This Week:

Social Security Reform and African-Americans

Petition in Support of the Universal Declaration of Human Rights

Local Demo in support of the Declaration December 10th

Greetings,

The Social Security Project of Minnesota is in the process of setting up a website. It'll be the greatest thing you've ever seen. This week's Nygaard Notes includes a copy of one of the pages that will be on the site. Interesting and important in its own right, I hope, plus it gives an idea of what you can look forward to on the site.

I send along an E-mail I got encouraging you to add your name to the list of supporters of the UDHR. I realize that the largest and most powerful countries routinely ignore any laws or conventions that are inconvenient, domestic or international. Nonetheless, I think it is important to evidence popular support for the attempt. After all, it does seem to have the support of the majority of the world's people. So here it is: If you want to look at the actual document, go to http://www.unhchr.ch/html/menu3/b/a_udhr.htm . Check out Articles 22-26 especially. They are not often mentioned in this country.

‘Til next week,

Nygaard

Social Security Reform and African-Americans

[A Fact Sheet produced by the Social Security Project of Minnesota]

Key facts:

• 68.3 percent of African-American seniors are either poor, marginally poor or economically vulnerable.
• One third of African-American seniors fall below the poverty line. 11% of Euro-Americans fall below the poverty line.
• As of 1993, only 53.7 percent of African-American seniors had gone to school beyond the 9th grade, compared with 75.9 percent for the population as a whole.
• The average Social Security income for African-American seniors is $6,846 compared to $8,065 for their Euro-American counterparts.
• The average annual disability benefit received by African-Americans is $7,577 compared to $10,387 for Euro-American seniors.
• Social Security accounts for almost one half (48 percent) of the total income of African-American seniors. For Euro-American seniors, that number is 42 percent.
• African-Americans make up 12 percent of the population of the United States
• African-Americans comprise 18 percent of the workers receiving Social Security disability benefits.
• 23 percent of the children who received Social Security benefits in 1996 because workers in their families were disabled were African-American.
• 15 percent of the spouses who received Social Security benefits in 1996 because workers in their families were disabled were African-American.
• African-American children make up nearly a quarter of those receiving Social Security survivor beneficiaries paid because a parent is dead.
• Nearly half of all African-Americans who receive Social Security benefits of any kind (47 percent) receive disability or survivors benefits. 28 percent of Euro-American Social Security beneficiaries receive disability or survivors benefits.
• Social Security is the only income for 16% of elderly Americans. 78% of African-Americans over age 70 rely on Social Security for all their income.

Effects of Social Security Reform on African-Americans

If we wanted to reform Social Security in the interests of African-Americans, we would attempt to make the funding of the program more progressive (based on ability to pay), its benefits more generous, and the overall system more redistributive (transferring money to those most in need). A special attempt would be made to improve disability and survivors' benefits.

The funding of the system could be made more progressive by: exempting from payroll taxes all wages below the poverty level; removing the cap (currently $68,400) above which wages are not taxed; using funds from general revenues, which largely come from progressive income taxes, rather than increases in regressive payroll taxes, to make up any future funding shortfalls; imposing new taxes on excessive wealth (e.g. luxury consumption taxes).

Social Security's benefit structure could be made more generous by raising the overall level of benefits sufficiently to guarantee freedom from poverty to all recipients, and by increasing the progressivity in the basic benefit structure.

These two changes would make the overall system more redistributive, which could be an important part of an attempt to address historical patterns of poverty in the African-American community.

Since African-Americans benefit relatively more from disability and survivors' benefits, these benefits must be protected, at minimum, and, preferably, increased.

The Two Mainstream Proposals: One Bad, One Worse

None of the above proposals are currently on the table in the discussion about reforming Social Security. Since the public discussion is based on the premise of a false fiscal "crisis" rather than on the real crisis of inadequate and dwindling economic security for the majority of Americans, the agenda is focused on cutbacks. Conservatives propose the radical idea of privatizing the system, and the "liberal" alternative is to cut benefits and/or raise taxes. Both of these approaches would be bad for African-Americans.

Privatization would be by far the worst option for African-Americans, for a number of reasons. First of all, benefits in a private system would depend on the returns on investments made and the compounding of interest. Therefore, those with higher incomes and thus more to invest would get higher benefits, both in absolute and relative terms. This would completely remove the redistributive nature of the current system, to the detriment of African-Americans.

Secondly, all of the privatization plans under consideration would reduce both disability and survivors' benefits, from which African-Americans derive relatively greater value.

Thirdly, recent studies have shown that promises of higher "rates of return" in the private markets - relative to those guaranteed by Social Security - are questionable at best, and most likely just plain false. Further, retirement benefits under a private system would be exposed to greater risk, and would be neither guaranteed nor protected against erosion due to inflation, which poses the greatest risk to those who depend the most on these benefits. Finally, the costs involved in managing private accounts would take a relatively bigger bite out of the smaller accounts that would be disproportionately held by African-American workers and their families.

