Can a Two-Legged Stool Stand?

by Wilhelmina A. Leigh, Ph.D.
originally published in The Florida Courier

For today’s working adults, retirement is more likely to be based on the safety-net level of benefits from Social Security, supplemented with personal savings and investment.

The catch is, however, that too many African-Americans are saving too little for retirement.  The fact that 70 percent of African-American workers had saved less than $25,000 for retirement, according to a 2007 survey by the Employment Benefit Research Institute, suggests there will be little “gold” in our golden years.

The ‘stool’

Traditionally, retirement income has come from three sources – Social Security, employer pensions, and personal savings and investment –a three-legged stool.  The ongoing, gradual disappearance of employer-sponsored defined benefit pensions (that provide a monthly payout based on years worked and salary level) and their replacement by employer-sponsored defined contribution retirement plans (that provide retirement income based on the amount of employee contributions while working) suggests, however, that the retirement income stool will soon have only two legs.  One leg will be Social Security, and the other will be personal savings and investment – both through an employer and independent of employment.

Nearly two of every five African-Americans in a 2009 Joint Center poll indicated that they expected Social Security to be a major source of income during their retirement.  This expected major source of retirement income, however, provided average monthly retirement benefits at the end of 2009 of only $1,120 for African-American males and $960.50 for African-American females.  These monthly average benefits generate an annual income of $10,458 – slightly greater than the federal poverty threshold for persons 65 years and older.

Problems coming

Over the next 75 years, if no modifications are made to the Social Security program, payments will fall below their already modest levels.  Because FICA taxes paid into the Social Security system by workers in a given year are expended that same year to fulfill obligations to current beneficiaries, the retiring of the large Baby Boomers born between 1946 and 1964; increased life expectancy of the “older” old; and declining birth rates – threaten the solvency of Social Security.

Employer pensions and retirement plans do not look especially promising for African-Americans, who are more likely to be unemployed and underemployed than other racial/ethnic groups – a fact that has been unchanged for many decades.

When employed, African-Americans are hit hard by the shrinking availability of employer-sponsored retirement plans. Though more than half (56 percent) of Black workers ages 25-59 were offered retirement plans or pensions by their employers in 2009; less than half (45 percent) actually enrolled in them.  In addition, low-income earners – among whom African-Americans are overrepresented – are less likely than high-income earners to be offered employer retirement plans.

African-American workers constitute 20 percent of the low-income labor force –individuals whose earnings are less than the federal poverty level even though they are employed for 27 or more weeks per year – in contrast to the 11 percent they make up of the workforce at all income levels. Personal saving and investment independent of employment (for example, Individual Retirement Accounts) become the major source of income to supplement Social Security retirement benefits.

Income is critical

A key issue is having the disposable income to save.  A 2009 Joint Center poll found that 53 percent of African-Americans at all income levels – and 65 percent with income of $35,000 or less – wanted to save but did not have enough money to.  This same poll found that African-Americans are less likely than Whites to have invested in IRAs (28 percent vs. 47 percent), in stocks or mutual funds (27 percent vs. 49 percent), or in bonds (17 percent vs. 27 percent).

Raising our current retirement income status from only 30 percent who have saved $25,000 or more for their retirement should become a priority for African-Americans.  Otherwise, our definition of retirement may become confined to working either full-time or part-time until the day we die – or eking out an existence on Social Security benefits alone.

Wilhelmina A. Leigh is Senior Research Associate of the Economic Security Initiative of the Civic Engagement and Governance Institute at the Joint Center for Political and Economic Studies. More information on Dr. Leigh and her work can be found at the Joint Center website.

The Good and Bad: FDA’s Fast-Track Approval for Preterm Birth Prevention

by Jermane Bond, Ph.D.

In February, the U.S. Food and Drug Administration (FDA), through its accelerated approval regulations, approved and granted exclusivity to KV Pharmaceuticals to market Makena (17Alpha Hydroxyprogesterone Caproate).  The drug is also known as 17P, a synthetic hormone delivered by weekly intramuscular injection to slow the progression of pre-term birth (PTB) before 37 weeks of pregnancy, among pregnant women with at least one previous spontaneous PTB.  Although the drug is not for use for women with other risk factors for PTB or women pregnant with twins, it has been sold for years without approval.  Today, the drug just comes with a large price tag.

