Wednesday, June 15, 2005


Expanding Coverage to Domestics and Other Itinerant Workers also Essential

Washington, DC - The National Council of La Raza (NCLR), the largest national Hispanic civil rights and advocacy organization in the U.S., released a report today urging Congress and the Bush Administration to strengthen the solvency and reach of the Social Security program for Latinos and consider options - such as add-on private retirement accounts, automatic 401(k)s, and making the saver's tax credit permanent and refundable - to further boost retirement security for this growing population. The Social Security Program and Reform: A Latino Perspective presents a comprehensive analysis of the Social Security program as it relates to Latino workers, taxpayers, and retirees.

"Maintaining solvency of the system is especially important for the Hispanic community," stated Janet Murguia, NCLR President and CEO. "Without Social Security, the poverty rate of eligible elderly Hispanics would more than triple, from 16% to 55%. Without the Social Security contributions made by Latino workers - which, according to a Census Bureau estimate, is $50 billion - the safety net we created to alleviate poverty would not be strong enough to support beneficiaries."

"As workers and as beneficiaries, Latinos have a profound stake in the debate over Social Security. It is critical to ensure that it is the social insurance program it was intended to be," continued Janet Murguia. "We need to make sure that all workers who pay into the system receive decent benefits when they retire. We must ensure that the Social Security program is fiscally sound so that young people today have guaranteed benefits years from now. And, we should do more, outside of Social Security, to encourage individual savings for retirement security for Latinos and all Americans."

NCLR's analysis found that the vast majority of Hispanic workers in the U.S. - 19.4 million Latinos - pay into the Social Security system. When compared with White and Black peers in many categories, Latinos are the least likely to receive Social Security benefits, for several reasons:
• Latinos who receive benefits tend to have shorter covered-earnings histories, lower average monthly earnings on record, and consequently, lower Social Security benefits than others with similar lifetime earnings.

• Many Hispanics are left out of the system because they work in informal sectors of the labor market or in occupations such as domestics and childcare workers, where Social Security rules may prevent them from earning quarterly credits that help them qualify for retirement benefits.

• Lax enforcement of earnings reporting in certain sectors, particularly for domestics and farm workers, prevents many Hispanic workers who have earned benefits from qualifying for social security.

"It is a must for us that the Social Security program include the hard-working domestics who help raise our children, farmworkers who put the food on our tables, and the health care workers who care for our sick and elderly. Despite paying their fair share into the system, they find themselves left out when it comes to retirement benefits," said Murguia.

NCLR's recommendations in the report include:
• Improving solvency through such measures as lifting the cap on wages subject to Social Security taxation from $90,000, considering expanding the revenue base with a capital gains and an estate tax surcharge, and considering modest changes to the normal retirement age if improvements to the disability insurance program can be instituted;

• Strengthening retirement security by creating add-on private accounts and enhancing savings vehicles such as 401(k) plans and private pensions, rather than carving out private accounts from the Social Security program; and

• Expanding eligibility for Social Security benefits by reducing the earnings threshold required for domestic and other itinerant workers, improving enforcement of earnings reporting, enhancing minimum benefits to levels above the poverty rate, and considering measures that would provide Social Security credit to those who stay home to care for children.

"We believe that everything should be on the table in this debate and we will focus on the substance and merits of all reform proposals," Murguia stated. "For example, our report found that add-on private accounts could help low-income workers build savings and assets over time without incurring the risks associated with a 'carveout' system. At NCLR, we will continue to analyze proposals, participate in the public discussion about Social Security, and educate the Latino community on these vital issues."

For more information or a copy of The Social Security Program and Reform: A Latino Perspective, please visit NCLR's website at or call Luisa Grille-Chope at (202) 785-1670.


source: NCLR release
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