Ron Johnson encourages seniors to rejoin the workforce, proposes payroll tax waiver

His idea, which he has detailed several times in the past few months, comes as public and private employers across the state struggle to fill open jobs while the state’s unemployment rate hovers around a record low. Wisconsin’s unemployment rate in July was 2.9%, near the state’s record low of 2.8%, which it hit in April.

“We could encourage seniors to get back in the workforce, those who are able to, by just saying, ‘We’re not going to charge you payroll tax,’” Johnson, 67, said at an event Wednesday in Neenah. “’You’re not paying it now. Come back into the workforce, and we’ll waive the payroll tax.’”

He repeated the suggestion at an online event Wednesday evening, explaining he heard the idea from Phil Gramm, a Republican who represented Texas in the U.S. House and Senate for over three decades until the early 2000s.

There is no current bill pending on the subject, and Johnson’s office didn’t make clear whether the Oshkosh Republican planned to introduce legislation to implement the idea.

Payroll taxes are funds employees pay to finance programs such as Social Security and Medicare. Johnson has said that working seniors shouldn’t pay taxes contributing to Social Security, although a spokesperson, Alexa Henning, did not directly explain why.

Discussing the plan in late July with conservative talk show radio host John Catsimandis, Johnson said under the plan, “We’d get more seniors off of the sidelines, those that are capable of working. Encourage them to work.”

Democrat reply

Lauren Chou, a spokesperson for Democratic U.S. Senate nominee and Lt. Gov. Mandela Barnes, said Johnson is “hanging seniors out to dry” with the proposal while helping wealthy donors by pioneering a tax provision in 2017 that mostly benefited the wealthiest Americans, including some who have given him millions of dollars.

In a statement, Henning said the senator is seeking “to reward seniors who want to go back to work. Especially since there is a severe labor shortage in Wisconsin and the labor force participation rate continues to languish.”

The number of people age 75 and older who work is expected to nearly double between 2020 and 2030, according to the Bureau of Labor Statistics. Almost 10% of the civilian workforce will be older than 65 by 2030, the bureau predicts.

“Not only is the share of older people in the labor force growing, but their labor force participation rates are rising,” the bureau states.

Additionally, 15 million Americans age 65 or older have incomes below 200% of the federal poverty line, according to the Kaiser Family Foundation. One-third of them live in poverty, the foundation states.

Another view

“I can see Sen. Johnson’s plan as having a small, positive benefit toward the goal of encouraging older adults to reenter the workforce,” said Cal Halvorsen, an assistant professor at the Boston College School of Social Work who’s also a faculty affiliate at the college’s Center on Aging and Work.

“Yet, I also worry about the effect on the federal budget overall and, in particular, the Social Security retirement program, which would lose money at a point when Congress still hasn’t fixed the projected budget shortfall in 2035.”

In 14 years studying work and retirement, Halvorsen said he hasn’t heard that paying payroll taxes is a deterrent for adults considering going back to work. That doesn’t mean it’s not a factor, he said.

But he’s heard more about Social Security earnings limits that occur before reaching full retirement age discouraging some older adults from returning to work. When Social Security beneficiaries under the full retirement age — 67, for those born after 1960 — earn more than $19,560 per year, their benefits are reduced by $1 for every $2 they earn above that limit.

A lack of job flexibility and age bias can work against older adults seeking to rejoin the labor force, Halvorsen said. He said using age-inclusive images and language could help bring seniors back to the workforce. He also praised back-to-work programs, such as the Wisconsin Senior Employment Program, an employment training program for older, low-income adults.

Key programs

Chou noted Johnson’s latest proposal came after his 2013 vote to raise the eligibility age for Social Security from 65 to 70. She also said Johnson wants to “put Social Security and Medicare on the chopping block,” though Johnson has repeatedly denied that he wants to eliminate the programs.

Rather than eliminate them, Johnson has said he wants to move the programs from mandatory spending programs to discretionary ones, meaning Congress would have to allocate funding for them each year.

Such an effort could lead to yearly battles over the programs — fights that some Republican officials say are necessary to cut down on government spending. Many Democratic politicians consider the programs to be some of the nation’s most beneficial and want them left alone.