While many of us know that Social Security accounts for about half the income of typical seniors, many may not know the vital role it plays in our country’s economy.
Last year, Social Security’s $762 billion in benefits helped spark nearly $1.4 trillion in total spending by boosting sales at local retailers, small businesses, big corporations, and for goods and services as a whole.
Yet it doesn’t end there. After consumers spent their Social Security benefits, businesses spent it again, financing jobs and making purchases and investments. In other words, Social Security benefits have a tremendous “multiplier effect” through our nation’s economy, enriching all kinds of enterprises.
Last year, Social Security benefit payments supported more than $370 billion in salaries, wages and compensation for workers across the country. Of the more than nine million jobs supported by Social Security spending, about four million were in just ten industries including food services, real estate, health care and retail industries.
At a time of weak job creation, that’s an economic benefit worth applauding.
This data is part of a recently released report by AARP’s Public Policy Institute (PPI) called Social Security’s Impact on the National Economy.
This AARP PPI report also found some remarkable statistics at the state level as well.
In Arizona, Social Security fuels a vast amount of economic activity. For each dollar paid to Social Security beneficiaries two dollars in spending is generated by individuals and businesses in our state, adding over $29.8 billion in total economic output to Arizona’s economy.
Some of this revenue even pays for public services in the form of local and state taxes to the tune of over $1.6 billion.
When we consider the jobs picture in Arizona, Social Security helps younger people in ways that rarely get attention. For example, benefits paid by Social Security support more than 202,000 jobs in our state.
All of this remarkable state and national data proves that our country needs a serious conversation about the future of this vital program we call Social Security, not only for today’s retirees but for future generations of Americans.
It’s obvious, from this data that Social Security is becoming even more essential to a growing number of seniors who are struggling to make ends meet. These numbers also illustrate the importance of the decisions that Washington will make in how best to address Social Security’s finances in order to keep the program strong in the coming years.
The stakes are enormous for all of us, as cutbacks to the program could have negative consequences for everyone… individuals, businesses and the entire economy.
AARP urges our members of Congress to keep these new economic findings in mind when they engage in the crucial debate about Social Security. It’s time for a conversation because every American has skin in this game.
We urge people to read the AARP Public Policy Institute report: Social Security’s Impact on the National Economy .