NCPA - National Center for Policy Analysis


April 19, 2005

An individual who owns his retirement security -- a concept central to the president's plan for reforming Social Security -- would enjoy many of the same benefits homeownership provides. And under the plan, even the lowest-income workers would have the opportunity to build equity.

Black Americans have the most to gain from the proposals, says Alphonso Jackson, secretary of the U.S. Department of Housing and Urban Development:

  • As it stands today, black seniors are disproportionately more dependent on Social Security, but they receive less benefit from the system.
  • While approximately 20 percent of white Americans depend entirely on Social Security for their retirement income, the figure doubles for blacks.

But blacks receive far less in return for their Social Security contributions:

  • One in three will get no benefit at all because he will die before he is eligible to collect benefits.
  • After a lifetime of paying into Social Security, nearly 30 percent of black seniors are left in poverty, compared to 7 percent of white seniors.
  • And while the average black male lives to age 67.8 -- after collecting less than one year of Social Security -- the average white male will collect seven years of benefits.

In effect, black workers are subsidizing the retirement of whites, says Jackson. The inevitable results of not reforming Social Security -- raising payroll taxes or reducing benefits -- would only worsen the situation for blacks.

Since the creation of Social Security 70 years ago, our nation has made great strides in closing the gaps of racial equality. But to remove the final obstacles to equality, black Americans need to start building the equity -- through ownership that their white counterparts have been accumulating for generations, says Jackson.

Source: Alphonso Jackson, "It Really is Black and White?" Wall Street Journal, April 19, 2005.

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