The "liberal" alternative, that of maintaining the current system by raising taxes and/or cutting benefits, would also be a bad deal for African-Americans, since the cuts being considered would fall harder on them. Raising the retirement age, for example, would have a larger impact on African-Americans due to the shorter average life expectancy in that population. Further, since African-Americans more often perform repetitive or physical work (due to a variety of reasons, including lower average levels of education), retirement at younger ages is often necessary. Thus, increasing the retirement age would deprive a higher percentage of this population full retirement benefits than would be true for Euro-Americans, more of whom work in academic or professional occupations.

The cuts that would result from the proposed reduction in the Cost of Living Adjustments used to set benefit levels would affect all Social Security recipients. However, they would fall harder on African-American recipients, since Social Security benefits make up a larger share of their total income.

The Heritage Foundation has issued several reports claiming that privatizing Social Security would be a better deal for everyone, and specifically for African-Americans. Much of their "research" and the claims that flow from it have made their way into the discussion about reforming Social Security. Although they claim to be interested in "educating" the public about the issues involved in Social Security reform, their actual intentions may be grasped from the following quote from their report "SOCIAL SECURITY: Improving Retirement Income for All Americans" by William W. Beach, Stuart M. Butler, Gareth G. Davis, and Daniel J. Mitchell. Read carefully:

"Polling shows that although Americans are not familiar with the financial details, they are very skeptical about the likelihood that Social Security will provide them with the income security they need in retirement. To build public support for reform, this general insecurity about Social Security needs to be focused; an effective education campaign should be mounted to give Americans a clear idea of the program's current shortcomings and the attractive alternatives. ABSENT FROM SUCH A CAMPAIGN SHOULD BE THE IDEA THAT MANY RETIREES RECEIVE FAR MORE FROM SOCIAL SECURITY THAN THEY PAID INTO THE SYSTEM. Most of the elderly do not believe this, and trying to make that case would only heighten their anxiety, anger, and resistance to change. Many young Americans also assume that cutting excessive retirement benefits means they will have to help their parents as well as worry about their own retirement." [emphasis added]

For a clear analysis of the full Heritage Foundation report, and by extension of the general impact of privatization on African-Americans, see the excellent report from the Center on Budget and Policy Priorities entitled, "Flaws in Heritage's Assessment of Social Security's Rate of Return for African-Americans and Hispanic Americans" http://www.cbpp.org by Kilolo Kijakazi. To view the report, go to the Center's website http://www.cbpp.org and click on "Social Security and People of Color."

Universal Declaration of Human Rights

To celebrate the 50th Anniversary of the Universal Declaration of Human Rights, Amnesty International is collecting osignatures for a pledge to support this very important United Nations declaration. Amnesty already has 3 million signatures (real and virtual) world wide, and wants 8 million (which would be 1% of the world's population).

The UN Secretary General has already agreed to be present either in person or live by satellite, if he has to be in New York, to receive the pledge as a tangible statement of the people of the world's commitment to an international agenda of human rights.

The most simple way to add your name to the pledge is to Send an email to udhr50th@amnesty.org.au Put YOUR NAME in the SUBJECT and the following text in the message: "I support the rights and freedoms in the Universal Declaration of Human Rights for all people, everywhere." Then, forward this message to as many people as you can.

Nygaard sez: Amnesty International has a website, of course. Check them out at http://www.amnesty.org/

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On a local note, there is also a demo in support of this document. Here's the info on that:

CALL TO ACTION: International Human Rights Day is December 10. There will be a rally at the Federal Courthouse Building in Downtown Minneapolis beginning at 4:30 p.m. on December 10.

Please Plan to Attend this important event in support of global human rights. Every organization concerned with human rights should attend. This is a collaborative rally! Spread the news to your colleagues and other groups. Possible rallying points include:

• Signing of the International Declaration of Human Rights
• Protesting the US refusal to sign the declaration
• Call for more international cooperation, monitoring, and enforcement of human rights guarantees
• Support for UN Human Rights decrees and resolutions
• Protest of US corporate human rights abuses
• Protest of military-corporate regimes
• Highlights of domestic and global human rights issues, especially often overlooked Southeast Asian and African campaigns
• Co-factors of human rights abuses including HIV, systemic violence, poverty, and environmental destruction

[Mark Schommer MINNESOTA FREE BURMA COALITION (MFBC) 2549 Harriet Avenue South, #2 Minneapolis, MN 55405 Phone: (612) 874-7899 Fax: (612) 683-0228 E-mail: MFBC8888@hotmail.com Web: http://www.freeburmacoalition.org/ Personal E-mail: schom006@tc.umn.edu ]