The Economic Impact of Social Security
[imgbelt img=SSCountyDependency528.jpg]The economic impact of Social Security is huge: $1.2 trillion in economic output and 8.4 million jobs. Social Security plays an even larger role in the economy of rural America.
[imgcontainer] [img:SSCountyDependency528.jpg] [source]Southern Rural Development Center
This map shows all rural (noncore) counties. Purple counties grew more dependent on Social Security payments in their local economies between 2000 and 2009. Green counties became less dependent. Click on the map to see a larger version.
If Social Security payments were reduced by only five percent, the nation’s economic output would decrease by $63 billion, 419,000 jobs would be lost and tax revenues would decrease by $7.8 billion.
Those figures reflect Social Security payments made in 2009 and come from a study we conducted to measure the role this program plays in the U.S. economy. The study was done at the Southern Rural Development Center at Mississippi State University. (To download data, maps and the technical report supporting this article, go here.)
Social Security is a massive program. A little over 51 million people received some kind of Social Security payment in 2009 — a disability benefit, a survivor benefit or a retirement check. This amounted to 16.7 percent of the total U.S. population. Even slight changes in this program can have tremendous effects in the nation.
Social Security plays a much larger role in rural America. In rural counties, 23.6 percent of the population receives a monthly Social Security check. In counties with small cities (under 50,000 population), 21.2 percent of the population in 2009 received Social Security benefits
Payments in 2009 were $675 billion — or 5.5 percent of total personal income in the U.S. Social Security payments in rural counties constituted 9.3% of total personal income in 2009.
In counties with small cities, the program accounted for 8.2 percent of total personal income. (Total personal income includes, wages, salaries, employer-provided health insurance, dividends, interest, Social Security benefits and other types of income.)
There are two things about this program we’d like to emphasize. First, the role Social Security plays in the local economy varies across the country — and its local impact is changing. Some states and counties are growing more dependent on Social Security while the proportion of Social Security payments is declining in other places.
Second, it is clear that Social Security supports a large proportion of the nation’s economic output and a great number of jobs.
To measure how dependent states and counties are on Social Security, we compiled an index. We included three factors: the percentage of total county population receiving Social Security; the percent of a county’s total personal income derived from Social Security; and the average per capita payment in a county (that is the total amount of Social Security received in a county divided by the total number of residents).
Using the Social Security dependency index, we compared states and counties in 2000 and 2009. Some states and counties grew more dependent on Social Security over this period. In other places, the impact of Social Security payments diminished during this time period. You can see these shifts in the map above.
The map above shows only rural (“noncore” according to federal terminology) and “micropolitan” counties (those with cities under 50,000 population). The white areas are urban counties.
Purple areas grew more dependent on Social Security Green counties became less dependent on Social Security from 2000 to 2009.
The ten counties nationally most dependent on Social Security payments are either rural or small city counties. Sumter County, Florida, a retirement county in the central part of the state, is the most dependent in the nation, followed by Alcona County, Michigan; Lewis County, Idaho; Roscommon County, Michigan; Hickory County, Missouri; Montmorency County, Michigan; Polk County, Texas; Iosco County, Michigan; Citrus County, Florida; and Sharp County, Arkansas.
We did the same dependency calculations with states. The results are seen in the map below. (Click on either map to see a larger version.) Dark blue states became more dependent on Social Security between 2000 and 2009 while light blue states became less dependent. White states remained the same.[imgcontainer] [img:SSDIMap528.jpg] [source]Southern Rural Development Center
Dark blue states grew more dependent on Social Security between 2000 and 2009. Light blue states grew less dependent. White states did not change.