend three times as much for a nursing home than you do to take care of them in a home setting," said Lisa Dedden-Cooper, manager of advocacy for the Michigan chapter of the American Association of Retired Persons. "Overall, in 2011, states that provide more of the long-term care services to elderly and disabled as opposed to nursing homes, save an average of $57,338 per participant per year."

Most nursing home spending is covered under federal programs. Medicaid (62 percent) or Medicare (19 percent) was the primary payer for most nursing home occupants in Michigan in 2010, according to statehealthfacts.org.

A better way to look at the elderly, Jankowski said, is as an untapped resource.

"We can't afford to have people spend 30 years in retirement, playing shuffleboard and watching TV," he said. "The most pervasive undiagnosed illness among older people is depression. They feel they lack meaning in life.

"We're reaching a point where we're going to have more people 65 and older than 18 and younger. Michigan in particular is aging more rapidly because of our economic problems. It's a mistake to think of older people in isolation, they're part of families."

He points to programs like Experience Corps in Baltimore, which enlists older people to work in local schools. The older workers offer at least 15 hours a week and get a small stipend. The experience benefits everyone, providing low-cost help for teachers and students, and giving the elderly a renewed sense of purpose.

"Older people who are committed are really committed," he said. "I think we need to do a better job of exploiting their talents."

Staff Writer Nancy Nall Derringer has been a writer, editor and teacher in Metro Detroit for seven years, and was a co-founder and editor of GrossePointeToday.com, an early experiment in hyperlocal journalism. Before that, she worked for 20 years in Fort Wayne, Indiana, where she won numerous state and national awards for her work as a columnist for The News-Sentinel.

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Comments

T.W.Donnelly
Thu, 07/26/2012 - 11:47am
The post- World War II "baby boomers" have been traced and followed since the late forties. Now that these people are reaching retirement,and the analysis continues. I am part of this group, turning 65 only a few days ago. My group reads newspapers. We vote in great numbers. We hold politicians accountable for their actions. We buy American. We devote our time to worthwhile causes that benefit the community at large. We spend cautiously. Sadly, some lawmakers paint an economic target on our limited resources , taxing our pensions which had been constitutionally not subject to income tax. The property tax rebate has been greatly reduced. In November, there will be a new status for these law-makers- UNEMPLOYED !
Joe
Thu, 07/26/2012 - 4:05pm
Most people can only dream of pensions. They should be taxed. It's only fair to the working families that pay your subsidizes like SSI and Medicare. SSI should be known as "Selfish Seniors Incorporated". You sellout your grandchildren by not paying taxes to cover the debt from your fear of everything, from Muslims to pot smokers. So we go to war and build prisons rather than schools. It's time to pay the piper.
Tom
Thu, 07/26/2012 - 5:29pm
Joe, your comments are so misguided and misinformed that I don't even know where to start. First of all, SSI and Social Security are not the same program. SSI is a federal income support program for the blind, disabled, and destitute elderly who do not qualify for Social Security, and pays meager benefits that fall well below the poverty level. Social Security is self-funded through payroll taxes, so every person who collects Social Security benefits has paid into the program for a minimum of ten years. The vast majority of retired older adults collect Social Security, not SSI, and all of them have earned their benefits by contributing to the program for their entire working lives. Social Security benefits may also be subject to income taxes, and all elder homeowners must pay property taxes on their homes, which helps support local schools. It is not clear where you got the notion that senior citizens fear Muslims or pot smokers more than anybody else, or are somehow disproportionately responsible for war. And seniors are the least likely of any age group to commit crimes, so blaming them for the proliferation of prisons in Michigan makes no sense either. Most older adults in Michigan spent their whole lives "paying the piper", they have earned our respect, and they deserve to live in dignity and not to be scapegoated in ignorant, anonymous rants on the Internet.
EK
Fri, 07/27/2012 - 10:55am
Tom, Well said. I'm always amazed how folks make up stuff, and then actually believe. Thank you for being clear, concise, and right on target.
Notadolt
Thu, 07/26/2012 - 7:09pm
It's simply not ethical to impose a high new tax on pensioners who have already retired and have no hope of increasing their fixed incomes. Shame on Republicans.
Glenn
Fri, 07/27/2012 - 11:47am
We can only hope that the lawmakers who voted to renege on a decades long promise not to tax pensions will be unemployed soon. Unfortunately this seems to have become a non-issue. Look at Snyder's approval rating. Part of that approval has to come from some of the very people who are being affected, but either they're clueless or hopeless. As for my wife and me, some of the discretionary spending we've cut to absorb the 4.35% cut in our retirement income is at the local reataurants, theaters and businesses that benefit from their tax cut. Recently we bought new blinds for our kitchen--on line from a company in Texas that offers free shipping and charges no sales tax, saving $12. Don't respond about unethically evading sales tax when the governor and legislature acted unethically in taxing pensions.
Gloria Woods
Fri, 07/27/2012 - 11:27am
Very thoughtful piece. I agree with Notadoit, it was an unethical act, imposing a tax on pensioners who had no way to plan for it or mitigate its effects--all while reducing taxes on business. This was clearly an ideological decision since, when asked, Governor Snyder could not cite any statistics or research showing this grew any state's economy that has adopted such a business tax policy. On another note, the piece mentions the high cost of nursing home care and the attention paid, through programs and policy, to help seniors "age in place". There will be an initiative on the ballot this November to help seniors find quality home care that is safe, affordable and more more accessible to the individual than it is today. It's called "Keep Home Care Safe". I am a senior and have worked as a volunteer for this project. Since there's lots of money being spent by special interests to defeat ballot initiatives, I hope your readers will pay attention to the facts and not the inevitable spin. There's a website if folks want to check it out: www.keephomecaresafe.org