Social Security change may hinder Hispanics
WASHINGTON, D.C. – Hispanics receiving Social Security benefits would be hurt by President Bush’s Social Security privatization plan, according to reports released this week by a think tank that focuses on how federal policy affects low-income families.The studies by the Center on Budget and Policy Priorities explained that Hispanics get more in Social Security benefits for each dollar they pay than non-Hispanic whites or blacks because they are often among those who disproportionately benefit from the program based on income, lifespan, disability rates and number of children.Bush’s plan would reduce benefits for all workers but put a burden especially on the 1.2 million elderly Hispanics who receive Social Security benefits, the reports found. For the majority of these beneficiaries, the payments constitute more than half of their income.
“Privatization has all types of negative consequences for a program Latinos rely on for their basic safety net,” said Fernando Torres-Gil, director of the UCLA Center for Policy Research on the Aging and co-author of the study.In addition, Bush’s plan isn’t well understood by many Hispanics, said Carmen Carrillo, executive director of Denver-based Mi Casa Resource Center for Women, a nonprofit organization that seeks to help low-income Latinas and youth. She said political jargon and little translation prevent many Hispanics from even understanding the implications of the president’s Social Security plan.”There has been a failure to communicate in simple language how it will affect us,” Carrillo said. “There is an audience, but the audience getting to hear the president’s message directly is selective to people who agree.”
The Center on Budget and Policy Priorities suggested a Social Security plan that would include some benefit reductions and also new ways to generate revenue, including retaining the estate tax and raising the maximum wages subject to Social Security tax.Organizations like the conservative Heritage Foundation have released studies claiming that Social Security’s rate of return for most Hispanics is actually inferior to what they would accumulate through private investments. Many Hispanics, however, start small businesses or work in the service industry where they are less likely or able to participate in employer-sponsored retirement plans like 401(k)s, said Torres-Gil. This increases their reliance on Social Security.
In addition, Hispanic youth, who are expected to make up 15 percent of the Hispanic population by the year 2050, would bear an even greater burden of benefit reductions, according to the study. “Communities have to ask themselves what is the future of young Latinos as they grow older and to what extent will local communities have to step in and fill the gap,” he said. “At this point, Hispanic leadership of the political community does not have Social Security or aging on its agenda.”Vail, Colorado