08 Dec 1998 Free Market Social Security Reform Would Benefit Minorities
African-Americans are being short-changed by the existing Social Security system. The African-American leadership network Project 21 says President Bill Clinton should use the White House symposium he has convened this week to ponder the future of Social Security as a forum to consider popular reform proposals that privatize the existing government program and allow more individual involvement in the investment of funds for retirement security.
Project 21 says Americans realize that hard-earned and well-deserved money is suddenly lost under the current Social Security system. This money is buried under the weight of the Social Security Administration’s bureaucracy, and has dismally failed and has abandoned its most consistent contributors: poor and minority communities.
Project 21 Director Roderick Conrad says, “The discouraging fact is that African-Americans have been sadly forsaken by the present Social Security system. A low-income, high-risk African-American male under the age of 38 is likely to pay more into Social Security than he will ever expect to see in benefits after adjusting for inflation and taxes.”
Project 21 noted that the average life expectancy of African-Americans is lower than for other races. The average life expectancy for African-American males is expected to be 64.8 years in the year 2000, down from 65.4 years in 1995. With the retirement age now at 65 and rising, few African-American males will see a substantial return, if any, from their years of forced contributions.
Also, considering that a large number of black males are now struggling in the low-wage income bracket, it is expected they are more likely to be dependent on Social Security when they retire than their comfortable higher-income counterparts. According to a Cato Institute study, the poorest 20% of past wage earners depend on Social Security for 81% of their retirement income, while the wealthiest 20% depend on it for 20% of their income during their retirement years.
Popular reform proposals that allow individuals to make their own decisions on how their retirement funds are invested and disbursed would be a welcome change from the current government-run system, says Project 21. In addition, linking retirement accounts to market forces would also provide people with the opportunity to earn more for their retirement years – a plan that has already worked with success in Chile.
Project 21 points out that the issue of the life expectancy of the African-American community must be addressed when it comes to Social Security, and that an investment-based system is a key way to overcome this injustice.
Contact Project 21 at (202) 507-6398.