Prior to the introduction of Social Security in the U.S. and other programs for the needy, the elderly were the poorest age group in the U.S. Social Security (technicallyOld-Age, Survivors, and Disability Insurance or OASDI) is an income redistribution program that takes taxes from those working and distributes it to those who cannot work or who are elderly enough to be considered past the age at which they can retire.
Despite the success of the Social Security program in reducing poverty among the elderly, one unforeseen consequence has been the increasing poverty of people under 18. Conflict theory provides a clear theoretical argument to explain this: Since there are limited resources - in this case limited tax revenue - if those resources go to one group, they must necessarily come from another group. Thus, if the elderly see an increase in their total share of tax revenue, it is likely that some other age group will see a decrease in its total share of tax revenue. Thus, individuals under 18 have seen some programs cut that would have otherwise helped maintain their lower levels of poverty. Even so, poverty rates across all three age groups depicted in the figure above have declined from what they were prior to the introduction of tax redistribution policies like Social Security.
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