African Americans have been freed from slavery for over (depending on whom you ask 125 years), or so the story goes. Today African American men under force of law and at the point of a gun, “contribute” 15% of their salary to supplement the lifestyle of old white women. Perhaps that sounds like a lie, perhaps you think I am skewing the numbers. How could that blatant a wealth transfer, defacto slavery (which I am defining here as involuntary servitude for the benefit of another), be allowed to exist in this day and age? Because of the stereotypes put forth by the media the reader might think that this must be a Republican plot to plunder the poor for the benefit of the rich, right?
Actually no, it is primarily at this point a Democrat plot, Democratic because they are the party that successfully balked George Bush’s plan to privatize large parts of this racist plot. Social Security was originally designed to help the poor as a safety net in retirement for those who weren’t able, for one reason or another to provide for their own retirement during their working life. Unfortunately, as is so often the case when the government gets involved, it is now a program that takes money from relatively poor minority men and gives it to the relatively rich majority women. No longer is it a safety net for those who didn’t save, now it is a primary source of retirement income for too many and even the wealthy that have provided adequately for their own retirement are not means tested out.
The primary problem I am describing in this post is, in a nutshell, that black men and white women don’t have the same life expectancy.
In the early eighties the Greenspan commission deliberated how to “Save Social Security” the strategy they settled on was to raise the retirement age. This delayed the age at which citizens could draw full benefits and thus reduced the amount Social Security would disperse through that person’s lifetime and thus prolonged this Ponzi scheme for another 30 years. Because black men have a life expectancy of 70 years see (http://www.cdc.gov/nchs/fastats/lifexpec.htm) and because if you make the wrong choice you don’t start drawing Social Security benefits until age 70, the average black man will never see any Social Security benefit. Even if he were to choose to start drawing benefits at age 65, he would only see benefits on average for five years. After having paid into the system for on average 40+ years? On average the African-American male doesn’t even have a statistical chance of receiving what could be considered a fair amount of interest on their money.
But white women do! On average they live to be 81 years of age. They draw full benefits for eleven years or partial benefits for sixteen years, in either case they draw out a far greater amount of money than black men do. Adding to this disgrace is the fact that while women’s organizations are aware of this issue, they fight to preserve this inequitable system. To see where the National Organization of Women stands on this issue go here http://www.now.org/issues/economic/social/
Because white men and black females on average live to 76 years of age, their affect on the system is a statistical wash however; both of these groups are also required to contribute to the support of white women in the later years. The inequity is not as pronounced, but it is still there. This is really a story of how the real majority in the United States, white women (45% of the population) derives the cost of their retirement from the blood sweat and tears of the minority and uses their majority at the ballot box to ensure this inequitable system stays in place.
A fairer system would be one that rewarded people commensurate with their contribution and provided a safety net for those at the lowest reaches. A system such as this would run far lower overhead and earn far greater returns. Most importantly such a system would allow the contributor to own the account. At this point, because you don’t own the money paid into Social Security, each person is robbed of the opportunity to pass the amount in their account on to their heirs. If they pass away prior to exhausting the funds in their account, those funds could be passed to their estate and benefit those they felt were deserving. As it stands now, when someone dies before receiving more in compensation from Social Security than they “contributed”, the system consumes the surplus and in the great percentage of situations this is the case with black male contributors.
I envision a system where everyone is required to save 7.5% of their salary. At the same time their employer would be required to match this 7.5% with another 7.5%. Like a 401K plan, the proceeds could be invested in a wide variety of options. Under this plan 2% of the assets in the plan would be “taxed” to support those in the lowest 10%. For illustration, I have created a chart that assumes someone start paying into the plan at age 22 and earn $30,000 with annual salary growth of 2.5% and 8% interest on average. Age 68 a person could retire with returns on investment exceeding their income and still pay $24,650.10 per year to support someone else. Because only the lowest 10% would qualify for benefits, 9 people would be supporting them. The other 90%? They would have enough savings to support themselves.
I started off deriding the inequalities of the current system, is this one any better? The same black man who dies at age seventy on average, is able to give his heirs almost $1.5 Million dollars. The white woman who currently depends on the untimely death of the black man for her maintenance in her old age? If she dies at the average age of 81 she is supported throughout her life and passes her heirs about $1.1 Million if she lives longer, she will run out of money at age 91, a long time after the average and once she passes into the lower 10% others paying into the system would supplement her income. Seems much more ethical all around.
