August Op-ed: Social Insecurity

Summary

Social Security is critical to many older Americans especially with today's economy. Hilaria Vallejos thought she would receive the benefits but what she didn't know was that her employer never reporter her wages. She now finds herself without the benefit.

Full Text

Hilaria Vallejo was shocked to learn that after 35 years of picking tomatoes in farms across the southern United States, she was not eligible to receive Social Security benefits. Born in southern Texas, the 77-year-old was unaware that her employers did not report her wages or withhold Social Security taxes. “At the time, we were just happy to be getting paid, but we didn’t know what they were doing,” she said. “They took advantage of us.” With an amputated leg due to a cancerous tumor and an aging body, Hilaria cannot work to sustain herself. Without the Social Security benefits she should have earned, she depends on the little help she gets from her five children to pay her bills and buy groceries. “I’m an American citizen,” said Hilaria. “I worked many years in this country’s fields.”

As the economy heads toward recession, Hilaria’s financial stability is even more at risk. Unlike Hilaria, most elderly Americans and people with disabilities can find at least some relief in Social Security, a federal insurance program to which workers contribute through mandatory payroll taxes and employer matching, and from which they collect benefits in the event of retirement, disability, or death. During times of economic hardship, Social Security benefits become critical to meet immediate needs.

Unfortunately, Hilaria’s situation is the reality for many members of our most vulnerable communities who face economic insecurity because they lack this social insurance. Almost 30% of Latinos age 65 or older do not receive Social Security benefits, while only 10% of the general population in this demographic does not receive Social Security. Today, more than half of elderly Latinos rely on Social Security for 90% of their income. Without Social Security, nearly two-thirds of Latinos over the age of 65 would live in poverty.

Low wage employment, lack of wage reporting, and errors in employment classification are some factors that contribute to the gap in Social Security coverage. Workers that earn minimum to low wages are less likely to be covered by Social Security, leaving them at risk for bearing financial burden after retirement or in the case of a debilitating medical emergency. In addition, employers like Hilaria’s, who fail to report wages or withhold Social Security taxes, rob workers of these crucial benefits. Many employers also misclassify workers as independent contractors who need to file their own social security taxes. Unaware that the Social Security tax is not withheld from their wages automatically, these employees unknowingly forfeit their Social Security benefits.

August marks the 73rd anniversary of President Franklin D. Roosevelt’s signing of the Social Security Act into law. Many Latino workers have not benefited from Social Security, despite the contributions that they have made to the U.S. economy before and after the bill became law. This disparity in coverage affects our nation’s economy as a whole. As the Baby Boomers retire, the number of working-age adults that contribute to Social Security significantly decreases. As a younger population and an important growing part of the workforce, Latinos will play a large role in paying for the retirement of the Baby Boomers.

Undocumented immigrants, often targeted in the media as “freeloaders,” also contribute to Social Security. The Social Security Administration Chief Actuary estimates that 75% of undocumented workers, most of whom will never see any Social Security benefits, pay Social Security taxes; they will contribute as much as $7 billion annually to the Social Security trust fund.

In an effort to inform the discussion on these disparities, the National Council of La Raza (NCLR) – the largest national Hispanic civil rights and advocacy organization in the United States – has published “Domestic Workers Working Hard to Sustain American Families, Compromising Their Social Security” and The Social Security Program and Reform: A Latino Perspective; both available on www.nclr.org. Conducting important research and releasing publications like these is just the first step to address the critical needs of the older members of our community. They, like all working Americans, have made invaluable contributions to our country, and it is our obligation to ensure that their basic needs are met.

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