Why Millennials Have the Greatest Stake in Social Security Expansion
Stephanie Connolly, Research Director of Social Security Works
Discussions about Social Security in politics and the media often focus on its role as a retirement program that provides vital protections to seniors. But the fact is that Social Security provides vital retirement, disability, and survivors’ insurance for all generations of Americans. In addition to significantly reducing senior poverty, Social Security is the nation’s largest children’s program and lifted 6.9 million Americans under age 65 out of poverty in 2014. And no generation has a greater stake in the fight to protect and expand Social Security benefits than today’s young workers, the millennial generation.
After coming of age in the wake of the Great Recession, millennials have inherited decades of wage stagnation and growing inequality. While median annual wages have grown just $1,422 in real dollars from 1986 to 2013, the average cost of attending a four-year college has more than doubled. Unless these trends reverse, many millennials will have to defer saving for retirement in order to pay off their educational debts, leaving them with fewer resources in retirement beyond Social Security. Indeed, millennials have accumulated less wealth than their parents’ generation had at the same age 25 years ago. These factors, combined with the disappearance of employer-sponsored traditional pension plans, mean that 3 in 5 younger households are at risk of being unable to maintain their standard of living in retirement.
The problem is particularly acute among millennials of color. Black and Latino households typically have lower incomes and significantly fewer assets than white, non-Hispanic households. And although Social Security benefits replace a larger percentage of lower earners’ incomes, their benefits are still smaller than those received by higher earners—leaving households of color less able to contend with the high healthcare costs experienced by seniors and people with disabilities.