Get a Big Raise, Live Longer

You need a raise. I know it. You know it. Your credit cards know it.

Indeed, everyone knows it but the folks who sign your paycheck. I mean, seriously, we are living in a country where the two most popular words are “Now Hiring.” Where the unemployment rate is unarguably low. Where thousands of jobs are unfilled because qualified candidates can’t be found.

But in spite of all that, the JulyEconomic Indicatorsfrom the president’s Council of Economic Advisors shows the wage gain for all private, non-agricultural workers has risen only 3.0 percent over the same time last year.

Better than a stick in the eye.

             Don’t get me wrong. That three percent is a pretty nice gain. It’s better than the proverbial stick in the eye.  It’s better than the 2.7 percent for all of 2017 and better than any of the years before that until 2008.  But it’s barely greater than the 2.9 percent increase in consumer prices in the same report.

And, by the way, the Social Security Trustees projected an increase in consumer prices for this year of 3 percent. They could be wrong. But the reality is that real wage gains for most workers are still virtually non-existent.

So allow me to make a suggestion. Tell your boss that you need a raise. A big one. Tell him that it’s a matter of life and death.

Your raise is a matter of life and death.

             Your boss may not take you seriously, but you’ll be telling the truth. A big raise for you and workers in the same income group could add years to your life. If he expresses doubt about your claim, suggest that he catch up on his actuarial reading. Specifically, he should read actuarial study number 124 from the Social Security Administration’s Office of the Chief Actuary.

Much of the work done in the Office of the Chief Actuary deals with how the costs of Social Security will be affected, one way or another, by changes regularly proposed by members of Congress. But this study is different.

Enticingly titled “Mortality by Career-Average Earnings Level,”this study isn’t destined to become common knowledge, like the bra size of all female Kardashians. It is in the realm of social-epidemiology because it examines the relationship between earnings and life expectancy.

And guess what?

The More You Earn, The Longer You Are Likely To Live

Let me say that again: The more you earn, the longer you are likely to live. (Please note the word “likely.” While higher earnings are associated with lower death rates and longer life expectancies, no amount of income will prevent death. Some people will die early, regardless of income. The hand we’re dealt in life has more cards than the one called income.)

To do the study, the actuaries divided workers into five income groups. Then they examined the death rates in each group for ages that ranged from age 62 to age 84. A male worker in the lowest 20 percent of workers in 2015, for instance, had career earnings AIME (Average indexed monthly earnings, a key measure in determining Social Security benefits) of less than $1,866. Those in the top 20 percent had career average AIMEs greater than $5,863 a month. The actuaries went through a similar process for women.

The results are striking. Low-income workers have higher death rates. High-income workers have lower death rates. The death rate for the lowest income men was doublethe death rate for the highest income men. Between the two income extremes, death rates fell in a neat march as income rose. The benefits of higher income for women were similar, but not as extreme.

It has been like this for a long time.

The relationship between income and mortality isn’t breaking news. It has been a topic of active study since Professor Michael Marmot did the first Whitehall Studyin the late 1960s and found essentially the same thing. The higher a worker in the bureaucracy of British government was on the totem pole, the longer his life expectancy.

Why is this important? Arguments about the distribution of income are tough enough. But last year it was reported that our life collective expectancy declined.

This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service.

(c) Scott Burns, 2018

Photo by Edward Castro from Pexels

On the web:

Mortality by Career Average Earnings Level https://www.ssa.gov/OACT/NOTES/pdf_studies/study124.pdf

Economic Indicators https://www.gpo.gov/fdsys/browse/collection.action?collectionCode=ECONI&browsePath=2018%2F04&isCollapsed=false&leafLevelBrowse=false&ycord=0

Average earnings https://www.gpo.gov/fdsys/pkg/ECONI-2018-07/pdf/ECONI-2018-07-Pg15.pdf

Consumer prices https://www.gpo.gov/fdsys/pkg/ECONI-2018-07/pdf/ECONI-2018-07-Pg24-1.pdf

Whitehall study https://en.wikipedia.org/wiki/Whitehall_Study

Mortality data for 2015 shows first life expectancy decline since 1993

https://www.cdc.gov/nchs/data/nvsr/nvsr66/nvsr66_06.pdfadd text here