California Progress Report (CFED)
By: Paul Kleyman
August 9, 2011
In a dismal week when the most positive economic news for the United States was Friday's federal data showing anemic employment gains, the plight of ethnic elders looks "even worse than we thought it would be," according to Henoch Derbew, coauthor of a new report, "The Economic Crisis Facing Seniors of Color."
"While the recession has affected all American, the effects have been truly devastating for Latinos, African Americans and Asian Americans hoping to retire with some dignity," said Preeti Vissa, director of community reinvestment at the Greenlining Institute in Berkeley, Calif., which released the study Friday.
At a time when Congress and the president are considering cuts to Social Security, Medicare and Medicaid, she said the report shows that federal and state governments need to take steps to protect lower-income seniors and "to immediately take off the table any proposal that will plunge our most vulnerable elders into poverty."
Among the report's findings are that:
Even before the 2008 recession, a key study found that 91% of African American and Latino seniors are financially vulnerable, while overall figures showing lower poverty levels for older Asian Americans "mask hidden pockets of poverty," such as among Hmong, Korean or Cambodian seniors;
The Federal Poverty Line fails to consider factors, such as the high costs of health care, housing and transportation for seniors on fixed incomes;
Seniors of color have become increasingly reliant on Social Security as they have tapped out their modest savings and employer-based pensions have dwindled in the past 30 years to just over one-in-three African Americans and slightly more than one in five Latino workers.
The foreclosure crisis has disproportionately affected black and Latino families, draining over $213 billion in wealth from these communities--almost half of the losses to subprime borrowers nationally.
The disproportionately high levels of poverty and near poverty among ethnic seniors will be of growing concern nationally, because they will double by mid-century to four in ten seniors. In the Golden States alone, according to the report, "by roughly 2025, the majority of California's seniors will be people of color."
Because the federal poverty line, which is based on a half-century old formula, doesn't account for significant living costs for elders, the Greenlining report calls on state and federal governments to develop and use more accurate poverty-measurement tools, such as the Elder Economic Security Standard Index (the Elder Index) developed by the University of Massachusetts, Boston, and Wider Opportunities for Women.
When UCLA's Center for Health Policy Research applied the Elder Index to every California county (using 2006 census data), it found, for instance, that seniors in Oakland and other parts of Alameda County, needed $25,000 a year on average just to cover essential expenses - not the federal poverty figure of $10,210.
The report cites research showing, "The current financial vulnerability of seniors of color, both nationally and in California, has its roots in a longstanding racial and ethnic wealth and asset gap stemming from a variety of factors, including different initial wealth endowments and outright discrimination."
For example, data from the Corporation for Enterprise Development reveal that "median net worth for minorities in California was $51,000 in 2006, compared to $304,982 for whites." The report emphasizes, "These gaps are not going away; in fact, they are growing." Declining household wealth since the recession started will make retirement an even more difficult goal as ethnic boomers pass the milestone age of 65.
How to Close Income Gap
Among solutions to the widening income-security gap for ethnic elders, the reports recommends:
Protect the social safety-net program, such as Supplemental Security Income, food stamps and adult day health care centers from budget cuts, "which may bring heavy burdens for seniors, and often ultimately higher costs for state and federal governments";
Lift asset limits that currently force poor seniors to "spend down" their savings before they can participate in Medicaid, cash assistance or other programs, thus evaporating even small retirement savings;
Increase access to employer-matched and tax-deferred savings and pension plans for people of color and low-income groups, as well as special retirement accounts set up to help worker save automatically, regardless of whether their employers offer pensions;
Better protect senior's limited assets with stronger banking and lending regulations and consumer protections, such as curb the abusive practices of payday lenders, "which tend to cluster in communities of color."
The report notes, "California is home to large groups of immigrants from more than 60 nations, and no race or ethnic group constitutes a majority of the state's population."
The study's author's call for great efforts to develop cultural competency in healthcare and related services to provide diverse patients with high-quality care that is safe, equitable and focused on patients and their family caregivers.
"Currently, disparities pervade healthcare to the point that healthcare is fundamentally unequal," says the study. "For seniors of color, language and cultural barriers form distinct challenges for a population that often needs complex, intensive healthcare services; an adequate force of healthcare workers with appropriate language and cultural skills will be essential."
Paul Kleyman directs the Ethnic Elders Newsbeat at New America Media. He was editor of "Aging Today," newspaper of the American Society on Aging for 20 years, and he founded and heads the Journalists Network on Generations. This article first appeared on New America Media.