Social Security in Alaska: A billion dollar benefit
December 1, 2017
FICA. Grrrrrr! Every time we get a paycheck most of us see the deduction for Social Security taken out of our earnings. It seems relentless and unfair, and to what end? It may be reasonable to think that because the one highly visible aspect of Social Security is the periodic deduction from the paycheck. But there is another story.
Social Security pays benefits to nearly 92,000 Alaskans. That’s about 1 of every 8 residents in the state. These are not just a random selection of Alaskans. These are often Alaskans who would be in desperate financial straits without Social Security. However, in most cases they are Alaskans who have paid into the plan all their working life and now they get to enjoy the income in their retirement.
Here is a curious fact. We Alaskans go crazy around PFD time. Buy this, buy that, take a trip, pay bills, whatever. In 2015 the Permanent Fund paid out $1.3 billion to hundreds of thousands of Alaskans. It was a big deal, but that is not the curious part. The curious part is that in the same year 92,000 Alaskans received Social Security benefits also totaling about $1.3 billion.
There were no cheap plane tickets, ebullient local news stories, or special sales at the local stores. There were just a lot of Alaskans getting needed benefits from their Social Security insurance program. It makes me think of that old-time comedian, Rodney Dangerfield: “I can’t get no respect.”
In 2015 the average Social Security benefit in Alaska was around $14,000. That’s not much if it is the sole or primary income for a family. Stretch every dollar “until the eagle screams,” as they used to say, and you will still be a great distance from the secure ranks of the middle class. Nevertheless, those modest Social Security payments lifted about 29,000 Alaskans out of poverty.
One in every three Alaskans age 65 or older would be living in desperate poverty if it were not for Social Security benefits. However, Social Security lifts 17,000 older Alaskans out of poverty. As a result the poverty rate among older Alaskans is 1 in 13 – much better, but still inexcusably high in my opinion.
Women in Alaska, especially older women, have obtained extremely important benefits from Social Security. In 2015 Social Security provided benefits to 41,000 Alaskan women, or 1 in every 18 women in our state. Of those, Social Security lifted 10,000 Alaska women age 65 or older out of poverty. Without Social Security, the poverty rate of elderly Alaskan women would have increased from 9 percent to 38 percent.
Social Security is best known for providing a modest but steady stream of income to retired workers. Here in Alaska, for example, Social Security provides benefits to over 62,000 retired Alaskan workers. The typical benefit received by a retired worker in Alaska is around $15,000. Interestingly, these retired Social Security beneficiaries represent only two-thirds of all Social Security beneficiaries in the state. At the other end of the age spectrum Social Security plays an important role in the financial security of Alaska’s children. Social Security is the primary life and disability insurance protection for an astonishing 98 percent of Alaska’s 186,000 children.
In addition, Social Security is the most important source of income for over 14,000 children living in Alaska’s “grandfamilies,” which are households headed by a grandparent or other relative. All told, Social Security provided benefits to nearly 9,000 Alaskan children in 2015, fully 10 percent of all Alaska beneficiaries.
Disabled Alaskans are another important group of persons who are not necessarily retired but who are given critical support by Social Security. Social Security provided modest disability benefits to nearly 13,000 Alaska workers in 2015, representing 1 in 7 Alaska beneficiaries.
Finally, Social Security is more important to rural Alaska than to urban Alaska. One in 7 rural Alaskans receive Social Security compared with 1 in 9 urban Alaskans. Social Security income in Alaska’s rural areas was $455 million, or 3.8 percent of total personal income. By comparison, Social Security personal income in the state’s cities and towns was $841 million, or 3 percent of total personal income.
Here in Alaska if we see people stranded by the side of the road in the winter, we stop to help them. Social Security helps 92,000 Alaskans–many “stranded” by poverty or disability–every moment of every day of every year. Rodney would be pleased if you gave this extraordinary program your full respect.
This is the second of a three-part series on Social Security. Part three will discuss the future of Social Security with special attention to facts and myths.
Lawrence Weiss is a UAA Professor of Public Health, Emeritus, creator of the UAA Master of Public Health program, and author of several books and numerous articles.