Happy Anniversary Social Security!

By Renato Rocha, Policy Analyst, Economic Policy, UnidosUS

Today we celebrate the 82nd anniversary of Social Security––one of the most successful antipoverty programs in our nation’s history. Signed into law on August 14, 1935, the Social Security Act established financial protection for American workers, today offering retirement, disability, and survivor benefits to more than 60 million people.

Social Security benefits are especially important for the Latino community. In 2015 alone, income from Social Security kept 2.8 million Latinos out of poverty. This importance is even more pronounced when examining the strong anti-poverty effect of Social Security on the oldest and youngest beneficiaries from our community:

  • More than half of elderly Latinos would be poor without Social Security. Social Security benefits lift 1.2 million elderly Latinos out of poverty. With Social Security benefits, 24% of elderly Latinos have incomes below the poverty threshold. The number of Latinos ages 65 and older living in poverty would rise to over half, at 57%, without this income.

Social Security Significantly Cuts Poverty Among Latino Seniors

Source: UnidosUS analysis of 2016 data from Census Bureau’s Current Population Survey, Annual Social and Economic Supplement & Supplemental Poverty Measure public use file.

  • Social Security lifted an estimated 372,000 Latino children out of poverty. Without Social Security benefits, the Latino child poverty rate would have been two percentage points higher at 26% in 2015. Latino children accounted for nearly one in four children lifted out of poverty by Social Security.

Social Security's Anti-Poverty Effect on Children, 2015

Source: UnidosUS analysis of 2016 data from Census Bureau’s Current Population Survey, Annual Social and Economic Supplement & Supplemental Poverty Measure public use file.

Given the importance of Social Security for elderly Latinos, as well as for Latino children and their families, it is no surprise that a 2016 UnidosUS poll found that Social Security’s future is a top concern for Latino voters. Seventy-three percent of Latino voters said they were worried that Social Security will not be around when they retire. Latino millennial voters (18-35 years old) are particularly concerned: 87% of millennial voters worry about the longevity of the program.

Many Latino households have seen first-hand the importance of Social Security benefits for the community––most Latino retirees (52%) rely on Social Security for at least 90% of their income, compared to 32% of White retirees. Social Security has become critical to Hispanic economic security for a number of factors: Latino workers receive lower lifetime earnings, have higher rates of disability, and are less likely to work for an employer that offers an employer-sponsored retirement plan. To illustrate the latter point, 62% of Latinos work for an employer that does not offer a retirement plan, compared to just 37% of Whites who do not have access to an employer-sponsored retirement plan. Saving through an employer plan is an effective means of saving for retirement, but many Latino workers do not have access to this opportunity.

In an effort to improve the retirement readiness of our nation’s working families, cities and states have begun to pursue their own retirement plans that workers can access regardless of where they are employed. Such efforts to expand retirement saving opportunities should be protected and make sense for the millions of workers who do not have access to an employer-sponsored retirement account. Opportunities to save for a secure retirement are few and far between, especially for many American households who continue to live paycheck to paycheck. As we celebrate its 82nd anniversary, Social Security now more than ever is a critical pillar in our nation’s social safety net.

Saving Money While Building Credit with eMoneyPool

By Sabrina Terry, Senior Strategist, Economic Policy Project, UnidosUS

Photo: Got Credit.com

Building credit is an essential part of economic security for any American, but especially low-income Latinos and immigrant families. Latinos, like other communities of color, have historically been shut out of credit-building opportunities and continue to face several obstacles.

Latinos’ financial background make it difficult for them to acquire credit through traditional financial institutions. Per the Consumer Financial Protection Bureau (CFPB), Hispanics are more likely to be “credit invisible” than their White counterparts, and have some of the highest rates of un-scored credit records. These challenges are exacerbated for Latino immigrants who must also overcome language, proof of income, and legal status barriers when navigating the U.S financial system. Despite their economic hardship, Latinos are avid savers and prefer to take a savings-based approach to financial challenges. Yet, savings alone will not help them bridge the gap between their earnings and their expenses or to take advantage of economic opportunities—they also need access to credit.

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Happy Sixth Birthday, CFPB!

By Renato Rocha, Policy Analyst, Economic Policy, UnidosUS

Today, UnidosUS joins the consumer advocacy community as we celebrate the sixth anniversary of the Consumer Financial Protection Bureau (CFPB). The crippling effects of the financial crisis led to the creation of the CFPB, which we view to be one of the most important accomplishments of Wall Street reform. Six years ago, we made the argument that consumer protection is a civil rights issue––and we feel the same way today.

Since opening its doors, the CFPB has already curbed several unfair and deceptive practices in the financial marketplace. Over these last six years, the CFPB brought transparency to the remittance industry, stopped credit card companies from adding on products that consumers never agreed to, and required mortgage lenders to ask applicants for proof of their income before making home loans to ensure that homeowners can afford them. Just last week, the CFPB issued an important final rule that restricts forced arbitration, giving consumers a way to unite and hold corporations accountable for systemic misconduct. And we are waiting for the issuing of the final rule on payday loans, which will help curb the predatory lending that drains wealth from our communities.

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CFPB’s New Consumer Protection: Restrict Forced Arbitration

By Renato Rocha, Policy Analyst, Economic Policy, UnidosUS

The same week we announced our new name—UnidosUS—the Consumer Financial Protection Bureau (CFPB) issued a final rule that prohibits financial contracts from having forced arbitration clauses with class action bans. In effect, the new rule restores the right of consumers to come together in court by prohibiting class action bans, giving consumers a way to unite and hold corporations accountable for systemic misconduct.

Forced arbitration is a rigged system. Often, forced arbitration requires consumers to take a dispute to a private arbitrator chosen by the company, rather than exercise their right to have their complaint heard before a court. Given the association between the company and the arbitrator, forced arbitration causes considerable unfairness to consumers.

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Latinos Looking for a Place to Call Home: How Hard Will it Be?

By Agatha So, Policy Analyst, Economic Policy Project

Photo: American Advisors Group

Ten years after one of the worst financial crises in history, our nation’s economy is recovering, and the housing market is finally getting back to “normal”, according to the Harvard Joint Center for Housing Studies’s (Harvard JCHS) State of the Nation’s Housing Report. Yet, for many Americans, especially communities of color and low-income households, the recovery has yet to trickle down into their neighborhoods. Latino families, who were hit hard by the foreclosure crisis, are just now recovering some of what they had lost nearly a decade ago.

In a national poll of Latino voters, an overwhelming majority of respondents said that they would like to own a home. However, these voters were split on whether they thought they could find affordable housing in the neighborhood where they would want to live. Forty percent of voters reported they would be able to find an affordable place to live and in a location where they want to live, and 9 percent said they had already found that place. On the other hand, 47 percent of voters reported that they don’t think it would be possible to find an affordable place to live and in the neighborhood where they would want to live.

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