By Leticia Miranda, Senior Policy Advisor, Economic Security Policy, NCLR
For 77 years, each generation has done its part to maintain our Social Security system--the foundation of our retirement security. In the past 30 years, Social Security has grown in importance as economic changes--such as the decline of labor unions and manufacturing jobs--have led to fewer companies offering retirement plans to workers, with American men being the hardest hit. Today, only a little over half of all workers have access to a private retirement plan at work, making our Social Security system more vital than ever. Latino workers rely even more heavily on Social Security, since only one-third have retirement benefits at work. Given the critical importance of our Social Security system to the vast majority of our nation's workers, why are some politicians proposing to cut it?
In Washington, many are arguing to dismantle our Social Security system and leave our savings to be managed by Wall Street. These voices include Representative Paul Ryan--recently chosen as a Vice Presidential nominee on the Republican ticket--and former Senator Alan Simpson and former White House staffer Erskine Bowles. They argue that we should slash middle class benefits, raise the retirement age, and cut cost-of-living protections that would hurt the lowest-income seniors--basically, they want to tear our system apart brick by brick. The biggest losers of these cuts will be the most vulnerable among us: people of color, people with disabilities, low-income workers, and women, not to mention our children and grandchildren.
Our Social Security system is vital because it is the safest, most efficient, and most reliable way for Americans to guarantee their retirement savings. If we can't count on Social Security in our retirement years, then what can we count on? Private retirement investments, like 401(k)s and IRAs, can be risky--even sophisticated investors can lose everything. Pension plans are disappearing, and home equity is no longer a stable bet. Social Security is the one retirement system that is reliable and that works.
Today, 55 million Americans receive Social Security benefits, including over 2 million Latino seniors as well as disabled Latino adults and children. Latino seniors are particularly vulnerable to cuts because Social Security benefits represent nearly all of their income. While Social Security's progressive benefit formula favors low-wage workers, average yearly benefits for Hispanic seniors are only $12,213 for men and just $9,536 for women. More than half of Latino seniors rely on Social Security for at least 90% of their income. To put it into perspective, with Social Security, about one in five Latino seniors is poor today; if our nation did not have Social Security, about half of all Latino seniors would be poor.
In 2011, NCLR held a series of town halls in Latino communities on the subject of Social Security. One sick elderly community member shared that he lives alone on $750 per month from Social Security, does not have enough left over each month to buy food, and must rely on food banks to survive. He said he does not like having to live this way but has no other choice. Yet, the plans by Simpson and Bowles or Rep. Ryan all propose cutting benefits in ways that would make it even harder for seniors living in poverty to survive.
A report by the Commission to Modernize Social Security, Plan for a New Future: The Impact of Social Security Reform on People of Color, lays out a plan for increasing revenue by requiring millionaires and billionaires to pay into the system at the same rate as everyone else. This option alone would eliminate most of Social Security's long-term revenue shortfall, making harmful benefit cuts unnecessary and enabling benefit increases for the most vulnerable among us.
Regardless of whether or not you support this specific plan, it is important to remember that the Social Security system is funded for the next two decades. Congress must ensure that all benefits can be paid in the decades to come, but this action doesn't have to be taken in the next year or two while we are still dealing with tough economic problems. And addressing Social Security should most definitely not be rolled in with deficit legislation, since the program does not add a penny to the national deficit.
At the end of the day, we need to do what is in the best interest of the vast majority of the American people. No one should have to work their entire life only to retire into poverty. Our Social Security system has never missed a payment to those who have depended on it for 77 years; and with careful resolve, we can ensure that our system will continue to be the foundation of retirement security for another 77 years and beyond.
(This was first posted to the NCLR Blog.)