By: Frank Morris Lopez
The coronavirus pandemic is having dire economic consequences, but it’s proving particularly dangerous for Latinos nearing retirement and hoping to enjoy financially stable “golden years.” Even before the coronavirus, Latinos trailed far behind white retirees in terms of financial security. Now, some academics, advocates, and lawmakers hope their policy proposals will help.
Tennessee school teacher Bobbi Negrón has seen the impact of the coronavirus on Latinos in her very own community. “One man in my neighborhood just drives around with his lawn mower in his pickup, asking people if they need their yard mowed,” she told USA Today.
A lack of jobs during the coronavirus has hurt Latinos more than any other group, who saw an unemployment rate of 18.5% back in April when the national unemployment rate was 14.7%. Non-Hispanic whites had a much lower 12.8% unemployment rate during that same time.
The COVID economy is forcing many Latinos into retirement early. Studies released this past spring point to an overall rise in the number of early retirements across the country. A report out from the Social Science Research Network found a 7% increase in the number of people retiring between January and April. Almost half of the newly retired were ages 50 to 65, despite many of those individuals anticipating to work until age 70.
Premature retirement and extended periods of unemployment mean less Social Security income. And, as the New York Times reports, that’s expected to adversely affect Latinos more than whites.
The combined rate of unemployment and underemployment for workers over age 65 was 26%, and those rates are especially high for Latinos and Black people, said Richard W. Johnson, the director of the program on retirement policy at the Urban Institute, in a New York Times interview.
Although this pandemic has put multiple Latino households in financial ruin, there were financial disparities before coronavirus. Hispanic households had only half of the retirement wealth that whites had, according to a 2016 report out from Boston College, and 75% of single Latino retiree incomes are too low to cover basic needs.
Researchers, advocates and policymakers say it’s not too late to make sure older Latinos are covered during retirement. Some policies being proposed at the national level by scholars, advocacy organizations, and lawmakers include:
- Raising the full Social Security annual benefit a worker could receive at age 62 — the earliest age one can file for Social Security — from 75% to 85%.
- Creating a basic minimum benefit tied to wage growth to prevent seniors from living in poverty.
- Changing the Social Security formula so that it’s based on a worker’s highest 25 or 30 years of earnings, instead of the current 35.
- Providing Social Security credits for time spent caring for family members.
- Establishing so-called “baby bonds,” which would give every newborn $1,000 in a government-funded trust account benefiting from compound interest. Children born into lower-income families would see more contributions to their accounts over time, and use of the funds would be limited to paying for college, starting a business, or purchasing a house.
“We can no longer wait, we need action now, as COVID-19 has exacerbated many historical, socioeconomic, and policy factors that have exploited communities of color,” said Abigail Zapote, executive director of Latinos for a Secure Retirement, when she spoke to members of the U.S. House of Representatives this past summer.
For now, Latinos are doing what they need to do to make ends meet. “We are strong people. But something has to change,” Negrón said.