Tens of millions of aging workers and retirees entered 2020 without pensions and with limited savings, needing to work longer and depend on Social Security far more than their parents’ generation. 

The combined crises of COVID-19, job losses in the tens of millions, and a movement to challenge historic inequality have transformed the modest safety net of Social Security into a vital lifeline to enable sustainable retirements and avoid massive poverty.

That focus on inequality in all aspects of our national life shows up in Social Security as it does in education, healthcare and other systems. Average monthly payments to all recipients are at best modest, at $1,503 in June 2019. But when you break down that average by race and gender, stunning but predictable inequality leaps out:

• Women received on average $1,297 per month vs. men’s $1,627
• Separate and more unequal, Black women receive $1,131 per month vs. Black men’s $1,355
• Lowest payments go to Hispanic women at $999 vs. Hispanic men’s $1,201

Impact

These differences have significant effect on individuals and families from month to month. But over a 25-year retirement, they contribute mightily to the wealth gap. Thus:

• The average white male can expect payments of $488,100, plus cost-of-living adjustments
• On average Black women would receive $339, 300 in that same period

This lifetime difference of nearly $150,000 matters most to those who are totally or largely dependent on Social Security for all their retirement income. Again, women and people of color are more likely to have no other sources of retirement. 

According to the Social Security Administration: 

• Nearly HALF of Blacks and Hispanics over the age of 65 who receive Social Security rely on it for 90 PERCENT of their income
• This is true for less than a THIRD of white recipients. 
• Fully ONE THIRD—33 percent—of older Blacks and Hispanics are entirely dependent on Social Security for their income—double the 16% of whites  

According to the National Academy of Social Insurance, without Social Security, about half of older Blacks and Hispanics would have incomes that fell below the poverty line. In fact, even with Social Security, twenty percent are officially impoverished. 

Conclusion

These differences are not the result of an intentional effort to create unequal and unsustainable retirements. The Social Security formulas are based on work histories marked by unequal work opportunities, wages and disrupted careers. They simply reflect and then reinforce lifelong inequality in earnings, savings and pensions.

One can argue that steps could and should be taken to address these differences in the final stages of life. Regardless of one’s views on these larger questions, surely cutting Social Security payments in this new multi-threat environment would only deepen gender and race inequality.

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