A Facebook Fallacy

- jim Young

"There are three kinds of lies: lies, damned lies, and statistics." - Benjamin Disraeli

Almost everyone has an agenda. Whether their agenda is hidden or not will depend on the individual.

Don’t get me wrong. As a senior, I would welcome any increase to my retirement income that is offered. I just find misleading or misrepresented facts and outright lies to be very vulgar. Sadly, Facebook has become a cesspool for this type of behaviour, so whenever I see material posted on Facebook such as this, presented as “facts” I get very suspicious whether I am in agreement or opposed to its bottom line message.

Sometimes I am surprised to find there is more truth in the post than I might have thought; sometimes my suspicions are confirmed that it’s just a pack of lies; and sometimes, like this post, while it seems to be a little “exaggerated” at best, the worst part is it is incomplete and doesn’t tell the whole story.

Who Is This Post Directed At?

To begin with, Social Security payments are provided to retired workers age 65 or over in the U.S. 

“Social Security” in Canada, however, is a generic term used to describe a wide range of programs dealing with benefits not just for the retired, but Canadians of all ages in a wide variety of circumstances.

So to begin with, it’s important to recognize this post was probably created by an American for an American audience. Facebook is universal, so there’s no avoiding that and ultimately the responsibility lies with the viewer to pick up on that. It would be nice however, if the original poster recognized they were using a universal platform and made it a little more clear. 

So while there is nothing inherently wrong with that aspect of the post, when I see Canadians sharing a post such as this, I can’t help but think they either missed that point or are extending the criticism of the post to Canada as well. Does it hold up in Canada? We’ll get to that in a minute.

Is It Accurate?

But first, let’s look at the numbers to see if they are accurate. There’s not a lot to go on. “A high school kid flipping burgers” earning “$2,400 a month” at “$15.00 an hour”, (which is all the factual information provided), must be working 36.92 hours per week.1 (For the sake of readability I have included my calculations at the end for you to verify at your leisure.)

That seemed like an odd number to me but in fairness it could be due to rounding. Still it warrants further investigation so I chose McDonald’s in the U.S. as a model. 

According to the website Payscale, a MacDonald’s "Food Service Worker" or "Fast Food Worker" actually earns $8 - $13 per hour with the average being $10 per hour.

This brings the “high school kid’s” monthly income down to $1,716.87.2

Of course that doesn’t mean there aren’t any “high school kids” flipping burgers for $15 per hour. So while the information isn’t necessarily inaccurate, there is more information available that tells another story.

Is $1,716.87 more inline with what “the minimum Social Security payment” is in the U.S.? I don’t know but it’s at least closer than the claim suggested in the original post. Bear with me, as the actual question “Why aren’t the minimum Social Security Payments higher?” is answered when we look at the Canadian version of this post and may be relevant in the U.S. as well.

Does This Apply To Canadians?

Let’s now take a look at how this model applies in Canada.

According to the website Talent, the average McDonald's salary in Canada is $14 per hour. Based on a 37.5 hour work week, the average Canadian McDonald’s employee would be earning $2,275 per month.3

As you can see, we have moved away from “a high school kid flipping burgers' to using an average of ALL McDonald's employees, as the website Talent does not break down various positions. However, I think the comparison of the income of an average McDonald’s employee to the pension benefits of a retired Canadian is just as valid.

Translated To Canadian

The original post, adjusted for Canadians then, should read:

If a McDonald’s employee deserves $14 per hour ($2,275 per month) Then why isn’t that the minimum Old Age Security payment?

Here’s What’s Provided To Canadian Retirees

Canadians 65 and over are entitled to receive  Old Age Security (OAS) up to $666.83 and a maximum of $619.75 from the Canada Pension Plan (CPP) for a total of up to $1,286.58 per month. That gets us over half way there for starters.

Yes, this is based on the maximum amounts you can expect from these 2 sources of income as your overall income is used to calculate how much you are entitled to receive. The idea is, if you have no other sources of income, (more on that later)  these “maximum” benefits become your “minimum” income.

 

But Wait! There’s More

The federal government also offers the Guaranteed Income Supplement up to $995.99 per month (AND it’s non-taxable) although you won't be eligible for the full amount if you're receiving the maximum CPP benefits.

Other benefits available to seniors in Ontario:
The Ontario Trillium Benefit (OTB) is the combined payment of the Ontario energy and property tax credit, the Northern Ontario energy credit, and the Ontario sales tax credit.

The Ontario Guaranteed Annual Income Supplement (GAINS) is a guaranteed minimum income for Ontario seniors by providing monthly payments up to a maximum of $83 per month.

Because many of these “social security” benefits, as well as your other sources of income, may affect your eligibility for some of these benefits, it’s difficult to determine exactly how much the “minimum” amount any individual retired senior might be entitled to receive without a close examination of their personal financial situation.

Is That All?

However, it should also be remembered that government retirement programs are not intended to be your sole source of income upon retirement. The individual is expected to contribute to their own retirement savings while they are in the workforce. To that end, the government offers incentives such as the Registered Retirement Savings Plan (RRSP) as well as others.

CPP for example is only eligible to Canadians that have contributed, along with their employer, to the program while they were in the workforce and isn’t really a “benefit” as such. It’s money that you and your employer set aside for you to collect when you retire. Self employed people are expected to contribute on their own behalf as if they were an employee of themselves but they are not obligated to.

So Who’s Preventing An Increase?

Many Americans are so opposed to most “socialist” programs that they would deny themselves universal Health Care. “The United States is still the only country in the developed world without a system of universal healthcare.” And while not to the same extent, many Canadians as well are opposed to furthering “socialist” benefits here at home.

(Just in case this post is directed at the “government” as I suspect it may be.)

An Alternative

I think a better case to be made would be to get the federal government to eliminate MPs' outrageous pension plans as Premier Mike Harris did in Ontario to the MPPs back in 1995. Personally, I don’t object to the MPs being entitled to a “reasonable” pension, but why at the age of 55 and after only serving 2 terms? Shouldn’t MPPs, just like every other Canadian, be expected to provide at least a portion of their retirement fund from their own resources?

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Some of the figures used in this article were based on the following calculations.

1 Since months vary in the number of days and weeks, to properly calculate the number of hours worked I have used the following: $2,400 per month x 12 (months) = $28,800 per year / 52 (weeks in a year) = $553.85 per week / $15 per hour = 36.92 hours per week.

2 Based on the average $10 per hour x 36.92 hours = $396.20 per week x 52 weeks = $20,602.40 per year /12 = $1,716.87 per month. 

3 Annual Salary of $27,300 / 52 (weeks in the year) = $525 (per week) / $14 (per hour) = 37.5 hours per week. So the average Canadian McDonald's worker would be earning $27,300 per year / 12 = $2,275 per month based on a 37.5 hour work week.