Odds on Social Security

This ended up in my email inbox this weekend, and I thought I'd share. It's one of those things that circulates on email from time to time, this time attibuted to Tavis Smiley.

"Have you heard anything about Social Security numbers, African Americans and the 5th digit of your SSN? Supposedly, if you are an African American or a minority, the 5th digit in your SSN is even and odd if you are white!

It has been said if you take a poll, most African Americans will have an even 5th digit. Rumor has it; some companies are looking at potential employees SSN to discriminate. Why not send this email to every African American and Minority that you know! I am sending this to everyone I know. Mine was even, what is yours?"

A quick check of our household proved this wrong. My fifth digit is odd, and the my spouse's is even. If the above were true, this would be the other way around. Besides, it's already been debunked as urban legend. My guess, and I may get some flack for saying this, is that this kind of urban legend is kept alive by the suspicion (somewhat justified) some African Americans have towards the U.S. government, because of things like the Tuskeegee experiment.

Can we talk about African Americans and Social Security for a minute? Back when president Bush was touting his plan to privatize Social Security (whatever happened to that anyway?) he said something interesting about African Americans and Social Security. Paul Krugman referenced it in one of his columns.

This week, in a closed meeting with African-Americans, Mr. Bush asserted that Social Security was a bad deal for their race, repeating his earlier claim that "African-American males die sooner than other males do, which means the system is inherently unfair to a certain group of people." In other words, blacks don't live long enough to collect their fair share of benefits.

Krugman's take was that Mr. Bush's argument was an old one and had already been discredited by none other than the deputy chief actuary of the Social Security Administration, who cited "major errors in the methodology" of the seven-year-old Heritage Foundation report from which Bush appears to have gotten his information.

Terry Neal also noted Bush's remark, the chilly reception his proposal received from African American audiences. He also quoted a column by Maya Rockeymoore, vice president of research and programs at the Congressional Black Caucus Foundation, suggesting that privitization has effects that reach far beyond retired African Americansk, and pointing out that it's far from just a retirement program.

Combined with the high risk associated with individual account investments, the outlook for African Americans, especially those on a low or fixed income, is dire.

The inheritance argument is similarly misleading. Currently, Social Security provides benefits for the surviving dependents of a worker who passes away in the prime of his or her working years. Because blacks have lower life expectancies, African American widow(er)s and young surviving children have a higher reliance on these benefits when compared to whites. Indeed, Social Security Administration figures show that 48 percent of African Americans receiving survivor benefits are children.

Nevermind that Bush failed to address the health care disparities that might affect life span among African Americans. That's another post, for another day.

The AFL-CIO has factsheets that further information on the subject.

Just looking at the retire- ment program, African American men do just as well, and probably better, than other groups. That's because African American men tend to earn lower wages on average and Social Security's progressive benefits provide higher returns for lower-income workers. And when you add in benefits for workers with disabilities and young survivors, African Americans clearly do better, on average.African Americans make up 13 percent of the working-age population, but they are 17 percent of Social Security's workers with disabilities. They make up 15 percent of the population younger than 18 but 22 percent of Social Security's surviving children beneficiaries.

Add to that the reality that some 70 percent of African American households getting Social Security have no other source of pension benefits, and that privitization could cut guaranteed benefits as much as $9,000 annually, and you get the idea that privitazation might cause a few more untimely deaths when some African Americans learn how much they're not going to be getting in benefits.

I don't know how many people received the same email that I got, but I hope that it prompts people to start thinking about Social Security again. Something tells me that, although things are quiet on that front now, sooner or later -- say in the next three years or so -- the administration is going to come back to this one.