PTB is one of the leading causes of neonatal mortality in the United States.  Major risk factors for PTB include behavioral and demographic characteristics such as race/ethnicity, maternal age,  history of preterm delivery, stress, income, education, employment, housing, prenatal care utilization, smoking, alcohol consumption and marital status.  Already, the preterm birth rate is roughly 13 percent of live births, accounting for 500,000 infant deaths annually.

On March 14, 2011 the new 17P, Makena was officially brought to market, marking the first FDA approval of a drug for the prevention of PTB.  Subsequently, the prescription cost increased from $20 to $1500 per dose.  Recent studies support the use of progesterone supplementation for patients at risk for PTB.   The American College of Obstetricians and Gynecologists (ACOG) has promoted the use of 17P injections since 2003, following two successful randomized placebo-controlled trials.  Research has shown that approximately one-third of pregnant women receiving weekly 17P injections have had successful outcomes resulting in the prevention of PTB.  And in 2008, ACOG issued a Committee Opinion indicating that progesterone for the prevention of PTB should be offered to women with a history of spontaneous PTB.

Some obstetricians, maternal health and public health practitioners, including family planning advocates, are outraged at the dosage price increase for 17P and have spoken out and written letters to KV.  As a result, the St. Louis drug company has been criticized for increasing the price of Makena.  In April, the company announced that it would cut the price by more than half (in fact KV reduced the dosage price to $690 two days after the FDA publicly invited competition by announcing that it would continue to allow compounding pharmacies to make and sell a generic version of the drug).  Now, instead of a pregnancy costing $30,000, a much improved price of $13,800 will make the drug more accessible.

Jermane Bond, Ph.D. is Research Associate in the Health Policy Institute at the Joint Center for Political and Economic Studies. More information on Dr. Bond and his work can be found on the Joint Center website.

21st Century “Retirement 101”

by Wilhelmina A. Leigh, Ph.D.

It’s not your parents’ retirement—especially if your parents retired with a pension and a gold watch after 25 years on the job.  For today’s working adults, it’s more likely to be a retirement based on the safety-net-level of benefits from Social Security, supplemented with personal savings and investment.  The catch is, however, that too many African Americans are saving too little to be comfortable during their retirement years under this model.

Average monthly Social Security retirement benefits for African-American males ($1,120) and African-American females ($960.50) provide an annual income only modestly above the federal poverty threshold for persons 65 years and older ($10,458). The additional fact that 70 percent of African Americans have saved less than $25,000 for retirement suggests there will be little “gold” in our golden years.

Personal savings and investment can take place both via employer retirement plans and independent of employment.  Saving through employer pensions and retirement plans does not look especially promising for African-American workers, however, due to their chronic unemployment and underemployment and to the shrinking availability of employer retirement plans in general.  Only 59 percent of all workers and 56 percent of black workers ages 25-59 were offered employer retirement plans or pensions in 2009, with half or less (50 percent of all workers and 45 percent of black workers) who received offers actually enrolling in the available plans.

Thus, for many, saving and investing for retirement independent of employment (for example, in Individual Retirement Accounts, or IRAs) becomes the major source of funds to supplement Social Security retirement benefits.  A key issue for African Americans, though, is having disposable income to save.  A 2009 Joint Center poll found that 53 percent of African Americans at all income levels—and 65 percent with income of $35,000 or less— “wanted to save but did not have enough money to.”

Raising our current retirement income status from only 30 percent who have saved $25,000 or more for retirement should become a priority for African Americans.  Otherwise, our definition of retirement may become confined to working (either full-time or part-time) until the day we die, or eking out an existence on Social Security benefits alone.

Sources:

• Social Security retirement benefits of African-American males and females (December 2009)
• Federal poverty level (2010)
• Percent of African Americans saving for retirement (2007)
• Percent of African Americans offered pensions (2009)
• Joint Center poll (2009)

Wilhelmina A. Leigh is Senior Research Associate of the Economic Security Initiative of the Civic Engagement and Governance Institute at the Joint Center for Political and Economic Studies. More information on Dr. Leigh and her work can be found at the Joint Center website.

Health Benefits Anticipated from EPA’s Proposed “Utility Air Toxics Rule”

by Gina E. Wood and Leslie L. Simmons

Coal and oil-fired power plants release mercury, arsenic, other metals, acid gases, and particulates – all of which can harm people’s health. These pollutants are linked to cancer, IQ loss, heart disease, lung disease and premature death.

