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When I was a teenager, my mother showed me a statement she had received by mail from the Social Security Administration. It included an annual history of her income, showing a large number of zeros over the years she was in her late twenties and early thirties. "That's you and your sister," she explained, laughing.
My mother is doing fine nowadays, but anyone who spends years as a parent staying at home – or an unpaid caregiver of any kind – receives a financial fine when it's time to retire. Our social security system does not recognize parenthood as the socially and economically valuable task it is.
That is also not the only inequality of the system. It also punishes teachers, police officers, firefighters and other government officials. Their social security benefits are reduced if their pension is large enough, unlike private sector employees, who can retain their full social security benefits regardless of the size of their private pension.
Elizabeth Warren has become famous for her plans, and her last, this morning, are meant to address this dishonesty. It would allow public sector employees to maintain their full social security benefits and increase benefits for people who spend at least 80 hours a month as unpaid caregivers for young children, the elderly or the disabled.
However, most of the plan is a general increase in monthly social security payments. Each current and future beneficiary will receive at least $ 200 more per month than under the current plan, and many low-income employees will receive at least $ 600 more.
"A generation of stagnating wages and rising costs for basics such as housing, health care, education and childcare have depressed family budgets," Warren writes in a Medium report. “Millions of families have had to save for retirement, just to make ends meet. At the same time, fewer people have access to the type of pensions used to help finance a comfortable pension. -thirds.
She would pay for the plan by raising wage tax on income above $ 250,000, which is now being protected against it. As income inequality has increased in recent decades, Warren notes, the amount of the total income of the country subject to payroll tax, which finances social security, has fallen. She would reverse that decline.
I have recently criticized Warren and other Democrats for supporting a number of policies that I believe are wrong and unpopular (such as forcing everyone to register for Medicare). The social security plan is different. I want to read what others have to say about it in the coming days, especially about the magnitude of the increase, but my first opinion is that this proposal is the opposite of mandatory Medicare – smart and politically popular.
Admittedly, the economy has been kinder to older Americans than younger Americans in recent years (as Warren knows). All in all, I would like to see federal spending more focused on children and younger employees. But it is also true that our economy of high inequality has not been easy for most people over 65. Many deserve help.
And I'm sure people over 65 tend to vote at very high rates.
Related: "Americans are pessimistic about the financial health of older Americans," wrote Kim Parker, Rich Morin and Juliana Menasce Horowitz of the Pew Research Center recently. "Most say that, in 30 years, 65-year-olds and older are less prepared for retirement than their counterparts today."
My colleague Paul Krugman has written over the years about both long-term finances and the social security policy. "America's general pension system is in big trouble," Paul wrote in 2013. "There is only one part of that system that works well: social security. And this suggests that we should make that program stronger, not weaker."
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