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Mar 24

Urban Institute: Social Security Transfers Wealth From Poor to Rich

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A 2004 study by C. Eugene Steuerle, Adam Carasso and Lee Cohen of the Urban Institute, entitled “How Progressive is Social Security and Why?,” found that Social Security is a massive transfer from poor groups to rich Americans.

Although “Social Security was designed to redistribute income from those with higher lifetime earning to thos with lower lifetime earnings,” the results have been JUST THE OPPOSITE. “[L]ess-educated, lower-income, and nonwhite groups benefit little or not at all from redistribution” from Social Security.

In reality, the Social Security program redistributes incom from “shorter-lived groups (such as men and the less educated) to longer-lived groups (such as women and the better educated) through annuities whose lifetime value depends upon life expectency.”

Single women “(including many divorced women), . . . fare much more poorly than married women–a fact hidden in the data on all women.”