The U.S. Environmental Protection Agency (EPA) has taken steps to dramatically improve public health, the climate, and even the economy by proposing the Mercury and Utility Air Toxics Standards (Utility Air Toxics Rule). The proposed standards will reduce emissions of mercury, other toxic metals, hydrogen chloride and other acid gases, and organic air toxins like dioxin and furans – known human carcinogens. These standards are long overdue, and represent the first time that the EPA is requiring coal and oil-fired power plants to control their emissions of toxic air pollutants.

Recently, some opponents of the rule have gone so far as to claim that African Americans will be disproportionately impacted by its costs.  These claims are unsubstantiated and fly in the face of what we know:  that African Americans and other people of color are disproportionately harmed by air pollution where they live. None of the studies used to support claim of adverse economic impacts on African Americans actually evaluate the impacts of EPA’s regulations or policies, much less this specific regulation. Moreover, the statements of the groups opposing the EPA regulations fail to acknowledge the well-documented disproportionate impacts of dirty air and greenhouse gases on people of color.  EPA has conducted analyses for all of the greenhouse gas and clean air regulations it has promulgated, and its analyses demonstrate that the economic impacts are minimal.

The New Rule Will Reduce Toxic Air Pollution and Save Lives

Per the EPA’s Regulatory Impact Analysis, the proposed “Utility Air Toxics Rule” will dramatically reduce toxic air pollution from our nation’s power plants and deliver significant benefits that will:

• Reduce the risk of mercury damage to children’s developing brains, which results in IQ loss and diminished ability to learn.
• Protect Americans from cancer and other health risks caused by other toxic air pollutants.
• Save thousands of lives each year by reducing the amount of dangerous particulates across the country.  This includes neighborhoods near power plants and neighborhoods hundreds of miles away from the nearest power plant.
• Protect thousands of lakes and streams – and the fish that live there and the mammals and birds that eat them – from mercury and acid rain pollution.
• Provide employment for tens of thousands of American workers building, installing, and operating the equipment to reduce emissions of mercury, acid gases, and other toxic air pollutants.

Each year, the proposed rule would prevent serious health effects including 6,800-17,000 premature deaths, 11,000 heart attacks, 120,000 asthma attacks, and 850,000 missed work or “sick” days. Avoiding “sick days” saves companies and families money. It is particularly important for the millions of Americans whose jobs do not provide paid sick leave and who risk losing their jobs if they miss work too often. The proposed rule would also prevent 12,200 hospital admissions and emergency room visits, and 4,500 cases of chronic bronchitis each year.

While some in industry focus on the costs of this rule, any costs are far outweighed by the benefits. The value of the improvements to health alone total $59 billion to $140 billion each year.  This means that for every dollar spent to reduce this pollution, society would get $5-$13 in health benefits.

Be Heard!

The EPA will accept comments on the proposal until August 4, 2011. To learn how to submit a comment, see
http://www.epa.gov/lawsregs/getinvolved.html
. For more information about the Utility Air Toxics Rule, see
http://www.epa.gov/ttn/atw/utility/utilitypg.html
.

Source: EPA, “Reducing Toxic Pollution from Power Plants” Mar. 16, 2011.

Gina E. Wood is the Director of Policy and Planning and Deputy Director of the Health Policy Institute at the Joint Center for Political and Economic Studies. She also works closely with the Joint Center’s Climate Change Initiative. More information on Ms. Wood and her work can be found at the Joint Center website.

Medicaid: Why It’s Important

by Brian Smedley, Ph.D.

During one of the first opportunities that I had to present testimony at a Congressional hearing, a member of the committee posed a challenging question to me and other witnesses at our panel:  Would you trade your current health insurance for Medicaid?

The Congressman’s intent was clear:  he and others who oppose expansions of public health insurance programs believe that Medicaid is worse than private insurance, and possibly even worse than no insurance at all.

I was the first witness seated on the right of the panel, so I was to respond first.  I hesitated.  I didn’t want to reinforce the idea that Medicaid was deeply flawed.  Sure, the program has problems, but it remains one of the most efficient health insurance programs in the country and has been a lifeline for millions of low-income and disabled Americans.  But trade the insurance I had at the time?  I caved and answered no.  Almost all of the witnesses at our panel did the same.  But I’ve regretted it since.

