A June 19 New York Times article repeated the false claim that Social Security shortchanges African-Americans because of their lower-than-average life expectancies. In fact, both the Social Security Administration (SSA) and the Government Accountability Office (GAO) have refuted this claim.
The Times reported: "Groups with shorter life expectancies, like African-Americans, receive fewer benefits than those who live longer." But Stephen C. Goss, then-deputy chief actuary of the SSA (now chief actuary) and Robert J. Myers, former SSA chief actuary, both refuted this claim in 1998, noting that the rate of return on Social Security for African-Americans (and other racial and ethnic minority groups) is equal to or greater than for the white population, as Media Matters for America has noted. Similarly, GAO (then known as the General Accounting Office) concluded in an April 2003 report titled "Social Security and Minorities" that "[i]n the aggregate, blacks and Hispanics have higher disability rates and lower lifetime earnings, and thus receive greater benefits relative to taxes than whites."
Because a retiree's monthly Social Security benefit level is based on his or her pre-retirement income, it's literally true that blacks -- who have lower average incomes than whites -- receive "fewer benefits" in raw dollars than whites. But this discrepancy is unrelated to life expectancy. Social Security's benefit structure is progressive -- i.e., lower-income workers get more from Social Security benefits than what they paid in taxes, while higher-income workers get less than they paid in -- so, blacks often receive a higher return.
While blacks do have lower life expectancies than whites, this difference has little impact on the two groups' rates of return on Social Security. That's because the lower life expectancy among blacks is largely due to higher mortality rates for black infants and children. But infants and children who never contribute to Social Security are not shortchanged by not receiving benefits. By contrast, blacks who do reach retirement age -- having contributed to Social Security for their entire working lives -- live nearly as long into retirement as whites. According to a 2004 report by the Centers for Disease Control and Prevention's National Center for Health Statistics, the difference in life-expectancy for blacks and whites who survive until age 65 (depending on birth cohort) is only about two years.
The Times' falsehood mirrors one of President Bush's talking points in support of his proposal to partially privatize Social Security. Economists Dean Baker and Mark Weisbrot noted the underlying cynicism in this approach to Social Security's purported racial inequities in a January 18 Center for Economic Policy and Research report. They wrote: "One policy approach would be a renewed emphasis on efforts to close the racial gap in life expectancy and income. However, the direction of President Bush's comments, like the assumptions in these projections, is to take these race or gender based differences as facts, and then adjust government policy accordingly."