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This is the third installment in our Social Security Works series. So far, we have seen how Social Security works for America, how Social Security works for women, and today we will show how Social Security works for people of color.

Social Security is neutral with respect to race and ethnicity; the benefits it pays are a function of a worker’s earnings history and family situation.

People of color face numerous structural inequities throughout their lives that Social Security, because of its progressive benefit structure, helps to alleviate.  

Communities of color receive higher average returns on what they have paid into the system than do other workers. Latinos and African Americans also rely on Social Security for a greater share of their income in retirement.

ssw3

Nearly five million African Americans receive Social Security benefits; roughly half of them are retired workers, and the other half are either dis­abled workers or the spouses or children of disabled, retired, or deceased workers
• African Americans earn 73 percent as much as whites, on average, but because of Social Security’s progressive benefit structure, their average retirement benefit is about 85 percent as much as whites’
Latinos also receive lower average wages than the rest of the population. Because of the progressive benefit formula, Latinos tend to receive more back from Social Security relative to the taxes they pay into the system than does the rest of the population

Soc Sec Works

• Social Security is a particularly important source of income for elderly Latinos. In the absence of Social Security, more than half of elderly Latinos would live in poverty
• As of 2002, Social Security lifted 673,000 elderly Latinos out of poverty  
• In 2003, Social Security reduced the poverty rate among Latinos aged 65 and over from 50 percent to 19.5 percent, a reduction of 31 percentage points
• In 2003, Social Security reduced the poverty rate among African Americans aged 65 and over from 56 percent to 23.7 percent, a reduction of 32 percentage points

Social Security also greatly benefits families of color:
• Some 800,000 African American Social Security beneficiaries are children under 18; almost 1 in every 19 African American children receives a monthly Social Security check.
African Americans benefit disproportionately from Social Security’s disability and survivors benefits, since they are more likely than other workers to become disabled or die before retiring.
• African Americans constitute 11.5 percent of all workers who are covered by Social Security but 17.6 percent of Social Security disability beneficiaries.
• While 15 percent of all U.S. children are African American, 23 percent of the children receiving Social Security survivors benefits are.
• African Americans benefit from the fact that Social Security benefits are based on a worker’s highest 35 years of earnings. (Earnings in other years are disregarded.) Because African Americans have double the unemployment rates of whites and experience longer average spells of unemployment, they have more years with no earnings than whites do, on average. By not counting some years of little or no earnings in calculating benefits, Social Security benefits African Americans.

Social Security works for people of color; Social Security works.

Also posted at America’s Future and The Seminal. This series is a project of Social Security Works.

Originally posted to www dcfightsback org on Tue Mar 02, 2010 at 01:37 PM PST.

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Comment Preferences

  •  This is why they want to privatize SS (3+ / 0-)
    Recommended by:
    Blogvirgin, bfitzinAR, tardis10

    Can't be helpin' those people of color now can we?

    •  Social Security doesn't just help blacks (2+ / 0-)
      Recommended by:
      Blogvirgin, bfitzinAR

      it helps most Americans.  It all averages out because black males do not live as long, but they get disabled earlier.  

      It would be a crime to raise the 62 early retirement age where you can retire earlier than the full retirement age of 67.

      No! We said Health Care not Wealth Care!

      by relentless on Tue Mar 02, 2010 at 02:09:07 PM PST

      [ Parent ]

    •  Racism runs hard and deep for the people (1+ / 0-)
      Recommended by:
      bfitzinAR

      that hate SS...they just can't stand helping "those people".  Scratch that surface and that is what it comes to.  Karma being a bitch I deeply hope that they come back as a person of color in the poorest nation on earth.

      "When fascism comes to America, it'll be wrapped in a flag and carrying a cross." Sinclair Lewis

      by lakehillsliberal on Tue Mar 02, 2010 at 02:13:42 PM PST

      [ Parent ]

  •  One other point (2+ / 0-)
    Recommended by:
    Blogvirgin, bfitzinAR

    I am not sure people of color have really fair benefits as they have lower life expectancy, and collect fewer retirement benefits.

    "let's talk about that"

    by VClib on Tue Mar 02, 2010 at 02:10:33 PM PST

    •  Any benefits is fair benefits - (1+ / 0-)
      Recommended by:
      ladybug53

      just like with us women - this is a life annuity, it pays out until you die.  This means you have a roof over your head and eat something besides catfood (which is the no-social-security alternative).  Both my grandmothers depended solely upon their social security - my parents and grandfathers didn't live long enough to collect it.  They didn't need it 'cause they reside in "peaceful acres" and don't eat.  My grandmothers did and I will (presupposing I live another 6-8 years) and the Rs and conservadems better keep their cotton-pickin' hands off it.

