Social Security Utilized Differently by Minority Populations

Today’s San Francisco Chronicle reports that “Any changes to Social Security will significantly impact future generations, and the American population will be much different ethnically and racially than it is today. It’s crucial that policymakers consider how people of color use Social Security and how it can be modernized to meet the needs of our increasingly diverse society,” said Commission member Maya Rockeymoore, president and CEO of Global Policy Solutions. “People of color are more economically vulnerable and depend on Social Security benefits to meet basic needs when they or family members face death, disability, or old age.”

Plan for a New Future reveals stark differences in how Social Security is used by whites and people of color. While the vast majority of whites (74%) depend on Social Security for the program’s retirement benefits, almost half (45%) of all African-American beneficiaries and a majority (58%) of “other” racial and ethnic groups rely on its survivor and disability benefits. According to the report, the greater reliance on survivor and disability benefits reflects socioeconomic factors, such as lower educational attainment and higher rates of poverty, disability, sickness, and – for African Americans and Native Americans – death. These usage patterns reflect the effects of occupational segregation, with people of color more often working in physically challenging jobs that are more likely to lead to temporary or permanent disability, as well as early death.

“Two-thirds of Latino workers are employed by companies that do not offer any type of retirement savings plan. Thus, Latinos tend to depend more on Social Security as their sole source of income in old age,” said Commission member Leticia Miranda, associate director of economic and employment policy for the National Council of La Raza. “For many families Social Security is critical to staying out of poverty.”

For instance, the report argues that for Latinos and Asians, who have longer life expectancies than whites or other minority groups, the annual cost of living adjustment (COLA) is an especially important feature because it maintains the purchasing power of Social Security benefits for those who are very long-lived. On the other hand, Social Security’s early retirement feature is vital to shorter-lived African Americans and Native Americans since it allows them to retire at 62. See more here:>a>