- Originally published in the Milwaukee Journal Sentinel (Wisconsin) on August 14, 2004
Copyright 2004 Journal Sentinel Inc.
BY: ALVIN WILLIAMS
After the passage of Civil Rights Act of 1964, the Voting Rights Act of
1965 and the Fair Housing Act of 1968, most Americans believed the
federal government had removed all of the legal barriers that prevented
African-Americans from participating fully in the political and
economic life of our country.
Now, 40 years later, we are starting to see things differently. Indeed,
we now realize that one of the greatest barriers to the full
integration of African-Americans into the economic mainstream of
America is a creation of government itself.
We're not talking about some pernicious Jim Crow law intended to hold
black people back. Rather, we're talking about one of the alleged
bedrocks of the U.S. social safety net: the Social Security system.
As strange as that may seem, the Social Security system, which observes
its 69th birthday today, has done little to help African-Americans. In
fact, it has probably had the opposite effect -- helping to keep poor
people poor and helping to close the door to higher education, the
surest way out of the low-income ghetto.
To realize why it has had this effect, you must understand how the
Social Security system works and acknowledge a few facts about
longevity among African-Americans.
The latter is easy to explain because it's simple: longevity is
comparatively rare in the African-American community. Indeed, according
to a recent U.S. Administration on Aging fact sheet, African American
life expectancy is just over 70 years, compared to an average of 76.5
for the population in general.
"The difference in life expectancy is even more striking among
African-American men, who have a life expectancy of only 66.1 years,
compared to the national average of 73.6 years for all men," the fact
sheet noted.
What this will mean to the average African-American working man who
retires several years from now at age 66 is that he'll receive one or
two Social Security checks and take them to his grave. So every dollar
they "contribute" to Social Security will go to somebody else.
That's because of the way the Social Security system is structured.
Unlike an individual retirement account (IRA) or 401(K) retirement
plan, when money is deducted from your paycheck for Social Security it
goes into the federal Treasury. What was yours yesterday is the
government's today.
All you have is a promise: In exchange for your Social Security taxes,
the government promises to provide you with a monthly stipend --
starting in your mid- to late 60s -- to help finance your retirement.
But there's an important catch: to collect this stipend, you have to live long enough.
Unfortunately, many African-American men don't. Some don't live long
enough to collect anything. Others don't live long enough to recover
what they've paid into the system over the years, with or without
interest. So the money is lost -- to them, to their children and
grandchildren and to the community at large.
If the money had been set aside in private retirement accounts, the
owners of those accounts could bequeath it to their children or
grandchildren, to help them start small businesses, pay off the
mortgage or pay college tuition. Similarly, some of the money could be
left to charity: to finance scholarships, for example.
But Social Security doesn't work that way. When you die, your Social Security benefits generally die with you.
That's why we are now finding consistent support among African-
Americans for changing the Social Security system to give people the
"option" to invest some of their Social Security taxes.
Updating Social Security by adding a private pension option would give
workers ownership of the money they pay into that part of the program,
promote long-term wealth accumulation and give low-income citizens the
same opportunity to help the next generation that has long existed
among the wealthy.
For many African-Americans, Social Security is a stacked deck. They can only come out losers. It's time to change that.
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Alvin Williams is president and CEO of Black America's Political Action
Committee in Washington. Distributed by Knight Ridder/Tribune
Information Services.