    •  But higher disability & survivor rates. (0+ / 0-)

      • African Americans benefit disproportionately from Social Security’s disability and survivors benefits, since they are more likely than other workers to become disabled or die before retiring.

      • African Americans constitute 11.5 percent of all workers who are covered by Social Security but 17.6 percent of Social Security disability beneficiaries.

      • While 15 percent of all U.S. children are African American, 23 percent of the children receiving Social Security survivors benefits are.

      Also, as diarist points out:

      • African Americans earn 73 percent as much as whites, on average, but because of Social Security’s progressive benefit structure, their average retirement benefit is about 85 percent as much as whites’

      "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

      by HeyMikey on Tue Mar 02, 2010 at 03:56:19 PM PST

      [ Parent ]

  •  BS. Social Security works for Blacks ! (1+ / 0-)
    Recommended by:
    ladybug53

    What a jaundiced interpretation of the facts! The reason one out of 19 AA children are receiving Social Security benefits is because in many parts of this country the only jobs available to their parents are jobs that kill. Would it not have been better for that child to have a living parent than to collect the measly check every month?

    In last weeks diary the diarist was very proud to show that 35.1% of AA women over age 65 who were on Social Security. What about the 64.9% of AA women over the age of 65 who do not qualify?

    The fact that 48.5% of AAs and 54.2% of Latinos receive more that 90% of their income from Social Security is not a good thing, it is an indication of the low wage jobs that they were able to secure during their work lives and the fact that they did not have monies to invest privately.

    While Social Security may prevent someone from starving to death living on $600- $1200 a month is not exactly living. I would be interested to see the average Social Security ck for AAs and Latinos as opposed to Whites.

    I'm asking you to believe. Not in my ability to bring about real change in Washington...I'm asking you to believe in yours. - Barack Obama

    by Blogvirgin on Tue Mar 02, 2010 at 03:30:53 PM PST

    •  Your gripe is not with Social Security. (1+ / 0-)
      Recommended by:
      ladybug53

      I completely agree that minorities don't have an equal chance to make a decent living in America. But the Social Security system doesn't cause that, and in fact helps to ameliorate its effects somewhat.

      You want to complain that the govt should be doing more to educate, train, and employ people -- low-skill, minority, everybody, whatever -- I'm with you. But that ain't Social Security.

      "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

      by HeyMikey on Tue Mar 02, 2010 at 03:59:58 PM PST

      [ Parent ]

      •  Are you aware that the Social Security laws (0+ / 0-)

        were initially written specifically to exclude jobs held by African Americans?  I didn't think so.

        Unless you are aware of the discriminatory nature of the laws from the inception of this agency you might reconsider your comment.

        Are you aware that the average AA retiree collects 6 years of Social Security while the average White collects 12 years?  Did you know that the Congress of the United States was well aware of the shorter lifespan of AAs in this country when they raised the age from 65 to 66?  This is normally referred to as institutionalized racism.

        I'm asking you to believe. Not in my ability to bring about real change in Washington...I'm asking you to believe in yours. - Barack Obama

        by Blogvirgin on Tue Mar 02, 2010 at 06:39:55 PM PST

        [ Parent ]

        •  Raising the retirement age is being pushed again (0+ / 0-)

          And the way they accomplish it is by selling that the program is in crisis.

          What I am fighting to do is to stop changes like raising the retirement age.

          What I know is that Social Security is critically important in keeping millions of people out of poverty and hardship.

          So yes there are problems with the program, mainly that the benefits need to be increased, but first we have to keep the Congress from cutting existing benefits (i.e. raising the retirement age)

          •  So what changes do you favor? (0+ / 0-)

            I am not one who thinks Social Security is in crisis. But it clearly needs some changes -- a little more $ in or a little less $ out, or some combination. Modest tweaks would do now, but the longer we wait, the larger the changes will need to be.

            I am 49. My full SSA retirement age is 67, not 65. I'm not happy about it, but that's math.

            What fix or fixes do you favor?

            "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

            by HeyMikey on Tue Mar 02, 2010 at 08:25:38 PM PST

            [ Parent ]

            •  Preferred fix (1+ / 0-)
              Recommended by:
              HeyMikey

              I think that Robert Ball and Nancy Altman's proposal is a good one.

              • Gradually increase the maximum amount of earnings covered by Social Security so that the traditional goal -- covering 90 percent of all earnings -- is once again achieved. This change would affect only the 6 percent of earners who make more than the maximum covered amount (now just under $100,000), and implementing the change gradually over the next 20 to 30 years would have only a minimal impact on them.

