The proposal is 'well-intentioned, but misguided,' one expert says

Among the civilian labor force, 39.1% of workers hold physically demanding jobs, according to the Bureau of Labor Statistics.

A new bill calling for lowering Social Security's full retirement age from 67 to 60 for workers in physically demanding jobs could put additional strain on the trust fund that backs the program and create a two-tiered system for workers, retirement experts said.

The proposal, the "Blue Collar Social Security Fairness Act," introduced on Wednesday by U.S. Rep. Haley Stevens, a Michigan Democrat, would allow workers in physically demanding jobs to get their full retirement benefits at age 60. Full retirement age is currently 67 for people born in 1960 or later.

The earliest an individual can claim Social Security benefits is at age 62, but doing so results in a benefit that is permanently reduced by as much as 30%. To get their full retirement benefits, a worker must wait until age 67, and waiting until age 70 increases benefits by an additional 24%.

The bill aims to cover jobs such as construction, nursing and manufacturing. The Social Security Administration would create the list of qualifying jobs and update it every three years, according to the proposal.

"If we want to honor the dignity of work in this country, we need to lower the retirement age for physical laborers," Stevens said in a statement.

"Michiganders who work with their hands shouldn't have to work until their bodies give out to retire," she wrote on X. "If you put in the work, you deserve the retirement you earned."

The proposal comes as Americans are living longer, with the result that retirement can last decades. It also comes as Social Security itself faces insolvency in just six years, when benefits would be automatically cut by 22% unless Congress moves to strengthen the system, according to the Social Security trustees. Among the suggestions to shore up the program are raising taxes, requiring the wealthy to pay a larger share of their income into Social Security and raising the full retirement age.

By lowering the full retirement age, the bill moves in the opposite direction from the last changes to the program by Congress, which starting in the 1980s gradually raised the full retirement age from 65 to 67.

"The proposed act is misguided on a number of levels," said Lawrence Samuel, a cultural historian and the author of the a book titled "The Rise and Fall of Retirement in the United States: A Social History."

"First, further fragmenting our already divisive society along the lines of social class is not what this country needs at this time. Second, Americans should be trying to spend more years of their lives working rather than fewer, not only for financial reasons but for the psychological and social benefits that a job provides," Samuel said. "And finally, the phrase 'physically demanding' is vague at best. If you happen to be a New Yorker, have you ever tried to get to your office downtown on the 6 train at 8 a.m.?"

Under the proposal, workers would need to have a total of 20 years in physically demanding jobs throughout their careers or to accumulate 15 points over the years worked in such a job. From age 18 to 34, a worker would earn 0.5 points for each year in a qualifying job. From age 35 to 44, the worker would earn one point per year, while from age 45 to 54, they would earn 1.5 points per year. At age 55 and over, they would earn 2 points each year.

According to the Bureau of Labor Statistics, jobs are physically demanding when they require sustained exertion such as climbing, heavy lifting, standing or walking. A total of 39.1% of workers in the civilian labor force hold such jobs, the BLS said.

"Protecting blue-collar workers bypasses the high-stress, physically demanding pink- and light-blue-collar jobs," said Teresa Ghilarducci, a professor of economics and policy analysis at the New School in New York City and an expert on retirement. "There are better ways to help people whose bodies and brains can't keep up with the demands of their jobs."

Stevens did not respond to an interview request. It was unclear how the bill would be funded or whether it would advance in Congress.

"Allowing blue-collar workers to claim Social Security at age 60 would be one of many significant increases in benefits we could easily pay for if only the wealthiest Americans paid the same Social Security tax rate on their earnings that the other 94% of Americans do," said Martin O'Malley, who served as commissioner of Social Security under the Biden administration.

Others said the proposal would complicate Social Security and add to the strains on the program.

"This proposal is well-intentioned, but misguided," Nancy Altman, the president of Social Security Works, an advocacy group, told MarketWatch by email. "Social Security is a universal system. Adjusting the retirement age based on people's occupation would undermine the system's design, introduce unnecessary complexity, and drastically increase the cost of administering Social Security."

Workers may move into and out of physically demanding jobs throughout their career, and defining such jobs would be "complicated and inevitably controversial,' Altman said.

"The real problem is that the so-called penalty for claiming Social Security benefits early is too large. Congress should expand benefits, including making them more generous for people who claim at younger ages, and pay for it by requiring the wealthiest Americans to contribute their fair share," she said.

-Jessica Hall