How COVID-19 deaths impacted Social Security

Summary

Marketplace Morning Report: How COVID-19 Deaths Impacted Social Security

Release Date: February 19, 2025

In this episode of the Marketplace Morning Report, host David Brancaccio delves into the intricate relationship between the COVID-19 pandemic and the Social Security system. Additionally, the report examines the National Association for the Advancement of Colored People (NAACP)'s recent initiatives targeting businesses that have rolled back their Diversity, Equity, and Inclusion (DEI) programs under President Trump's administration. This summary encapsulates the key discussions, insights, and conclusions from the episode, enriched with notable quotes and proper attributions.

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COVID-19's Unintended Boost to Social Security

Understanding the Impact

David Brancaccio introduces a compelling study from the National Bureau of Economic Research, which reveals that the COVID-19 pandemic inadvertently strengthened the Social Security system. The study found that the premature deaths of approximately 1.3 million people during the pandemic resulted in $205 billion being added to Social Security funds.

Excess Deaths and Social Security Contributions

Hanka Hayon Johnson from the University of Southern California emphasizes the alarming nature of these findings. At [02:02], she states:

"The early days of the COVID pandemic were really scary and for good reason."

This sentiment underscores the severity of the pandemic's early impact. Gopisha Goda of the Brookings Institution elaborates on the statistics:

"There were 1.7 million excess deaths during the pandemic" [02:11].

Mechanics of the Boost

Many of the deceased were over 65 and receiving retirement benefits. As Daniel Ackerman explains [02:14]:

"They paid in but stopped collecting when they died and those uncollected funds added up."

This cessation of benefit distributions due to untimely deaths led to the accumulation of additional funds within the Social Security system.

Historical Context and Comparisons

Gopisha Goda draws parallels to previous public health crises, mentioning an older study on how smoking-related premature deaths also reduced Social Security costs:

"There is actually an old study about how smoking affects Social Security. Increased rates of smoking reduce the cost to the program because there are premature deaths associated with smoking." [02:42]

Long-Term Implications

While the $205 billion surge is substantial, Daniel Ackerman provides perspective on its longevity:

"The $205 billion boost to Social Security won't change much in the long term." [03:16]

He further notes that the government disburses this amount in benefits every few months, highlighting the transient nature of the financial impact.

Broader Economic Effects of the Pandemic

Beyond the immediate boost from excess deaths, the pandemic's impact on labor force participation also influenced Social Security. Gopisha Goda points out:

"The labor force participation rate directly influences the payroll taxes that are going into Social Security as well." [03:08]

This decline, partly due to long COVID cases causing workforce drop-offs, has multifaceted effects on the system's sustainability.

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NAACP's Pushback Against DEI Rollbacks

Contextual Backdrop

In the wake of President Trump's initiative to dismantle DEI programs within the federal government and the private sector, the NAACP has emerged as a vocal opponent. David Brancaccio outlines the situation [06:51], noting:

"President Trump's push to end inclusion, fairness and diversity programs inside and outside of the federal government has been met with wide-ranging cooperation from the private sector."

NAACP's Strategic Response

Keisha Bross, Director of Opportunity, Race and Justice at the NAACP, discusses the organization's recent endeavors [07:14]:

"The NAACP issued a black consumer advisory over the weekend calling for accountability for the businesses that have rolled back their DEI initiatives and encouraging black consumers to prioritize shopping in places that are sticking to them."

Economic Clout of Black Consumers

Highlighting the significant influence of the target demographic, Daniel Ackerman states [07:29]:

"Black consumers have $1.8 trillion of spending power."

Consumer Behavior and Moral Alignment

A pivotal moment in the discussion arises from findings presented by a Harris Poll. John Gerzema, CEO of Harris, reveals that a substantial portion of consumers are altering their spending habits to reflect their moral beliefs [08:33]:

"66% of black consumers, 65% of black women, and even 69% of under 35 black consumers are shifting their spending to align with their moral views."

Avoiding Boycotts in a Complex Economy

While the NAACP urges intentional spending, Keisha Bross acknowledges economic constraints faced by many:

"The realities of the economy make it hard for people to avoid some companies altogether." [07:47]

Thus, instead of outright boycotts, the focus is on intentional support for companies maintaining DEI commitments.

