This study investigated the effects that expected absenteeism and unemployment, based on BLS and Census data, would have on the income and thus retirement contributions made into the OAI Social Security Retirement plan, and also into a private account, by a low-income worker. Low-income-worker is defined as one earning half the average annual wages subject to FICA taxes, or $17, 449 in the year 2004. Low income workers are reported to have significantly higher absenteeism and unemployment rates than do high income workers. The conclusion is that absenteeism and unemployment have about equal impacts on Social Security Retirement benefits and on savings into a private account. Low income workers opting for a combination of a private account and a corresponding reduction in contribution to and benefits from, Social Security Retirement, end up slightly ahead of the worker who stayed totally with the Social Security retirement plan.
Faust, Ronald M.
"Unemployment and Absenteeism Pension Effects for Low Income Workers,"
Journal of the North American Management Society: Vol. 2:
2, Article 3.
Available at: https://thekeep.eiu.edu/jnams/vol2/iss2/3