Social Security as a Civil Right

For those who believe that race has nothing to do with Social Security, think again. It's time for policymakers to choose community over chaos, the authors say.

CHICAGO, IL - NOVEMBER 07: Demonstrators, including many senior citizens, protest against cuts to federal safety net programs, including Social Security, Medicare, and Medicaid on November 7, 2011 in Chicago, Illinois. About 40 of the demonstrators were arrested, cited, and released after they blocked a downtown intersection and refused police orders to move. (Photo by Scott Olson/Getty Images) (National Journal)

Fifty years ago, Martin Luther King Jr. argued that the isolation experienced by people of color living "on a lonely island of poverty" is unjust in a nation blessed with a "vast ocean of material prosperity." Fifty years later, the racial wealth gap is just as stark and immoral, with families of color possessing only a few pennies for every dollar of wealth owned by white families.

Maya Rockeymoore is president of Global Policy Solutions, a Washington policy consulting firm, and coeditor of Strengthening Community: Social  Insurance in a Diverse America. (Courtesy photo)The persistence of income and wealth inequality comes from years of disproportionately lower levels of earnings, employment, educational attainment, and ownership of family assets such as homes, stocks/bonds, savings accounts, and businesses. As a result, people of color have had significantly fewer opportunities to build assets over time and often lack the savings to ensure financial security throughout their lifetimes.

Meizhu Lui is director emeritus for the Insight Center for Community and Economic Development's Closing the Racial Wealth Gap initiative. (Courtesy photo)Today, some Americans still blame poverty on the people whom it victimizes. They are unaware or insensitive to the fact that until 1963 people of color were legally or practically excluded from a host of government-sponsored and tax-funded wealth-building opportunities, from giving away land through the Homestead Act to using public land for whites-only colleges to subsidizing loans so whites could buy homes and grow businesses. These assets were given away to not only help white families successfully build financial security over lifetimes but to generate inheritances over generations while investing in the prosperity of the nation.

Today, we have seen what little wealth that people of color have been able to accumulate pilfered by laws that enable discriminatory practices such as subprime and predatory lending, underfunded schools, opaque credit scoring, and loan denials for minority businesses and farms.

And the rolling back of gains from the civil-rights era is not over. Unfortunately, the next wealth-depletion strategy on the horizon is a coordinated assault on retirement security.

Despite lofty rhetoric touting the need for deficit reduction and claims of "saving Social Security for our children," the "entitlement reforms" put forward mainly by Republicans are a covert form of racial economic exclusion that will have the effect of shortchanging our children, who will be majority black and brown by 2019.

For those who believe that race has nothing to do with Social Security, think again. Although the program's benefit formula is race-neutral on its face, in reality, Social Security affects groups of people in different ways because of the interplay between program rules and demographic factors. For example, benefits are calculated based on years of work and amount of earnings, marital status, number of dependents, and state of health. But each racial and ethnic group has a different average work history, earnings pattern, health status, and life-expectancy profile due to the long shadow of racial inequality.

African-Americans, for example, are more likely than whites to have suffered unemployment, to be in lower-paying jobs, to be in physically demanding jobs, to have poor health, and to have shorter life expectancies.

As a result of these socioeconomic disparities, proposals for reforming Social Security can create winners and losers based on race, ethnicity, class, and gender. For example, raising the retirement age — a popular reform option among Republicans and some Democrats — disadvantages those with shorter life spans: a group that is blacker, browner, poorer, more male, and more blue-collar than those who live longer.

Similarly, the "chained CPI," which seeks to cut benefits by reducing the annual cost-of-living adjustment received by Social Security recipients, would have a negative effect on low wealth households, which are disproportionately black, brown, and female.

There is a fairer way to reform Social Security so that it is well financed for at least another 75 years and provides stronger benefits for those who are economically vulnerable. A better approach, advanced by the Commission to Modernize Social Security, recommends boosting benefits for the very old, widowed spouses, and the very poor; providing credits for workers taking time off to care for family members; and restoring benefits for college students with a working parent who has died, become disabled, or has retired.

The commission's plan pays for these improvements and extends the program's solvency by removing the cap on payroll taxes so that high wage earners contribute more, offering coverage to all newly hired state and local workers, and slowly increasing the payroll tax by a fraction of a percent per year over a 20-year period.

There are some who argue that people of color get a raw deal from Social Security. It is true that people of color were excluded from receiving Social Security benefits in its early years due to a provision in the law that left out agricultural and domestic workers. However, today the program has become an essential component of economic security for people of color with few other sources of wealth to support them or their dependents in the event of retirement, disability, or early death.

In 2008, Social Security lifted 33 percent of African-Americans, 30 percent of Latinos, and 19 percent of Asian-Americans out of poverty. In 2009, 47.2 percent of blacks and 52.8 percent of Latinos relied on Social Security for 90 percent or more of their income; for 39.5 percent of blacks and 44.2 percent of Latinos, it was their only source of income.

Although Social Security was not prominently mentioned by speakers during the 50th anniversary of the March on Washington for Jobs and Freedom, it is a fact that this program plays an important role in raising the standard of living for all, but especially for people of color. As such, we cannot talk about achieving racial justice or launching a new civil-rights movement without standing in defense of Social Security.

Americans of all racial, ethnic, political, geographic, and gender backgrounds want Social Security preserved and strengthened for the future. It's time for policymakers in Washington to choose community over chaos by ensuring that Social Security checks are paid in full.

The authors are cochairs of the Commission to Modernize Social Security.