News Release

Social Security: Would Privatization Help Minorities?

WASHINGTON — A range of organizations today criticized rosy claims about Social Security privatization for Latinos and African Americans. At a presentation in Washington organized by the Center on Budget and Policy Priorities, the widely cited Heritage Foundation was faulted for “technical errors” and “gross inaccuracies” in its claims that racial minorities would fare better if Social Security were privatized.

Kilolo Kijakazi, a senior analyst at the Center, presented her findings in a report released today titled, “African Americans, Hispanic Americans, and Social Security: The Shortcomings of the Heritage Foundation Reports.” She noted that Heritage ignored Social Security disability and survivors’ benefits in their estimates. But she pointed out that “nearly half of all African Americans who receive Social Security benefits receive such benefits, while only about a quarter of white beneficiaries do.”

In fact, said Kijakazi, a study based on more sound methods than Heritage’s indicates that African Americans get a “higher rate of return than the general population from Social Security.” If Heritage’s proposals were followed, she said, “the real winners would be the financial companies that stand to gain enormous amounts.”

The executive director of the Center, Robert Greenstein, highlighted recent findings about Heritage’s claims by the Social Security Administration’s Office of the Chief Actuary — which concluded that Heritage “grossly underestimates the expected rates of return from Social Security benefits” for the overall population and especially for African Americans.

Julian Bond, chair of the NAACP, stressed that Social Security has been an important program in benefitting African Americans directly, without any local authority over them. “People of color must pay more attention to the growing push to privatize Social Security,” said Bond, who noted that some of the groups pushing for privatization have opposed civil rights legislation.

Raul Yzaguirre, president of the National Council of La Raza, stressed that any current surplus should be used to invest in people. He noted that while Latinos will make up nearly one of five workers in 2030 — when the last of the baby boomers will reach 65 — Latinos are among the least educated groups in the population, and thus will not be able to contribute as much to Social Security as they otherwise could.

For further information, contact:

KILOLO KIJAKAZI
Center on Budget and Policy Priorities
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RAUL YZAGUIRRE
National Council of La Raza
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For background information, contact the Institute for Public Accuracy: Sam Husseini, (202) 347-0020.