Campus research brief details disparities in retirement financial prospects between whites, blacks and Hispanics

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UC Berkeley researchers from the campus Center for Labor Research and Education released a research brief detailing significant disparities between retirement financial prospects for U.S. whites and for blacks and Hispanics.

The “Black and Latino (In)Security” brief, which was published on the center’s website in late February, states that the rate of elder poverty for Latinos and blacks aged 65 and older is nearly double that of the overall senior population, with 19.3 percent of black seniors and 19 percent of Latino seniors reporting incomes below the federal poverty line.

This is a noted contrast to the 9.4 percent rate of elder poverty for the senior population as a whole and an even more striking contrast to the 7.4 percent rate of senior poverty for whites.

“(We expected) to find that Latino and Black seniors would have high poverty rates but not twice as much (as the rest of general population),” said Nari Rhee, associate academic specialist at the center and lead author of the study. “Generally, this is in part an outcome of a lifetime of structural inequality in the labor market.”

Rhee based the brief’s findings on data from the U.S. Bureau of Labor Statistics Current Population Survey and U.S. Census Bureau American Community Survey.

The brief said that fewer than half of employed blacks and fewer than a third of employed Hispanics received retirement funds from an employer-sponsored plan, illustrating that “both job access and quality are critical to improving retirement prospects for the current generation of Black workers.”

Additionally, researchers found that while blacks rely more heavily on Social Security than whites do, they also receive much lower benefits.

“That’s after a lifetime of having lower earnings and longer periods of unemployment and more disability,” Rhee said, which in turn translates into fewer Social Security benefits and difficulty accumulating personal wealth to live off of in retirement.

“The experiences of insecurity in … retirement years are simply a mirror reflection of their experiences in their working years,” said Steven Pitts, labor policy specialist at the center.

Pitts noted that people of color are disproportionately poor and less likely to work in settings where employers offer retirement benefits and, as a result, are more reliant on Social Security in their senior years. Reducing or cutting the program would thus disproportionately affect Hispanics and blacks, leading to even more pronounced racial disparities.

He said that while cuts to Social Security may seem like a colorblind policy, they would actually have very “racialized outcomes.”

While acknowledging that strengthening the capacity of blacks and Hispanics “to engage in the labor market and achieve better wages” is no easy task, Pitts said that without fighting for “racial justice in the workplace, the results you find in the report will be maintained.”

Sara Grossman covers research and ideas.