- The Washington Times - Sunday, August 22, 2004

After 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 the legal barriers that prevented African-Americans from participating fully in U.S. political and economic life.

Now, 40 years later, we begin to see things differently. Indeed, we now realize 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 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 had its 69th anniversary Aug. 14, has done little to help African-Americans. It has probably had the opposite effect — helping keep poor people poor and helping close the door to higher education, the surest way out of the low-income ghetto.

To realize why it has this is so, 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, the 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. This means the average African-American working man who retires several years from now at age 66 will receive one or two Social Security checks and take them to his grave.

The picture isn’t any better for his children. The National Center for Health Statistics estimated recently that half of all 20-year-old African-American men who enter the work force will die before they receive three years of Social Security benefits. A disproportionate number of African-American men will die before they even reach retirement age. 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.

There is no Social Security account in your name. You have no ownership rights to the thousands of dollars taken from your pay during your work years. 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 middle to late 60s — to help finance your retirement. But there’s a catch: You have to live long enough to collect.

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 paid into the system over the years, with or without interest. So the money is lost — to them, their children and grandchildren and the community at large.

If the money had been set aside in private retirement accounts, the account owners 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 now find consistent support among African-Americans for changing the Social Security 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.

While many Democrats accuse those who favor personal accounts of wanting to destroy Social Security, the fact is, as David John of the respected Heritage Foundation has noted, some 39 countries have adopted pension reform with a private pension option — including Great Britain, Sweden, Australia, Mexico and Chile. And even Russia is seriously considering such a move to save its pension program.

For many African-Americans, Social Security is a stacked deck. They can only come out losers. It’s time to change that.

Alvin Williams is president and chief executive officer of Black America’s Political Action Committee (BAMPAC).

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