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Social Security Keeps Skyrocketing Number of Kids Out of Poverty

Center for Global Policy Solutions report reveals Social Security as a crucial tool for reducing and preventing child poverty that benefits more than 6 million kids, double the number typically cited

Washington, D.C., July 12, 2016 — Social Security now benefits 6.4 million children according to “Overlooked But Not Forgotten: Social Security Lifts Millions More Children Out of Poverty,” a new study released today by the Center for Global Policy Solutions (CGPS) that found the growing number of child beneficiaries of the program has been underestimated.

The number of direct and indirect child beneficiaries jumped from 5.2 million in 2001 to 6.4 million in 2014. The study found that the growth is due almost entirely to the jump in children who are indirect beneficiaries because they live with extended family or in multigenerational households. This population grew from 2.1 million in 2001 to 3.2 million in 2014, while the number of direct child beneficiaries remained around 3 million during this period.

Two-thirds of indirect child beneficiaries live in households with more than two generations or that consist of grandparents and grandchildren only. According to the U.S. Census, the number of multigenerational households grew 70 percent overall from 1990 to 2010, to more than 5 million.

“Social Security’s role in keeping children out of poverty cannot be overstated,” said Dr. Maya Rockeymoore, founder, president and CEO of the Center for Global Policy Solutions. “It is the federal government’s largest non-discretionary antipoverty program for children and is especially critical for children of color, who are more likely to live in families with limited or no other sources of income. The growing number of children who rely on Social Security underscores the need to protect and expand this critical program—not slash it in the name of deficit reduction or tax reform.”

Overlooked But Not Forgotten analyzes data from the U.S. Census Bureau’s Current Population Survey and the Social Security Administration’s Annual Statistical Supplement. Key findings include:

  • The child poverty rate would increase by nearly 20 percentage points without Social Security benefits (both direct and indirect), from 25.5 percent currently to almost 43 percent—a difference of more than one million children.
  • For black children, the percentage in poverty would rise from 40 percent to almost 58 percent without any Social Security benefits.
  • Since 2007, the number of indirect child Social Security beneficiaries has grown among every racial and ethnic group, but the number of direct child beneficiaries who are white or black has actually decreased.
  • In households that identify as other than white, black or Latino (Asian-American families, for example), indirect child beneficiaries have grown from 116,000 in 2001 to 428,000 in 2014—the highest among all racial groups.
  • White children still represent the largest number of child beneficiaries, with over 1.6 million direct beneficiaries and almost 1.5 million indirect beneficiaries in 2014.
  • Direct and indirect child beneficiaries represent 9 percent of all U.S. children.

The report also highlights the life stories of a diverse range of people who were child beneficiaries of Social Security and tracks how the program helped them maintain or find stability despite the obstacles in their path. The report concludes with policy recommendations aimed at supporting this new and growing subset of Social Security beneficiaries.

Among the recommendations:

  • Increase Social Security benefits for those who need it most
    Increase revenues for Social Security by lifting the cap on taxable wages, compressing benefits for the highest-income individuals, increasing the amount employers and employees pay into Social Security by a small amount over a 20-year period, and bringing all state and local workers into the system. This would boost benefits for low-income and elderly individuals living in families with children.
  • Extend Social Security benefits to post-secondary students
    Reinstate Social Security benefits for young adults age 18-22 to encourage students to pursue higher education, which was particularly beneficial to students of color before the program was eliminated in 1981. Such a program is estimated to cost less than 1 percent of taxable payroll for 75 years.
  • Provide a structural unemployment credit
    Allow workers to claim a credit for up to half their average annual wage for up to five total service years. The credit would help alleviate the financial stress of part-time work on families, especially those with children receiving indirect Social Security benefits.

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Founded on the principle that a more inclusive nation is a stronger, more prosperous one, the Center for Global Policy Solutions is a 501(c)(3) that equips businesses and organizations with the tools to effect change, driving society toward equity. Drawing on our unique blend of policy and advocacy expertise, we develop strategies, research, programs, policies and communications that address disparities in health, education, and economic security by race/ethnicity, place, ethnicity, gender, and age.