Social Security Works for People of Color

http://www.cbpp.org/cms/?fa=view&id=885

* The Social Security program itself is race blind; the benefits it pays are a function of a worker’s earnings history and family situation.
* Studies show African Americans receive modestly more in Social Security benefits for each dollar they pay in payroll taxes than whites do.
* African Americans earn 73 percent as much as whites, on average, but because of Social Security’s progressive benefit structure, their average retirement benefit is about 85 percent as much as whites’.
* Social Security Administration study: Dean Leimer of the Social Security Administration reported that “the results generally support the findings of closely related previous research, confirming that… the ‘Other Races’ group fared better by these measures than the ‘White’ race group in most of the cohorts considered.” Leimer found that males of “other races” received a 0.4 percent higher annual rate of return, on average, than white males, and females of other races received a 0.7 percent higher average rate of return than white females.
* African Americans benefit disproportionately from Social Security’s disability and survivors benefits, since they are more likely than other workers to become disabled or die before retiring. This is reflected in Social Security statistics. African Americans constitute 11.5 percent of all workers who are covered by Social Security but 17.6 percent of Social Security disability beneficiaries. While 15 percent of all U.S. children are African American, 23 percent of the children receiving Social Security survivors benefits are.

http://www.cbpp.org/cms/index.cfm?fa=view&id=886

* Nearly five million African Americans receive Social Security benefits; roughly half of them are retired workers, and the other half are either dis­abled workers or the spouses or children of disabled, retired, or deceased workers.
* African Americans also benefit from the fact that Social Security benefits are based on a worker’s highest 35 years of earnings. (Earnings in other years are disregarded.) Because African Americans have double the unemployment rates of whites and experience longer average spells of unemployment, they have more years with no earnings than whites do, on average. By not counting some years of little or no earnings in calculating benefits, Social Security benefits African Americans.
* A major Treasury Department study of Social Security retirement and survivors benefits, based on nearly 40,000 actual earnings histories, found that African Americans’ average annual rate of return was half a percentage point higher than whites’.
* A Government Accountability Office study found that, on average, non-Hispanic blacks receive nearly 10 percent more in Social Security retirement, disability, and survivors benefits for every tax dollar contributed to the program than non-Hispanic whites do.

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