What is Social Security?
The fight to protect retirement security is not foreign to Steelworkers. We fight for it at the bargaining table, in our statehouses, and in the halls of congress. We know how important it is for all workers to be able to retire with dignity and respect.
Today a large piece of many retired Americans’ financial stability comes in the form of Social Security payments. In fact, according to the U.S. Census Bureau’s Survey of Income and Program Participation (SIPP), 49% of Americans aged 55 to 66 have no personal savings at all.
And, while many of today’s workers will one day find themselves in some way reliant upon this vital retirement program, most don’t have the time to sift through all the political rhetoric to truly understand what Social Security is, how it works, and why it is so important.
What is Social Security?
Social Security was created when President Roosevelt signed the Social Security Act as part of the New Deal.
In 1935, America was facing one of the worst economic catastrophes in its history, and Social Security was created to promote the economic security of our nation’s people.
It was designed to pay retired workers aged 65 and older a continuing income after retirement. Since its creation the program has also been expanded to include:
- 1939 - Survivors Insurance: For families of deceased workers.
- 1956 - Disability Insurance: For disabled workers and their families.
- 1965 - Medicare: Provides health insurance coverage to people 65 and older.
- 1972 - Supplemental Security Income: A needs based program that provides payments to people who are 65 or older with limited income or resources or are blind or disabled. Children with disabilities can also qualify.
How does Social Security work?
Social Security replaces a percentage of a worker's pre-retirement income based on your lifetime earnings. The amount of your average wages that Social Security retirement benefits replaces depends on your earnings and when you choose to start benefits.
Social Security is largely a “pay as you go” program, meaning today’s benefits are funded primarily by the payroll taxes collected from today’s workers.
In 2022, 65.8 million people received Social Security benefits and an estimated 180 million people had earnings covered by Social Security and paid payroll taxes.
In 2023, the average monthly retirement benefit is $1,827 for an individual. That’s $21,924 to live in America for millions of former workers.
While this program isn’t perfect, today the poverty rate for U.S. seniors is just under 9%. Without Social Security, the poverty rate for our seniors would jump to almost 41%.
Any cuts to this program would be devastating to millions of our nation’s most vulnerable.
Retirement Security is the number one issue that our members care about, according to our latest Your Union, Your Voice Survey.
Since our founding, the USW has fought to protect our pensions and retirement savings through contract negotiations and legislation. So, while some in Congress like to imply that workers’ reliance on Social Security in retirement is due to their own poor planning and saving, Steelworkers know better. Workers are not the problem!