Social Security a Burden on African-Americans

November 18, 1999

In the November 5 Washington Times, Robert Woodson Sr. of the National Center for Neighborhood Enterprise wrote of the extra burdens Social Security places on African-American workers and their families:

"What would the public reaction be if I proposed a plan to collect monthly contributions from working black men and women, then transferred a good portion of that money to older white women? Or what would happen if I tried to sell a retirement investment plan to 24-year-old black American males that would end up paying each of them $13,400 less in benefits than they paid into my plan? Most likely, if I were successful in conning people into these schemes, I would be arrested, tried and convicted of fraud. The troubling reality is that these are precisely the effects that today's Social Security system has on working class blacks."

African-Americans drop out of school at higher rates than do other Americans, so on average they begin working earlier and pay payroll taxes longer. In addition, African-Americans marry at lower rates, so they cannot take full advantage of Social Security's spousal and survivors benefits. Finally, African-Americans have lower life expectancies, so large numbers of them never live to collect a cent from Social Security. Woodsen cites a Rand Corporation study that outlined the result: an average transfer of over $10,000 from each black worker to whites through Social Security.

African-Americans, like all Americans, deserve a choice. They should have the option to continue in the current system, which gives them low rates of return, no property right in their savings and nothing to pass on to their heirs. Or, they can move to a new system, in which workers deposit their payroll taxes in their own personal account, where it builds wealth under their own ownership, and which is theirs to pass on their heirs. Is a choice too much to ask?

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