June 30, 2005
By Lisa Marie Gomez
Latinos disproportionately benefit from Social Security because they tend to earn less money over their lifetimes, live longer, have larger families and are more likely to suffer a disability than any other racial or ethnic group, according to a study released Tuesday.
That's why any proposal to reform Social Security that cuts benefits, or replaces it with private investment accounts, has the potential to hit the Latino community hardest, according to the findings of the Center on Budget and Policy Priorities in Washington.
The report, titled "Hispanics and Social Security: The Implications of Reform Proposals," examined various proposals to revamp the current system, which has been in place for more than 70 years.
Saying that the system's long-range viability is in jeopardy, President Bush has called for allowing younger workers to shift some of their payroll taxes into private investment accounts. Many Democrats oppose such a plan because they believe it would be a first step toward privatizing Social Security.
"We hope from this report that we will point out in an objective manner why Social Security is so crucial as the safety net for the Latino community as a whole and as a retirement plan for older Latinos," said Fernando Torres-Gil, a co-author of the report and director of the UCLA Center for Policy Research on Aging.
He also hopes that over coming months and years, Latinos make it a point to understand the proposed changes to Social Security and their potential impact.
Places with large Hispanic populations such as Los Angeles, Miami, the Rio Grande Valley and San Antonio, which has a Latino population of almost 60 percent, should pay close attention to the various proposals to reform Social Security, the Center found.
If Social Security doesn't continue to provide a basic safety net for Latinos, the responsibility will fall on others.
"Those municipalities have to be concerned as to the extent that their elderly Latinos find that their reliance on Social Security becomes tenuous, then those communities will be forced to pick up the slack," Torres-Gil said.
Andy Hernandez, director of the 21st Century Leadership Center at St. Mary's University, said the kind of changes being proposed to reform Social Security would have a direct impact on the economy of San Antonio.
"This study is more evidence that we should go slow," said Hernandez, an expert on Latino political affairs. "People really need to study the question (of whether Social Security should be changed) because sometimes changes aren't for the better."
It's harder for Latinos to invest in a 401(k) or other pension plan because they often have jobs lacking such benefits.
"Latinos are very entrepreneurial," Torres-Gil said. "This is a population that is more likely to have a small business, to work in service industries, or agriculture where they're less likely to have a defined benefit plan and/or opportunities for a defined contribution plan."
Not to mention undocumented workers, who get Social Security money taken out of their paychecks, but never see that money again, he said.