African Americans Disproportionately Hurt
by Proposed Social Security Changes
The recent statement by Federal Reserve Board Chairman Alan Greenspan in defense of tax cuts while promoting scaling back social security benefits for future retirees sent shock waves throughout the nation and a tremor of earthquake proportions through the African American community. If adopted, this fiscal philosophy would take "reverse Robin Hood"-stealing from the poor to give to the rich-to the extreme.
In essence Chairman Greenspan is advocating a policy to continue giving thousands of millionaires tens of thousands of dollars of tax breaks they don't need while eliminating the safety net that so many hard-working, low and middle income Americans count on when they retire. This is the obvious consequence of his proposal, but it is the more latent consequences that have African Americans crying foul.
Without question, tens of thousands of African Americans would be devastated by any cuts in Social Security benefits. The Social Security Administration (SSA) reports that 40% of African Americans rely only on their Social Security benefits for their retirement income. Without Social Security, the SSA estimates that the poverty rate for African Americans would nearly triple from 24% to 65%.
African Americans already receive substantially smaller benefits than their white counterparts, because the sizes of Social Security checks are based on income levels prior to retirement. A recent report by "United for a Fair Economy" underscores the wealth gap between white and black Americans. According to "The State of the Dream 2004: Enduring Disparities in Black and White," African Americans earned 57 cents to every white Americans dollar in 2001. And the report gives a startling example of the difference in pay over a lifetime:
"A black high school graduate working full time from age 25 through age 64 will earn $300,000 less than white counterpart A black college graduate will earn $500,000 less on average A Black worker with an advanced degree will earn $600,000 less on average. Imagine the difference those missing hundreds of thousands of dollars would make for Black families in retirement."
In addition, African Americans have a shorter life expectancy than white Americans. Chairman Greenspan's proposal to raise the retirement age would require that Blacks work longer to receive less in benefits and have less time to enjoy their retirement if they should be so lucky. The average life expectancy of African Americans is currently 71.4 years. The retirement age for Social Security is already being raised from 65 to 67. Chairman Greenspan's proposal to increase the retirement age even further would mean a significant and disproportionate number of African Americans won't live to receive their Social Security benefits.
In an era of out-of-control deficits, all Americans should be called on to sacrifice equitably. However, the comments by Chairman Greenspan do not reflect the shared sacrifice that should be the hallmark of our times. Instead the wealthy are being promised lucrative tax cuts in perpetuity, while low-income Americans, especially African Americans, are being asked to further jeopardize and postpone their hard-earned retirement. Such a policy is unsound and irresponsible. Any attempt to implement these proposals will be met with resounding resistance.