Is it wrong that everyone pays in the same amount when whites live longer than blacks? Is this fair?
If you mean “racist” as “designed to be racially discriminatory”, of course not. If you mean “is there a difference in impact along racial lines?”, possibly.
But if you’re going to investigate that, you have to take into account a whole lot of other factors, not just life expectancy. For example, SS benefits are somewhat redistributive—the ratio of benefits to contributions is generally somewhat higher for people in lower income brackets—and blacks are, on average, in lower income brackets than whites. Would that make up for their longevity disadvantage?
You’d need to do a whole major statistical analysis of these and dozens of other issues to determine what, if any, racial differences really exist in SS outcomes. I seriously doubt that your results would show a significant net disadvantage to black workers from Social Security.
By the same line of thought, it is also sexist, as women have a higher life expectancy than men.
An article I read a few years ago put forth the following.
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Because of a lower life expectancy, about half of all black men will never collect a SS check. On average, a black man will collect $13,400 less in benefits than paid into the plan.
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Because money put into the plan is appropriated into a general fund (instead of a private investment a person can call his own, and can will to family members), basically the system is a conduit from the pockets of working class blacks to older white women (who tend to have the longest life expectancy).
According to the study quoted in the article (conducted by the Rand Corporation), the income transfer from blacks to whites can be as high as $10,000 per person.
The article’s conclusion was that the inception of the SS system was based in part on racist, paternalistic attitudes. The author contends that the 1937-38 Social Security Advisory Council engaged in stereotypical and elitist discussions as to why blacks, women, and farmers should not be entrusted with the responsibility of making their own retirement investments.
I don;t know how sound the numbers are or that I agree with the article’s conclusion, but I thought I’d add it to the discussion.
dm: 1) Because of a lower life expectancy, about half of all black men will never collect a SS check. On average, a black man will collect $13,400 less in benefits than paid into the plan.
That sounds odd to me: according to CDC tables for life expectancy, the life expectancy at birth for a white male (as of 2001) is 75.0 years, whereas for a black male it’s 68.6 years. However, life expectancy at age 65 for a white male is 16.5 years (for an age at death of 81.5 years) and for a black male 14.4 years (age at death 79.4 years).
So the average black male’s life expectancy is considerably shorter than the white male’s at birth. But if they both live to retirement age, the number of years they can expect to spend in retirement is almost the same. And apparently, much of the difference between black and white males in the average life expectancy at birth numbers is due to the higher murder rate among black males.
So I’d bet that among the part of the populace that lives long enough and works steadily enough to make significant contributions to SS via payroll taxes, the life expectancy differential between blacks and whites isn’t anywhere near as great as the article’s claim suggested.
dm: 2) Because money put into the plan is appropriated into a general fund (instead of a private investment a person can call his own, and can will to family members), basically the system is a conduit from the pockets of working class blacks to older white women (who tend to have the longest life expectancy).
Oh really? The Social-Security-privatization crowd also argue exactly the opposite, i.e. that Social Security is “unfair” because it’s somewhat income-redistributive (as I said above):
Working-class blacks tend to be low earners. So I don’t see how they can be simultaneously unfairly gaining from the system and unfairly losing by it.
dm: The article’s conclusion was that the inception of the SS system was based in part on racist, paternalistic attitudes. The author contends that the 1937-38 Social Security Advisory Council engaged in stereotypical and elitist discussions as to why blacks, women, and farmers should not be entrusted with the responsibility of making their own retirement investments.
Uh-huh. It may be so, but I’d like to see some cites. On the face of it, the claims in this article look like more smoke-and-mirrors from the advocates of Social Security privatization—many of whom would stand to gain a hell of a lot financially from privatization schemes, so they’re hardly disinterested.
Do all people have the same amount deducted from their checks or is it based on earnings? If it is based on earnings, it should be noted that black males generally would contribute less than white males but more than white females. Black females would contribute still less. I think that Hispanics earn still less than that. (This is based on average salaries.)
I really doubt that it was intended to be racist or sexist either one. The ability to manage money doesn’t seem to distinguish between race, sex or class. Did anyone ever really think it did?