The privatization of Social Security will harm Hispanics in the United States. Hispanics benefit greatly from the current system of Social Security because it helps people with the following characteristics: those who have (1) lower-than-average income, (2) higher incidence of disability, (3) more children per family, and (4) longer-than-average life expectancies. Unlike other ethnic/racial groups, Hispanics have all four of these characteristics. This suggests that Hispanics benefit the most from the current system and, in turn, that Hispanics would be most affected by changes to the current system. Although there are studies suggesting that Hispanics will benefit from the privatization of Social Security, some of these studies, however, contain major flaws that undermine their conclusions. They neglect to discuss transition costs and stock market risk. They also make incorrect assumptions. Specifically, they assume that Hispanics have financial knowledge and/or experience and Hispanics have similar life expectancies to other population groups. Lastly, these pro-privatization studies consist of methodological flaws. The immense growth of the Hispanic population in the United States over the last few decades magnifies the impact of the potential privatization of Social Security. Changes to the current Social Security system will not only harm the current Hispanic population, but it will also harm future generations of Hispanics. If the Hispanic population makes poor investment choices, then more people will be worse off, ultimately adding to the poverty crisis in this country. If the current Social Security system cannot be maintained, the government must make sure that the changes will still benefit Hispanics.
"How Hispanics in the U.S. Fare Under the Privatization of Social Security,"
Colgate Academic Review:
Vol. 3, Article 6.
Available at: http://commons.colgate.edu/car/vol3/iss1/6