Monday, January 12, 2009

Social Security and the end of white america

In this month's Atlantic, Vassar College professor Hua Hsu explains that America's majority white racial category is disappearing. To demographers this factoid is not all the surprising. Although Hsu's piece "The End of White America?" does get credit for teasing out the cultural implications of the shift in the total melanin in the US population.

While demographers have long been aware of the rise of majority-minority cities and the fact that the US will soon have no majority racial demographic, I was struck by one fact in Hsu's article. He writes:

According to an August 2008 report by the U.S. Census Bureau, those groups currently categorized as racial minorities—blacks and Hispanics, East Asians and South Asians—will account for a majority of the U.S. population by the year 2042.

Usually, I wouldn't worry too much about a random, even year somewhere in the future of my lifetime. The reason I do worry is that the Social Security Actuaries most recent report expects the Social Security Trust Fund to drop to zero. The fund will continue to take in revenue but have no accrued savings.

When it comes to demography and Social Security immigration is the most noted impact. Since immigrants tend to be younger and have more children they add to the working age population. Do not look behind the curtain and remind that those people will age eventually.

Yet few have talked about the impact of changing racial demographics on family structure and its perception of Social Security. A 2001 Census report on the living-situation of children breaks down how many live in extended family homes. The percentage of children living in extended family homes, most often created by the precense of an older relative is below.

Race Extended home
White 7.4
Non-Hispanic 5.6
Black 13.2
American Indian 16.9
Asian/Pacific Islander 20.6
Hispanic 17.5

As we can see non-Hispanic whites are least likely to live in extended family homes. If changing demographics shift this balance toward more such homes, cutting Social Security benefits may become more politically palatable as they will be seen as a support to workers to care for elders rather than a pure tax to retirees.

Obviousl this speculative but may be worth researching.

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