This report discusses how President Obama’s proposal to base the Cost of Living Adjustment (COLA) for Social Security, veteran’s benefits and other retirement programs on the chained consumer price index (chained CPI) will widen income and wealth inequality seen among African Americans.
The Chained CPI: Increasing Economic Inequality for African Americans finds that COLA decreases resulting from the chained CPI will disproportionately harm African Americans who have dramatically fewer sources of wealth to draw upon compared to whites. Almost half of African American seniors rely on Social Security for more than 90 percent of income in retirement due to lower levels of educational attainment, employment, earnings, and ownership of family assets such as homes, investments, savings accounts, businesses and other opportunities to build assets over time that ensure financial security in post-working years.
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