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Social Security and Family System

February 22, 2009 1 comment

 When we analyze root cause of a problem, usually we probe the same system. For example, while solving organizational problem we study the organizational environment and systems. However, at times the root cause lies in another system or environment. Here is a case:

Problem:

US social security is in crisis. Starting 2017 huge number of employees will be retiring and government will not have enough funds to provide the retirement benefits.

Reason: Scholars in America argue that the payroll taxes are lower and the benefits paid are higher. This is taking the social security program in trouble.

Here is another perspective:

In US, 90% population receives some form of social security benefit. Hence there is very high dependence on government. As life expectancy increases this problem aggravates.

People will live longer but general health will deteriorate. This will place huge burden on government funds.

 While a prosperous and advanced nation like US suffers from this problem, how come India is shielded from this crisis?

 The answer lies in our Family System: In India only 7% population is covered under social security. Yet, the other 93% people have some arrangement to take care of them when they grow old.

 The joint family (siblings staying together with family) as well as the combined family (parents staying with children) system takes care of this.

Even in nuclear families, children usually support their parents staying in hometown. The family system provides for the ‘old age benefits’ without depending on government.

 The family system also shields people from impact of economic downturns. If a person looses his job, he can turn to his brother or parents. In rural India, you would see good diversification of income sources. One brother looks after farming and other works in some factory. In case of drought, employed brother supports both families. In case he looses job, both families earn through farming!

A cultural practice can be a source of strong economic system! What do you think?