Thursday, February 22, 2018
Business

Social Security redistributes money from minorities to whites

Social Security is sometimes billed as a great redistributive program that uses a broad tax on all workers to protect the elderly from poverty. But it has features that sound less appealing.

A well-known regressive feature comes from the rule that benefits must be annuitized, paid out over time in monthly installments rather than as a lump sum. This means that richer people who tend to live longer will get a bigger benefit than poorer people with shorter life spans.

Eugene Steuerle, Karen Smith and Caleb Quakenbush of the Urban Institute just discovered an unsuspected regressive feature. Considering its transfers across the generations, Social Security redistributes money from minorities — blacks, Hispanics and others — to usually wealthier whites.

For every $100 paid into the system, white beneficiaries receive $113 in benefits, blacks receive $89 and Hispanics receive $58. This feature will become more pronounced over time. Over the next 10 years, whites will get $120 for each $100 they put in — on average. Blacks will get $91 and Hispanics $62.

The reason is straightforward: The black and Hispanic populations are generally younger. For every elderly pensioner drawing Social Security, there are more workers contributing payroll taxes.

Steuerle and his co-authors contend that this matters. "If one of Social Security's goals is to provide greater relative protections to the most vulnerable, one must ask whether that was a desired or accidental outcome," they write.

The program was indeed intended to be progressive — replacing a higher share of lifetime earnings for poorer workers. But as Steuerle notes, other features can annul this progressivity, and even turn Social Security into a regressive program.

Comments
Hillsborough commissioners ask CareerSource chief to step down or be fired

Hillsborough commissioners ask CareerSource chief to step down or be fired

TAMPA –– Hillsborough County commissioners voted Wednesday to ask embattled jobs center leader Ed Peachey to either resign or face termination over concerns the agency inflated job placement numbers with the state. Chairwoman Sandy Murman said commis...
Updated: 7 hours ago
CareerSource jobs chief Edward Peachey could soon be out of work

CareerSource jobs chief Edward Peachey could soon be out of work

CLEARWATER — The heads of the Pinellas and Hillsborough jobs boards will hold emergency meetings in the coming days to consider firing president and CEO Edward Peachey. Jack Geller, board chairman of CareerSource Pinellas, and Dick Peck, chairman of ...
Updated: 8 hours ago
St. Pete's World Liquors sign will live on at new home

St. Pete's World Liquors sign will live on at new home

A local landmark for a half century isn't coming down for good.
Updated: 11 hours ago
Investor calls for Bloomin’ Brands to let Outback Steakhouse stand alone

Investor calls for Bloomin’ Brands to let Outback Steakhouse stand alone

TAMPA — A second activist investor is calling for a big shake-up at Bloomin’ Brands Inc. In a letter to Bloomin’s CEO, Barington Capital Group, a New York-based investment firm, urged the Tampa-based restaurant conglomerate to let ...
Updated: 12 hours ago

Uber unrolls new pool service that could drastically cut fare

A new way to Uber is coming to Florida, but the "Express Pool" feature is only rolling out in Miami and seven of other cities to start.That means Tampa Bay will have to wait and see if it will get access to Uber’s latest offering, which links riders ...
Updated: 12 hours ago
Clearwater Beach named No. 1 in U.S. by TripAdvisor

Clearwater Beach named No. 1 in U.S. by TripAdvisor

A reigning champion for sand and sunshine, Tampa Bay is once again home to what’s been deemed the best beach in the country. Clearwater Beach was named the best beach in the U.S. for 2018 by the popular travel site TripAdvisor reclaiming the crown tw...
Published: 02/21/18
This week food fests celebrate collard greens and Jewish foods

This week food fests celebrate collard greens and Jewish foods

FIELD OF GREEN: COLLARD FESTOn Saturday you can devote your whole day to the beauty of collard greens. Well, that’s the jumping off point. Collards are the "central ingredient" at the Tampa Bay Collard Green Festival at St. Petersburg’s Historic Deuc...
Published: 02/21/18
Tampa Bay homes prices soar by double-digits in January

Tampa Bay homes prices soar by double-digits in January

Home prices soared in Pinellas and Hillsborough counties in January, the highest gains in several months. Prices for single family homes also rose in Hernando and Pasco as the shortage of available homes showed no immediate sign of easing. The bay a...
Published: 02/20/18
Updated: 02/21/18
Career Q&A: Nut allergy is a serious workplace concern

Career Q&A: Nut allergy is a serious workplace concern

Q: My manager has recently started eating nuts at her desk, which is located right next to mine. Unfortunately, I have a serious nut allergy, so any contact with them could produce a life-threatening reaction. Even foods which contain tiny pieces of ...
Published: 02/20/18
Yes, we have some bananas: Port Tampa Bay welcomes first shipment in 21 years

Yes, we have some bananas: Port Tampa Bay welcomes first shipment in 21 years

TAMPA — More than two decades after the last bunch arrived on shore, bananas are back at Tampa’s port. More than 3,900 pallets of Chiquita bananas from Ecuador arrived last week at the new Port Logistics Refrigerated Services warehouse.It was the fir...
Published: 02/20/18