Long-Term Consequences for Businesses

Americus Reed II, a marketing professor at the Wharton School, provides insight into the potential long-term impacts on businesses [09:01]:

"Things like boycotts are going to be one of the results that I think are going to shake out with respect to those companies that are actually going."

Furthermore, Gopisha Goda adds:

"Pay a long-term price for that with respect to your the credibility and authenticity of your brand." [09:22]

This underscores the enduring repercussions businesses may face if they retract their DEI initiatives, affecting their brand credibility and consumer trust.

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Additional Highlights

Government Workforce and Legal Challenges

Briefly, the episode touches upon job terminations at the Centers for Disease Control and Prevention (CDC), where David Brancaccio reports [03:28]:

"About 750 workers at the Centers for Disease Control got job termination letters over the weekend, about half the 10% layoff initially expected."

Additionally, a lawsuit involving DOGE (Direction Organizing Government Employees) is discussed, where consumer and union groups are challenging the IRS and Treasury Department's attempts to access taxpayer information [04:08].

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Conclusion

The episode of Marketplace Morning Report provides a nuanced exploration of how unforeseen factors like the COVID-19 pandemic can have both direct and indirect effects on major economic systems such as Social Security. Simultaneously, it sheds light on the powerful role of consumer behavior in shaping corporate responsibility towards DEI initiatives. Through expert insights and comprehensive analysis, listeners gain a deeper understanding of the complex interplay between public health crises, economic policies, and societal values.

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Notable Quotes:

• Hanka Hayon Johnson [02:02]: "The early days of the COVID pandemic were really scary and for good reason."

• Gopisha Goda [02:11]: "There were 1.7 million excess deaths during the pandemic."

• Daniel Ackerman [03:16]: "The $205 billion boost to Social Security won't change much in the long term."

• Keisha Bross [07:14]: "The NAACP issued a black consumer advisory over the weekend calling for accountability for the businesses that have rolled back their DEI initiatives and encouraging black consumers to prioritize shopping in places that are sticking to them."

• John Gerzema: "66% of black consumers, 65% of black women, and even 69% of under 35 black consumers are shifting their spending to align with their moral views."

• Americus Reed II [09:01]: "Things like boycotts are going to be one of the results that I think are going to shake out with respect to those companies that are actually going."

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This comprehensive summary ensures that even those who haven't listened to the episode can grasp the critical discussions and insights presented, structured in a clear and engaging manner.

Transcript

[Daniel Ackerman]

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[Keisha Bross]

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[David Brancaccio]

The strange relationship between the Social Security system and the 1�3 million people dying from the pandemic I'm David Brancaccio. We've often explored the perverse fact that disasters can contribute to economic growth even as they destroy security and well being. Well, today a new study that finds the horrors of COVID led to the early deaths of so many people that the Social Security system got a bit stronger. The National Bureau of Economic Research details how the Social Security account added $205 billion. Because this is so grim, so many people died who would have normally gotten check. Marketplace's Daniel Ackerman has details.

[Daniel Ackerman]

The early days of the COVID pandemic were really scary and for good reason, says Hanka Hayon Johnson at the University of Southern California.

[David Brancaccio]

So we had a lot of excess deaths.

[Gopisha Goda]

There were 1.7 million excess deaths during the pandemic.

[Daniel Ackerman]

Hayon Johnson co authored the study and she says many of those deaths were people who were older than 65 and.

[Gopisha Goda]

Were drawing retirement benefits or were going.

[David Brancaccio]

To withdraw retirement benefits and they had.

[Gopisha Goda]

Already paid into the system.

[Daniel Ackerman]

They paid in but stopped collecting when they died and those uncollected funds added up. Gopisha Goda is with the Brookings Institution and she says this isn't the first time a public health crisis has left an economic mark on the social safety net.

[Gopisha Goda]

There is actually an old study about how smoking affects Social Security. Increased rates of smoking reduce the cost to the program because there are premature deaths associated with smoking.

[Daniel Ackerman]

While the COVID study looked specifically at excess deaths, the pandemic impacted Social Security in other ways, too. Goda says many people with long Covid drop out of the workforce.

[Gopisha Goda]

The labor force participation rate directly influences the payroll taxes that are going into Social Security as well.

