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Welcome to 2017! President Obama has exited the stage, and a Trump presidency is now reality. If you’re still not shocked, remember this: Right now, more than half of all Black families in the United States today have no retirement wealth at all, meaning they will likely be entirely dependent on Social Security, which currently pays an average benefit of just $1,239 per month.

Where is all the money and who does have all the wealth?



According to a new report by the Institute for Policy Studies, the top 100 U.S. corporate CEOs have amassed $4.7 billion in their company retirement funds. You’d have to add up the retirement savings of nearly 60 percent of the poorest African-American families before you hit $4.7 billion. We’re talking about 100 CEOs having as much saved for retirement as 11 million Black families.

This grim picture will grow even grimmer if Republicans manage to push through their plan to overhaul Social Security. Introduced in December, the plan would cut benefits for all but the lowest earners by 17 percent to 43 percent by the year 2080, and hike the retirement age to 69 by 2030.

What’s behind the racial retirement divide? Discrimination in hiring and wage-setting has always kept Black workers at a disadvantage. But among those lucky enough to have a job with retirement benefits, the racial gaps have widened even more in recent decades. As the number of unionized manufacturing jobs started declining a few decades ago, CEOs began eliminating traditional pensions, the type that guarantee a monthly check after an employee leaves the workforce. Today, if companies offer retirement benefits at all, they tend to be 401(K)-type plans, which shift investment risk from the employer to the employee.

While we heard a lot during the election season about how the loss of high-paying manufacturing jobs with good retirement benefits has hurt the White working class, Black workers have suffered even more. In fact, according to Monique Morrissey of the Economic Policy Institute, the retirement gap between White and Black workers really started to grow in the 401(K) era. And among those with retirement savings today, the median balance is $22,000 for Black families, compared with $73,000 for White families.

According to a survey by the Prudential Insurance Company, African-Americans also retire earlier than whites, cutting short their ability to save for their golden years. Among current retirees, the average retirement age for African-Americans is 56, three years younger than the general population. This is not necessarily by choice. Although the Prudential survey did not examine the causes of early retirement, other research shows that health problems are the most significant factor among all U.S. workers. And the Center for Economic and Policy Research has found that older Black workers are significantly more likely to hold positions that are physically demanding. Among those 58 and older, such difficult jobs are held by 53 percent of Black workers, compared to just 43 percent of White workers.

The racial retirement gap reflects the broader problem of institutionalized racism in this country, which manifests in similar gaps in education, employment, wages (Black men make 75 cents on the dollar compared to their white counterparts), and wealth. According to a previous Institute for Policy Studies report, white families’ total wealth, including property, savings, and investments, has grown 84 percent over the past 30 years — three times the growth rate for the Black population.

To narrow the racial retirement divide, we need a comprehensive plan to address racial inequality writ large. The Movement for Black Lives policy platform released last summer is one source of ideas for tackling racial economic inequality as part of a broader agenda for racial justice. Progressive taxes and the expansion of Social Security benefits, as well as stronger labor rights, are necessary pillars of this effort.

As Rev. Martin Luther King once said of race and wealth in this country, “If our economic system is to survive, there has to be a better distribution of wealth … we can’t have a system where some people live in superfluous, inordinate wealth, while others live in abject deadening poverty.” These words are still so true today.

In the richest country in the world, everyone —including seniors of all races — should be able to live a dignified life.

Marc Bayard is an Associate Fellow and the Director of the Black Worker Initiative at the Institute for Policy Studies and Christopher Pitt is an IPS Next Leader Fellow.



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