January 04, 2005

Affirmative Action?

Rich Lowry sees affirmative action potential in Social Security privatization:
The current Social Security system disadvantages blacks for reasons related to their historic mistreatment. Private accounts would go some way toward addressing this legacy of discrimination — as Democrats typically put it — but the supposed fiercest advocates of black interests are precisely the ones who will stand in the way.
Hey, that's brilliant. Though I bet the "fiercest advocates of black interests" are probably trying to figure out, you know, how to raise the life expectancy of African Americans. Lift many of them out of poverty. Reduce prison rates. Better health care. That sort of thing.

On a more serious note, Lowry's argument is wrong. Well-intended, I'm sure, but wrong. If you look at this chart, there's almost no difference in benefits per dollar of Social Security taxes paid among different races. (Except for Hispanic women, who get a really good deal out of the whole thing.) It's true that African Americans have shorter life expectancies, but they also have a higher disability rate, lower average wages (SS is a much better deal for low-wage workers), and tend to have more survivors.

Lowry also claims that African-Americans can bequest their savings upon death to a community, or survivors, or some such thing. That's true if they die before retirement. After retirement, they would receive annuity payouts, and there's no way to bequest from annuity. I suppose you could buy life insurance or some such thing, but I can't imagine that will happen very often.
-- Brad Plumer 1:54 PM || ||