Expanding Social Security is critical for millennials and small business owners — and especially for millennial small business owners. 

We are co-owners of a small business, We Act Radio in the Anacostia neighborhood of Washington, DC. As small business owners and managers, one of whom is a millennial, one a Gen-Xer, and with mainly millennials as employees, we strongly support the Social Security 2100 Act.

This important legislation expands Social Security and ensures that all benefits can be paid in full and on time into the 22nd century. House Democrats, led by Rep. John Larson (D-Conn.), the chairman of the Social Security Subcommittee, have united around the Social Security 2100 Act. The legislation has 210 co-sponsors – nearly 90 percent of House Democrats.

In addition to being the co-founder of We Act Radio, Alex is also the executive director of Social Security Works, which has nine full time employees – all of whom are millennials or Gen-Xers. So, we’re very familiar with how the Social Security 2100 Act is structured. It increases Social Security benefits for everyone, fixes the formula for yearly cost-of-living-adjustments so that it reflects the real expenses beneficiaries face, and raises Social Security’s minimum benefit to 125 percent of the poverty level. It also ensures that Social Security remains strong for current and future generations, into the 22nd century. 

Republicans, led by Rep. Kevin Brady (R-Texas), are attacking the bill in predictable fashion: Manipulating numbers in an attempt to foment generational warfare and undermine all of our economic security, falsely claiming that this wise legislation will hurt millennials and small business owners, like us.

As small business owners, we are worried about increasing costs — especially health care and rent. But we are not at all worried about the modest and gradual payroll contribution increase in the Social Security 2100 Act. We are much more worried about the costs we will face if we do nothing to address the looming retirement income crisis.

We want to ensure that our employees are economically secure, along with ourselves. Even large corporations rarely provide their employees with disability insurance themselves. Instead we provide that benefit, as well as life insurance, through our contributions to Social Security. But those benefits are inadequately low and need to be increased.

Moreover, the nation is facing a retirement income crisis. Even decades ago, when large corporations offered traditional pensions, small businesses did not have the resources to do the same. Now even the largest corporations have substituted 401(k) plans, which have proven totally inadequate for all but the wealthiest owners and employees. Consequently, Social Security retirement benefits will be even more important to millennials, Gen-Xers, and all the generations that follow.

All of this is funded in two ways. Firstly, the Social Security 2100 Act gradually phases out the cap on payroll contributions, so that the millionaires and billionaires pay into Social Security at the same rate as the rest of us. Secondly, the Social Security contribution rate for all workers and employers is very gradually increased from 6.2 percent to 7.4 percent. This increase is phased in over the course of 24 years and amounts to an annual increase of just 50 cents a week for a worker earning $50,000.

For a worker making the current Federal minimum wage, it’s considerably less — 14.5 cents a week. Of course, we’d never pay our workers that poorly. Nobody should work for starvation wages. If the bill recently passed by the House to raise the minimum wage to $15 an hour made it past Senate Majority Leader Mitch McConnell (R-Ky.) and Donald Trump, and became law, the worker now making the new minimum wage of $15 an hour would pay just an additional 30 cents a week per year. In 24 years, when the payroll tax increase is fully phased in, it will be an extra $7.25 per week.

The Social Security 2100 Act is a great deal for millennials. Stephen C. Goss, Chief Actuary of the Social Security Administration, broke down the numbers at a recent Ways and Means Committee Hearing on the bill. If the Social Security 2100 Act were enacted this year, someone turning 29 today would pay about $15,000 more towards Social Security over the course of their career (as would their employer). In return, if they retire at age 66, they’ll get over $80,000 more in retirement benefits than they would if this law was not enacted.

Of course, Social Security includes other critical protections for workers in addition to retirement benefits. If that 29-year-old became disabled or died leaving dependents, their Social Security disability benefits or their family’s Social Security survivors benefits would also be considerably higher than they would be without the Social Security 2100 Act.

Millennials should also bear in mind that the Social Security Administration projects that average wages will be more than 25 percent higher in 2035 than they are today. The modest payroll contribution increases in the Social Security 2100 Act will be negligible relative to wage gains, so long as we enact policies that ensure those wage gains are evenly distributed.

The Social Security 2100 Act is well designed for small business owners. As we mentioned, the payroll contribution increase is phased in extremely gradually over nearly a quarter century, giving businesses more than enough time to plan. We’re more than happy to contribute a little more to ensure our workers have adequate retirement, life, and disability insurance. In contrast, our businesses’ health care and rent costs are going up so astronomically that it’s entirely possible for them to triple the entire cost increase for the Social Security 2100 Act – in only one year! And, of course, we can deduct the employer side of the small additional payroll contribution, making it even easier for business to absorb.

Republicans don’t actually care about helping millennials or small businesses with retirement security – or anything else. In fact, the only Social Security bill the Republicans have put forward recently would drastically cut everyone’s benefits. The younger you are, the bigger the cuts would be.

Their supposed concern for young people and small business owners is a smoke screen to disguise their actual objective which hasn’t changed in 84 years, since the enactment of Social Security. That is to reach their hands into our pockets and steal our earned benefits, to dismantle the Social Security system and sell it off piece by piece. A recent Wall Street Journal op-ed, in which two Republicans (one of whom Donald Trump recently tried to nominate to the Federal Reserve Board) attempt to resurrect the zombie idea of privatizing Social Security, is extremely telling.

Republicans want to destroy Social Security so they can turn your money over to their billionaire friends on Wall Street. It’s no surprise then that the Social Security 2100 Act, which protects and expands Social Security while requiring the wealthy to pay the same rate as the rest of us, is anathema to them. They’re just lying about the real reason why.

Source: https://thehill.com/blogs/congress-blog/politics/455758-the-social-security-2100-act-is-critical-for-millennials-and