Older Americans Are Working Longer As Social Security Reforms Are Spotlighted

67% of single Black retirees have incomes below the Elder Index, a University of Massachusetts Boston data set that measures whether or not older people can afford their basic living expenses

As BLACK ENTERPRISE previously reported, older Americans are still in the workforce, working longer than they have in previous years because many cannot afford to retire.

According to Visual Capitalist, 22% of retirement-age workers nationwide are still employed; however, the number of self-employed workers is 25%.

There are, of course, some states where retirement-age workers far outpace those averages.

In New Jersey, 33.8% of the workforce is composed of retirement-age workers, followed by North Dakota (32.8%), Maryland (31.2%), New Hampshire (30.9%), and Connecticut (30.3%). According to the Federal Reserve, only 51% of American adults between 65 and 74 had a retirement account.

For adults who are 75 and older, that number drops to 42%.

According to HR Dive, for Black retirement-age adults, those numbers are lower.

According to The New York Times, 67% of single Black retirees have incomes below the Elder Index, a University of Massachusetts Boston data set that measures whether or not older people can afford their basic living expenses. In contrast, for white Americans, that figure drops to 50%.

According to Kilolo Kijakazi, a fellow at the Urban Institute who focuses on income, wealth, and race, the disparities are related to the racism present in the labor market that extends back to the enslavement of Black people.

“We have a history of discrimination in hiring, pay, promotions and benefits. Discrimination in hiring also contributes to occupational segregation. White people dealt in human trafficking of people of African descent to create wealth for white people, but Black people did not benefit from the wealth of their labor,” Kijakazi told the outlet.

Kijakazi concluded, “After Emancipation, we had laws and regulations designed to maintain that effect and even strip Black people of wealth they were able to create for themselves in the face of these odds.”

As Darrick Hamilton, an economist and the executive director of the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University, told the Times, a head start for white Americans in wealth creation puts Black people behind the everyday eight ball.

“The way that wealth is generally created for most Americans is that wealth begets more wealth,” Hamilton said. “Having access to a capital foundation that puts you into assets that will passively appreciate over your life — that’s how most Americans generate wealth.”

Social Security, the entitlement program that pays out retirement benefits, does incentivize working longer. However, a majority of Black workers work in industries that make it more difficult for them to work until they reach the age they receive their full retirement benefits at 70 years of age.

Social Security Works, a progressive organization seeking to reform Social Security so that it works for the modern worker, has proposed a simple change that they surmise would benefit Black and other workers of color as they retire.

Under their proposals, workers who reach the age of 62 would receive 85% of their full retirement benefit, which would rise to 100% once they hit the full retirement age of 70.

According to a 2023 joint study from the Center for Retirement Research at Boston College and the Urban Institute, making the United States government’s retirement benefits formula more favorable to low-income workers would benefit Black workers, but not as much as simply paying them more for their labor.

According to the study, “Although many of the benefit adjustments we model would disproportionately help Black and Hispanic beneficiaries and narrow gaps in Social Security benefits, none would come close to eliminating those disparities.”

The study concludes, “Achieving equity in Social Security benefits for Black and Hispanic adults would require substantial progress toward equality in labor market outcomes. Although mortality and marriage also shape Social Security benefits by determining how long people will collect benefits and whether they have access to spouse and survivor benefits, lifetime earnings are the primary driver of benefits. This leaves Black and Hispanic workers at a disadvantage because they receive lower hourly wages and work fewer years, on average, than white workers. Our recent analysis of the structural factors responsible for the shortfall in Social Security benefits for Black adults found that improving Black workers’ lifetime earnings could most improve their retirement security.”