African American Voters Strongly Support Individual Retirement Accounts

September 8, 1999

A recent poll of likely voters by Zogby International, commissioned by the Cato Institute, shows that over 60 percent of African American voters prefer to have the Social Security system changed to allow them to invest their Social Security taxes.

The ability to own and invest their retirement taxes is particularly significant to African Americans because they stand to lose the most under the current Social Security system and gain the most under a system of private accounts. Blacks lose under the current system because they have a shorter lifespan, therefore collecting fewer benefits than the longer-living white men or women. Essentially, Social Security subsidizes better off workers through the tax code by transferring money from working black men and women, who die earlier, too older white women, who live the longest.

African Americans gain under a system of private accounts because they own the money and it collects interest. Under the current system, an unmarried, low-income black male born after 1959 will get a negative rate of return on what he puts into Social Security. If he were able to invest that money in the most conservative investment going, treasury bills, he’d gain nearly $100,000 over what he put in. He could use it in any way he wished, including passing it on to his heirs. It wouldn’t disappear when he died.

Investment builds wealth, but about 95 percent of black families own no stock or pension funds. While many American households have loaded up on stocks and increased net worth, blacks have taken virtually no part in the recent doubling of stock prices.

A detailed report on the results of the Zogby poll will be released later this week, on September 9, at a news conference at 1:30 p.m. at the Rayburn House Office Building, B-318.

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