CEPR - Center for Economic and Policy Research

Multimedia

En Español

Em Português

Other Languages

Home Publications Blogs Beat the Press Really Big Numbers and Early Retirement in Germany

Really Big Numbers and Early Retirement in Germany

Print
Tuesday, 01 July 2014 04:31

The NYT had an article about a plan to allow some workers in Germany to retire early and collect full benefits from their version of Social Security. According to the article, workers who have paid into the system for 45 years will be able to start collecting full benefits at age 63 instead of the standard age of 65. (This is being raised to 67, as is the case in the United States.)

While the piece provides interesting background about the economic and political context for this decision, it gives no context for the numbers in the piece, which will therefore be meaningless to the overwhelming majority of NYT readers. For example, it tells readers that 6,000 workers have already applied for early benefits and that 200,000 are projected to be eligible. It is unlikely that many readers have a good sense of how large these numbers are relative to Germany's workforce. (According to the OECD, employment in Germany is roughly 40 million. This means that the 6,000 current applicants amount to 0.015 percent of total employment. If all 200,000 eligible workers took advantage of early retirement it would be equal to 0.5 percent of total employment.)

The piece later tells readers:

"The costs of the early retirement, estimated to grow over the next decade to €3 billion from about €1 billion, or to $4.1 billion from $1.4 billion."

It is unlikely that many readers have much sense of how important 1 billion euros is to Germany's budget today or how important 3 billion euros will be a decade from now. Germany's current budget is roughly 1.3 trillion euros, which means that the cost of early retirement is roughly 0.08 percent of current spending. The projected 3 billion euro cost would be roughly 0.18 percent of projected spending.

It should have been a simple matter for the paper to put these numbers in a context that would make them understandable to readers, instead of just putting in numbers that will be almost meaningless to everyone who reads them. The paper's Public Editor Margaret Sullivan made this point herself last fall and apparently got agreement from the NYT editors. Yet, for some reason practices seem not to have changed.

This is getting almost like the Twilight Zone. We have a journalistic practice that everyone agrees is wrong, that is easy to change, but nonetheless persists. What is going on here?

 

Note: this piece was corrected to say "full benefits." Thanks DC Analyst.

Comments (7)Add Comment
...
written by DC analyst, July 01, 2014 10:07
These are not the ages at which workers are "able to start collecting benefits." Rather they are the ages at which workers are able to collect "full benefits." The article explains that all workers are able to start collecting benefits at 63 (an age that will increase from 63 to 65 as the full benefit age increases from 65 to 67).

In the U.S. Social Security system, the analogous ages are the full retirement age (which is increasing from 65 to 67) and the early eligibility age, which is remaining at 62.
...........
written by djb, July 01, 2014 10:40
the implication of course, is that letting people retire will reduce the amount of goods and services available for purchase

that is i will create a supply problem

and the the supply problem will have to made up for extra work by those still working

in reality there is no supply problem in the world, there is a demand problem and allowing otherwise unemployed workers to replace those who are retiring will increase demand and improve the economy and increase the amount of goods and services produced

......
written by djb, July 01, 2014 11:01
but allowing people who have only worked 45 years to retire!!

what could they be thinking
Those silly old people!
written by ifthethunderdontgetya™³²®©, July 01, 2014 11:49
.
They should have started vulture funds and become rich jerb creators!
~
What's going on.
written by dick c, July 01, 2014 12:55
I think it's an economic calculation. Supplying a lot of numbers makes a paper appear informative, while at the same time keeping everything ambiguous allows readers to maintain their cherished fantasies. Making readers uncomfortable by making sure that they understand their beliefs are mistaken would cost a paper readership... which might also cost an editor their job. Supplying context might be a braver act than one might suspect.
Slackers!
written by BillB, July 01, 2014 1:30
Note that someone who retires with full benefits after 45 years at age 63 has been working without a break in work history since the age of 18. Some slacker!
Cultural decline, everywhere
written by Dave, July 02, 2014 12:38
Reporters are just people. Editors have limited time. The stuff that makes up most of what people read is just the common interpretation of common people as a result.

Newspapers should have higher standards, but they don't. Newspapers can only buck popular culture to a certain degree. This is just an indication that popular culture is a cesspool.

Write comment

(Only one link allowed per comment)

This content has been locked. You can no longer post any comments.

busy
 

CEPR.net
Support this blog, donate
Combined Federal Campaign #79613

About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

Archives