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PORTSIDE  August 2010, Week 2

PORTSIDE August 2010, Week 2

Subject:

Social Security Keeps 20 Million Americans Out of Poverty

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Date:

Fri, 13 Aug 2010 21:51:29 -0400

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[For detailed breakdowns of the role of Social Security
by age, sex and state, see tables and figure at source
url -- moderator.]

Social Security Keeps 20 Million Americans Out of
Poverty: A State-By-State Analysis

By Paul N. Van de Water and Arloc Sherman
August 11, 2010
Center on Budget and Policy Priorities
http://www.cbpp.org/cms/index.cfm?fa=view&id=3260

Social Security benefits play a vital role in reducing
poverty. Without Social Security, according to the
latest available Census data (for 2008), 19.8 million
more Americans would be poor. Although most of those
kept out of poverty by Social Security are elderly,
nearly a third are under age 65, including 1.1 million
children. (See Table 1.) Depending on their design,
reductions in Social Security benefits could
significantly increase poverty, particularly among the
elderly.

___Social Security Lifts 13 Million Elderly Americans
Out of Poverty

Almost 90 percent of people aged 65 and older receive
some of their family income from Social Security. [1]
Without Social Security benefits, 45.2 percent of
elderly Americans would have incomes below the poverty
line, all else being equal. With Social Security
benefits, only 9.7 percent are poor. Some 13.2 million
elderly Americans are lifted out of poverty by Social
Security.

Social Security reduces elderly poverty dramatically in
every state in the nation, as shown in Figure 1 and
Table 2. Without Social Security, the poverty rate for
those aged 65 and over would exceed 40 percent in 42
states. With Social Security, the elderly poverty rate
in the large majority of states is less than 10
percent. Social Security lifts 1.1 million elderly
people out of poverty in California and Florida, almost
900,000 in Texas, and 800,000 in New York.

___Social Security Lifts More Than 1 Million Children
Out of Poverty

Social Security is important for children and their
families as well as for the elderly. About 6 million
children under age 18 (8 percent of all U.S. children)
lived in families that received income from Social
Security in 2008, according to Census data. Over 3
million children received their own benefits as
dependents of retired, disabled, or deceased workers.
Others lived with parents or relatives who received
Social Security benefits. In all, 1.1 million children
are lifted out of poverty by Social Security. Social
Security records show that 3.2 million children under
age 18 qualified for Social Security payments
themselves in December 2009. (See Table 3.) Of these,
1.3 million were the survivor of a deceased worker.
Another 1.6 million received payments because their
parent had a severe disability. And 301,000 children
under 18 received payments because their parent or, in
some cases, grandparent was retired. [2]

Technical Note

This analysis uses the official definition of poverty
used by the Census Bureau. In determining poverty
status, the Census Bureau compares a family's cash
income before taxes with poverty thresholds that vary
by the size and age of the family. The poverty
thresholds in 2008 were $10,326 for an elderly
individual, $13,014 for an elderly couple, and $22,025
for an average family of four. To calculate the anti-
poverty effects of Social Security, we determined each
family's poverty status twice - first excluding and
then including the family's Social Security benefits.

Our analysis uses data from the Census Bureau's Current
Population Survey (CPS), the survey that is used to
produce official poverty estimates. [3] Each March the
CPS collects information on personal income, health
coverage, and other social and economic characteristics
for the previous year. The national estimates reported
here are for 2008. The state-by-state estimates are
based on a three-year average (for 2006, 2007, and
2008) to improve the reliability of the results.

One critic of estimates such as these argues that they
"do nothing to answer the question of what would have
happened if Social Security had not existed."[4]
Indeed, this analysis does not take into account other
changes that would occur in the absence of Social
Security. If Social Security did not exist, most
elderly individuals likely would have saved somewhat
more and worked somewhat longer.

Other studies confirm, however, that Social Security
has made a very large contribution to reducing poverty,
and that cutting Social Security benefits could
substantially increase poverty among the elderly.[5]


End Notes:

[1] Kathy A. Ruffing and Paul N. Van de Water, Top Ten
Facts About Social Security, Center on Budget and
Policy Priorities, forthcoming.

[2] Social Security Administration, Annual Statistical
Supplement to the Social Security Bulletin, 2010, Table
5.J10.

[3] U.S. Census Bureau, Income, Poverty, and Health
Insurance Coverage in the United States: 2008, Series
P60-236, September 2009.

[4] Charles P. Blahous III, Reforming Social Security
for Ourselves and Our Posterity, Westport, CT: Praeger,
2000, p. 13.

[5] Eugene Smolensky, Sheldon Danizer, and Peter
Gottschalk, "The Declining Significance of Age in the
United States: Trends in the Well-Being of Children and
the Elderly Since 1939," in John L. Palmer, Timothy
Smeeding, and Barbara Boyle Torrey, eds., The
Vulnerable, Washington: Urban Institute, 1988; Gary V.
Engelhardt and Jonathan Gruber, "Social Security and
the Evolution of Elderly Poverty," National Bureau of
Economic Research Working Paper 10466, May 2004.

_____________________________________________

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to people on the left that will help them to
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