[Daniel Ackerman]

Overall, Gota says the $205 billion boost to Social Security won't change much in the long term. The government pays that amount in benefits every couple months. I'm Daniel Ackerman for Marketplace.

[David Brancaccio]

About 750 workers at the Centers for Disease Control got job termination letters over the weekend, about half the 10% layoff initially expected. And the Washington Post is reporting that the administration is reversing its plan to shut down the government program that gets free Covid tests to people and would have destroyed millions of test kits. The advisory committee looking for government waste is facing a new court challenge. A coalition of consumer and union groups is suing the IRS and the Treasury Department. The suit is trying to keep DOGE people endorsed by the Trump administration out of America's tax returns. Marketplace's Nancy Marshall Genzer has that.

[Gopisha Goda]

The lawsuit says Elon Musk and Doge, the government commission formed to slash spending and the federal workforce, are trying to access highly sensitive taxpayer information at the irs. The lawsuit says that data is protected by laws like the Tax Reform act and the Privacy act. And DOGE is breaking the law by trying to access the information, which includes taxpayers, Social Security numbers, net worth income and bank accounts. The plaintiffs include the center for Taxpayer Rights, the Main street alliance and the Communication Workers of America. Their lawsuit says Musk would have access to his business competitors tax records, along with information about any IRS investigations or reports on things like tax fraud. The Treasury Department hasn't responded to a request for comment, but Treasury Secretary Scott Besant told Fox News there are, quote, strict guardrails around what Doge employees are allowed to see at the irs. I'm Nancy Marshall Genser for Marketplace.

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[David Brancaccio]

President Trump's push to end inclusion, fairness and diversity programs inside and outside of the federal government has been met with wide ranging cooperation from the private sector. Now the NAACP is calling out some of those businesses and asking particularly black consumers to take their purchasing power elsewhere. Marketplace's senior Washington correspondent Kimberly Adams has.

[Keisha Bross]

That the NAACP issued a black consumer advisory over the weekend calling for accountability for the businesses that have rolled back their DEI initiatives and encouraging black consumers to prioritize shopping in places that are sticking to them.

[Daniel Ackerman]

Black consumers have $1.8 trillion of spending power.

[Keisha Bross]

Keisha Bross is director of Opportunity, Race and Justice at naacp. She says the organization is researching and building resources for consumers to track. Companies stand so what we're saying is.

[Daniel Ackerman]

You have a choice that you can make in how you choose to use your dollars.

[Keisha Bross]

While the NAACP is calling out companies like Meta, Walmart and McDonald's, Bras says the realities of the economy make it hard for people to avoid some companies altogether. So rather than calling for boycotts, the group wants shoppers to be intentional, which many already are, according to a recent survey from the Harris Poll, which found consumers of all political stripes are already changing their shopping behaviors.

[Daniel Ackerman]

It seems there is a group of consumers that are sort of breaking up with the economy. You know, 43% of them have shifted their spending in the past few months to align with their moral views.

[Keisha Bross]

John Gerzema is CEO of the Harris.

[Daniel Ackerman]

Poll that goes up to 66% of black consumers, 65% of black women, and even 69% of under 35 black consumers.

[Keisha Bross]

Some shoppers are boycotting stores and products that don't align with their political views, but others are going out of their way to support the companies that do a boycott. Americus Reed II is a marketing professor at the Wharton School.

[Gopisha Goda]

Things like boycotts are going to be one of the results that I think are going to shake out with respect to those companies that are actually going.

[Kimberly Adams]

To remain true to what they claim.

[Keisha Bross]

They were in the first place, reid predicts. We are at the beginning of a larger movement where consumers demonstrate with their wallets that when companies move away from their DEI commitments, then you're going to.

[Gopisha Goda]

Pay a long term price for that with respect to your the credibility and authenticity of your brand.

[Keisha Bross]

Of course, many of these same companies are facing similar pressure to drop DEI efforts and have to decide which backlash will cost them more. In Washington, I'm Kimberly Adams for Marketplace.

[David Brancaccio]

And I'm David Brancaccio. It's the Marketplace Morning Report from APM American Public Media.

[Kimberly Adams]

This economy can be complicated. That's why the Marketplace newsletter makes understanding it all simple.

[Gopisha Goda]

Get smart takes on the week's biggest.

[Kimberly Adams]

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