A new AARP report,
Social Security’s Impact on the National Economy, shows how
critical Social Security is to Vermont’s economy and our nation’s economic prosperity.
While it is well-known that Social Security is an important source of income for millions
of Americans, this new report paints a clear picture of just how vital it is in supporting
Vermont’s economy, jobs, and workers’ incomes.
Every dollar of Social Security benefits paid impacts the economy in two ways:
people who receive Social Security spend their benefits, and
the companies, and their employees, that receive this spending in turn spend
their wages and profits.
The combination of these two creates what is called the multiplier effect – when one
person’s spending becomes a second person’s income, then the second person’s
income is spent and becomes a third person’s income, and so on.
The report details the powerful multiplier effect of Social Security: Every dollar of
Social Security received in Vermont generates $1.77 of total output for the state
economy – this means that the economy, businesses, and workers benefit from every
Social Security dollar that is paid out.
Taken together, spending by Social Security beneficiaries coupled with the added
spending by businesses and workers on goods and services generates $3 billion in
economic output for Vermont.
The report also reveals Social Security’s role in supporting Vermont’s workforce. The
$1.8 billion paid in benefits helped Vermont workers find or keep 21,000 jobs.
And Vermont’s workers receive $782 million in salary, wages and other compensation
thanks to the ripple effects of Social Security in state economies. These additional
earnings and business income, in turn, generate $166.1 million in local and state tax
revenue for Vermont.
Social Security’s Impact on Vermont’s Economy in 2012
Social Security Benefits Paid to Recipients — $1,831,000,000
Economic Output – Value of Goods and Services — $2,983,000,000
Jobs — 21,000
Employee Compensation — $781,979,000
Local and State Tax Revenues — $166,144,000
Social Security’s Impact on the National Economy
tells us that any adjustments
Washington makes to address Social Security’s long-term challenges will have a
profound effect on individuals, businesses and our economy as whole. That’s why
AARP is calling for a national conversation about the future of Social Security – so
those who paid into the system can have a voice in the debate about financial security
for all Americans. AARP is fighting to protect Social Security for seniors and
strengthen the program so future generations get the benefits they’ve earned.