The following article by Valerie Rhea originally appeared on Quora. Valerie is a thirty-something PhD economist, former military pilot, with a law degree.
Would More Jobs Help Social Security?
Yes, higher employment (and higher wages, by the way) results in more inflows to the Social Security system. In 2024, the SSA spent about $60 billion more than it took in via payroll taxes. If US payrolls increased by about $500 billion – that’s about 1.75% of GDP – then instead of operating at a deficit, Social Security would have approximately broken even.
To realize $500 billion in increased payrolls, roughly 6 million average-paying jobs would need to be added. If we forget about population growth for a moment, that means expanding the US workforce participation rate by about 4% would do the trick. That would take us to a workforce participation rate of about 66%—levels last seen during the Bush administration.
Unfortunately, keeping Social Security solvent becomes increasingly difficult to keep up with because of the country’s demographics. Right now, an estimated 2.4 workers pay into Social Security for every person receiving benefits, down from about five workers per beneficiary in 1960. By 2050, the ratio is expected to fall below two workers per beneficiary. Further, during any period of inflation, COLA adjustments and so on force the cost of benefits to grow rapidly. Although every little bit helps, America just isn’t likely to grow our workforce fast enough to keep up with longer lifespans.