              • Allow Social Security to improve earnings by investing some of its assets -- up to 20 percent, say -- in equities, as just about all other public and private pension plans do.

              • Provide a new source of income by retaining a residual estate tax and dedicating it to Social Security. By 2010, the estate tax will affect only individuals with estates worth more than $3.5 million ($7 million for couples). Dedicating the income from the tax to Social Security would considerably improve the progressivity of Social Security financing as well as increasing revenue.

              http://www.washingtonpost.com/...

              you can see a more in depth explanation here (PDF)

        •  Meet Dr. Krugman: (0+ / 0-)

          Dr. Paul Krugman, Nobel winner:

          the claim that blacks get a bad deal from Social Security is false. And Mr. Bush's use of that false argument is doubly shameful, because he's exploiting the tragedy of high black mortality for political gain instead of treating it as a problem we should solve.

          Let's start with the facts. Mr. Bush's argument goes back at least seven years, to a report issued by the Heritage Foundation - a report so badly misleading that the deputy chief actuary (now the chief actuary) of the Social Security Administration wrote a memo pointing out "major errors in the methodology." That's actuary-speak for "damned lies."

          In fact, the actuary said, "careful research reflecting actual work histories for workers by race indicate that the nonwhite population actually enjoys the same or better expected rates of return from Social Security" as whites.

          Here's why. First, Mr. Bush's remarks on African-Americans perpetuate a crude misunderstanding about what life expectancy means. It's true that the current life expectancy for black males at birth is only 68.8 years - but that doesn't mean that a black man who has worked all his life can expect to die after collecting only a few years' worth of Social Security benefits. Blacks' low life expectancy is largely due to high death rates in childhood and young adulthood. African-American men who make it to age 65 can expect to live, and collect benefits, for an additional 14.6 years - not that far short of the 16.6-year figure for white men.

          Second, the formula determining Social Security benefits is progressive: it provides more benefits, as a percentage of earnings, to low-income workers than to high-income workers. Since African-Americans are paid much less, on average, than whites, this works to their advantage.

          Finally, Social Security isn't just a retirement program; it's also a disability insurance program. And blacks are much more likely than whites to receive disability benefits.

          Put it all together, and the deal African-Americans get from Social Security turns out, according to various calculations, to be either about the same as that for whites or somewhat better. Hispanics, by the way, clearly do better than either.

          So the claim that Social Security is unfair to blacks is just false.

          http://www.nytimes.com/...

          "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

          by HeyMikey on Tue Mar 02, 2010 at 08:22:56 PM PST

          [ Parent ]

      •  My gripe as you phrased it is with (0+ / 0-)

        the Congress of the United States, people who think codified discrimination is OK, and people who accept and praise or excuse that codified discrimination as being the fault of the victim.

        I'm asking you to believe. Not in my ability to bring about real change in Washington...I'm asking you to believe in yours. - Barack Obama

        by Blogvirgin on Tue Mar 02, 2010 at 06:43:59 PM PST

        [ Parent ]

    •  Not sure what your point is (1+ / 0-)
      Recommended by:
      ladybug53

      First thing, last diary pointed out that Social Security keeps 35.1 percent of African American women out of poverty.

      The point was, without Social Security, 61 percent of African American women over the age of 65 would be living in poverty.
      http://www.ourfuture.org/...

      And you are exactly right about people of color having lower wage jobs, higher rates of disabilities due to work, and higher rates of unemployment. Social Security doesn't fix all those structural injustices. But its progressive benefit structure helps alleviate the harm to people caused by those inequalities.

      My point is that everyone, especially people of color and women, would be much much much worse off without Social Security. Or with drastically lower benefits. Social Security keeps 32.3 percent of African Americans over age 65 out of poverty, that is an amazing figure. That is my point Social Security works.

  •  I wouldn't mind privatizing it (0+ / 0-)

    I manage my 401K myself and have done very well.

    I lost some money last year, but have already made back every thing I lost in 2008-2009 and more.

    I am someone who maxes out my SS payment each year (i.e., I make over $110K), if I was able to invest even part of that money, I'd make a lot more than the tiny amount I will receive in SS checks when I retire. And when I die, I could give the remaining cash to my children.

    As it is, if my kids are over 18 when I die, my kids get nothing for all the years I have paid the max amount into SS.

    I see my parents SS checks and it makes me sad that anyone would rely on that small amount of money to live on.

    It also makes me sad that so many are so afraid of any change that they will live their senior years in poverty when privatizing part of it could have dramatically improved their "golden years."

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