Now every year there is a scare piece written about Social Security (SS). This year's best one even mentioned the evergreen nature of these types of pieces. One of my favorite financial writers, Brice Krasting, pays attention to SS numbers, and he did not like what he saw in mid-2014. While the first link is worried about the funding and cites how if certain numbers are hit, payments automatically drop 20% for all (SSDI), Krasting is worried about conflicting numbers. The CBO says the permanent tax fix is now a full 4% (awful) and SS Trust Funds deplete in 2030, while SS numbers are 2.8% for the tax fix and a run out of 2033. Keep these numbers in mind because no permanent and immediate tax increase is coming as it would suck money out of the rickety economy and the Trust Fund depletion date is now 2030, which is the moment all SS benefits drop simultaneously by law due to Trust Fund depletion. The scary part is what follows.
These estimates were from posts in 2014. This is pre-shale rig count collapse. All rigs employ men. All rigs contract with suppliers, transportation crews, machinists, etc. to work the rig. Those firms have vendors that supply them with equipment and services. An example you may have never considered is simple fire and safety consulting. Those guys train and can be contracted to fight fires on the rigs if need be, for a high price as it is dangerous. Mud logging is not a sex act but a recording of oil drilling data. It is a super safe job, it pays well and it employs men without college degrees. Shanking the oil price hurts marginal production, which hurts American shale production. This will hurt our employment numbers and the quality of employment in the American, Frankenstein economy. This will make SS numbers look much worse.
A lot of people have seen the above chart about how Texas is the reason for job growth in America since 2009. That is oil, and then the knock on effect of oil infusing the local economies. If you gave the chart a third line with North Dakota and made the US chart, US-ND/TX, it would look even worse and that is all oil. Zero Hedge has fun noticing how all other job growth is waiters, bartenders and hotel workers. Those are not high wage earners and they also have variable earnings that are not perfect payers into the SS system. Oil jobs pay well, and the SS taxes collected on those jobs, fill the coffers well. With many oil industry jobs reaching that 100K level, these men (and few women) are topping out SS tax payments into the system. You cut these jobs, and you have cut huge payers into the system when no other industry is hiring.
You think health care is going to fill the gap? Sorry, but many large health care systems have shed jobs and others have cut people back to under 30 hours per week to escape Obamacare. Three LPNs at 29 hours is like two at full 40 hours but no benefits! Large systems like Aultman Health spent the 2010 to present years spending money on capital equipment that they could then lay off employees, shedding payroll. They also have been buying clinics, laying off redundant staff while keeping critical skilled employees. This is happening all over America. Sorry to burst your bubble, but banking, education and government are all tapped, too. I work with a wide variety of sectors of our economy, and when I ask who is hiring, it is no one except the oil industry. There is no replacement for those great paying oil jobs.
A dip in the jobs numbers from a shale bust will accelerate the problems in SS. This is a major problem, because when the SSDI benefit cut date happens, the elite will have 8.8 million people angry. If the elite borrow from SS retirement funds to patch the disability program, then the 2030 number gets pulled closer. That is before revisions to the 2030 happen with the drop in shale jobs. Pull the 2030 number into the 2020s, and it becomes a decade out. No need to provide a link, but Boomers have not saved for retirement. If people who paid in for forty years don't get their payment, and it is all they have, "one country" isn't going to be enough to keep them peaceful. This is all before I even touch government expenditures on national debt interest if interest rates normalize in any little bit. The Happening could move up a bit closer. Dear USG, I hope trying to hurt Putin enough to secure prized possessions Ukraine and Syria is worth destroying the shale oil sector and whatever knock on effects it may have. Maybe we'll make it to the 250th America the Beautiful celebrations.