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Social Security Lifts 22 Million Americans Out of Poverty

October 25, 2016 at 2:45 PM

Social Security lifted 22 million people out of poverty last year, our new analysis of Census data finds.  Social Security’s anti-poverty effect extends to every state, lifting more than 1 million elderly people out of poverty in California, Florida, and Texas, our 50-state analysis shows.

Without Social Security benefits, 41 percent of elderly Americans would have incomes below the official poverty line, all else being equal.  With Social Security, only 9 percent do.  (See graph.)

Social Security is also important for non-elderly adults and children.  (See table.)  It lifted more than 1 million children from poverty in 2015.  Some of these children receive benefits because a parent died, became disabled, or retired; others live with relatives who receive Social Security.  

Given the program’s powerful anti-poverty impact, cuts in Social Security benefits could significantly raise poverty — particularly among the elderly and the disabled — depending on their design.

Social Security benefits are already modest, both in dollar terms (the average retired worker receives $1,328 a month) and by international standards.  Also, elderly Americans depend heavily on their Social Security benefits — particularly women and minorities.  A third of beneficiaries receive at least 90 percent of their income from Social Security; 61 percent of beneficiaries receive more than 50 percent of their income from the program.

While policymakers should work to close Social Security’s long-term funding gap, they should remember that this program is a vital part of the safety net for Americans of all ages. 

 

TABLE 1
Effect of Social Security on Poverty, 2015
Age Group Percent in Poverty Number Lifted Out of Poverty By Social Security
  Excluding Social Security Including Social Security  
Children Under 18 21.2% 19.7% 1,078,000
Adults Ages 18-64 15.4% 12.4% 5,944,000
Elderly Age 65 And Over 40.5% 8.8% 15,067,000
Total, All Ages 20.5% 13.5% 22,090,000

Source: CBPP, based on data from the Census Bureau Current Population Survey, March 2016

 


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