C. Contemporary Issues

The SSA has undergone many changes in the years since the original bill was passed. These changes have attempted to correct the underlying racial tension the Act was founded upon. Some argue that the tensions of the past have been alleviated through these amendments while others proclaim that more sweeping changes need to be made. This section of the Note serves to highlight a few of the most critical changes in the SSA in the years since its original inception. In addition, it is also a goal of this Note to flesh out ways in which additional changes can be made to create a more balanced investment vehicle for African-American's while still maintaining the structure of the Act as envisioned in 1935. Finally, this section seeks to provide advice to African-Americans and others racial minorities who find themselves disadvantaged by the SSA on how to structure a retirement plan in light of the historical challenges faced by the longstanding racial animus built into the SSA.

In 1950, the Act extended to cover nearly all private employees, including farm workers and those involved in domestic work. The inclusion of these important groups left out by the original Act increased the number of total Americans covered by ten million people, bringing the total percentage of Americans covered by the SSA to ninety-three percent. Some scholars have argued that the changes in Social Security implemented in the 1950s did not do enough to resolve *504 the racial discrepancies of the past. These scholars argue that the reporting requirements for those working in African-American dominated industries were lenient, consequently negating the coverage for those occupations. Furthermore, Social Security benefits were still calculated by reported earnings in employment. Using a benefits structure that makes distributions based on earnings effectively incorporates a policy of social discrimination into the Act itself. This systematic discrimination has been best characterized as, “Congress incorporat[ing] the effects of ... discrimination against African-Americans into the very program designed to ameliorate the economic devastation caused by old age, disability, or early death of the wage earner.”

The effects of the Social Security benefits formula results in those who are low-income earners receiving benefit amounts that are completely different than those with higher incomes. Lawmakers have acknowledged that the distribution method is flawed and continues to perpetuate a system of discrimination. However, instead of altering or amending the Act to reflect a more racially neutral distribution policy, the legislature declared that “the ultimate remedies for such discrimination will come through the Congress, the courts, the schools, the job market, and the political forum.”

African-Americans did find a potential remedy in an amendment to the SSA that was made in an effort to alleviate some of the tension created in the disbursement of funds to women. Policy drafters acknowledge that the structure of the SSA created a level of inequity that

contributes to the differential distribution of financial security between women and men by affording much better financial security in old age to those who have successfully fulfilled traditional male breadwinner roles than to those who have fulfilled female roles. It thereby contributes to the subordination of individual women to individual men.

*505 The acknowledgment that the SSA created a system of inequity was rather surprising to many. Additionally, this acknowledgment, although not directly targeted at African-Americans, opened the door to challenging the distribution method. The discussion over women and work, “reveal[ed] tension between the goal of eliminating disincentives for women's participation in the workforce and that of protecting women in traditional homemaker roles.”

The distribution system disadvantaged women for a variety of reasons. Aside from favoring those men who have fulfilled traditional breadwinner roles over those women who have made the conscious decision to serve as home-makers, the bias in the distribution system can be placed into three broad categories.

First, a worker's primary benefits are linked to wages. Since women tend to earn lower wages than men, they also receive lower primary benefits. Second, the social security system does not directly take account of uncompensated housework (including child care) in calculating wages and benefits. To the extent that women substitute unpaid housework for paid work outside the home, their wages and benefits are correspondingly reduced. Finally, derivate benefits based on spousal status are ‘smaller and more contingent’ than primary benefits based on wages.

Additionally, the wage-based structure of the SSA further highlights the underprivileged station of women in the workforce. The issues with the SSA distribution policy mirrors the same issues faced by African-Americans. Many women's rights activists saw it as a welcomed relief when the legislature sought to amend the distribution policy to better account for the conflict that women face in terms of joining the workforce as opposed to maintaining traditional roles within the home. Although these changes provided some hope for many who advocated similar changes for African-Americans, these changes never occurred. In a series of constitutional challenges, the Supreme Court held changes in the distribution policy of the SSA unconstitutional under the Fourteenth Amendment.

*506 This Note seeks to primarily critique the flaws in the SSA past and present, in addition, to adding to the scholarship on racial and gender equality. It is difficult for any theoretical standard of equality to eliminate a bias favoring a group outside of the majority within the Social Security system. However, the inescapable deficiencies of a constitutional standard should not bind us to current inequalities but should serve to challenge us to understand the need for legislative change. In light of the shortcomings of the Social Security system, it is still imperative that African-Americans adequately prepare for retirement, understanding that they face a “diminished” return on their social security investment.