Yesterday a landmark new study was released that, for the first time, documents the many ways in which Medicaid improves the health and well-being of its beneficiaries.  Researchers found that “expanding low-income adults’ access to Medicaid substantially increases health care use, reduces financial strain on covered individuals, and improves their self-reported health and well-being.”  The study was remarkable because for the first time researchers were able to compare outcomes for people who were randomly assigned to Medicaid against those who sought Medicaid coverage but could not receive it due to budget constraints.  (
http://www.hsph.harvard.edu/news/press-releases/2011-releases/medicaid-benefits-oregon-study.html
)

The implications of the study are clear:  efforts to slash Medicaid, such as those being debated in Congress, would increase risks for poor health and financial ruin for millions of children, elderly, and/or disabled people.  These are the very folks who are struggling the most in the current economy.  And given the high cost of poor health for our nation as a whole, these cuts are not only morally wrong but also put our economic recovery at risk.

Medicaid works.  Let’s spread the word.  I wish I had when I was given the chance to correct the record.

Brian Smedley, Ph.D., is Vice President and Director of the Health Policy Institute at the Joint Center for Political and Economic Studies. To learn more about Dr. Smedley and the Health Policy Institute, visit the Joint Center website.

Video Games and Children of Color: There is More than One Compelling Interest at Stake

by Joseph Miller, Esq.

The Supreme Court’s recent decision to strike down a California law banning the sale of violent video games to children was not surprising in light of the Court’s First Amendment doctrine or the Roberts court’s business-friendly stance on corporate speech.  For children of color, the need for data establishing a nexus between violent video games and real-world violence is even more compelling as children of color spend more time playing video games than white children.  In addition to seeking to address the effect of video game violence on children’s psyches, state legislators should also seek to address the impact of popular video games on academic achievement.

At first glance, it is difficult to conclude that the Court’s decision was based on ideology rather than the letter of the law: While the Roberts court has demonstrated a proclivity for protecting corporate and business interests (see, e.g. Wal-Mart v. Dukes, Citizens United v. Federal Election Commission, and AT&T Mobility v. Concepcion), Justice Scalia’s majority opinion in yesterday’s Brown v. Entertainment Merchants Association decision was actually joined by the two justices widely considered to be the Court’s most liberal—Justices Ginsburg and Sotomayor. Nevertheless, Chief Justice Roberts and Justice Alito issued concurring opinions that can be read as a refinement of their doctrine protecting corporate speech.

The majority analyzed California’s state law from a strict scrutiny point of view.  To pass Constitutional muster, state laws abridging fundamental rights, such as the right to free speech and freedom of expression, must address a compelling governmental interest and must be narrowly tailored via the least restrictive means for achieving that interest.  In the context of free speech, this means that the state law in question must be designed to prevent speech that harms the compelling interest at stake.  Here, the interest advanced by the State of California was to protect minors from violent content in video games.  However, the majority reasoned that the scientific studies presented by the State of California to justify the statute did not prove a direct connection between violent video games and the asserted harmful effects on children.  Writing for the majority, Justice Scalia further stated that the California law was not the least restrictive means that could have been advanced because it was “under inclusive” — while the California law restricted the speech of game developers,  it did not restrict violence in other media targeting children, such as children’s books and television shows.

Chief Justice Roberts and Justice Alito deliberately avoided the “broader” issue of strict scrutiny, choosing to focus instead on whether the California statute provided adequate notice to game developers as to the standards that determine which content is too violent and which is not.  Thus, not only must a state law even remotely abridging corporate speech meet the strict scrutiny standard of review, such laws must be so specific as to require legislators to put themselves in the shoes of corporate speakers trying to determine what kinds of speech are prohibited.

Such was the disposition of the majority opinion and the concurrence, neither of which were particularly surprising or groundbreaking.  The strict scrutiny test itself remains largely unchanged, and the notion that legislators must consider the First Amendment from the point of view of speakers other than individuals is a bedrock principle, especially in light of Citizens United—this decision simply solidifies it.

Still, we are left with considerable uncertainty as to whether violent video games actually harm children, and clearly this is a matter that requires further research.  This issue is particularly important for children of color.  Last month, Northwestern University released a study that found that, on average, white children spend the least amount of time per day playing video games (:56), compared to blacks (1:25), Hispanics (1:35), and Asian Americans (1:37).  Not only could violent video games potentially lead to real violence, more time spent playing video games necessarily means less time studying.  Additional research and evidence is needed that firmly establishes these links, so that states can make the case for restricting the sale of video games to minors.

Joseph Miller, Esq. is Deputy Director and Senior Policy Director for the Media and Technology Institute for the Joint Center for Political and Economic Studies.