Social Security and the Changing Economic Role of Women

Transcription

1 Social Security and the Changing Economic Role of Women Heidi Hartmann, Ph.D. President, Institute for Women s Policy Research Research Professor of Women s Studies and Public Policy, The George Washington University Co-Editor, Journal of Women, Politics & Policy

2 IWPR Mission Statement The Institute for Women's Policy Research conducts rigorous research and disseminates its findings to address the needs of women, promote public dialogue, and strengthen families, communities, and societies.

3 Women s Contribution to the Economy Two Halves of Women s Lives Work for Pay Family Care

4 The Care Economy Women are following care work out of the home into the marketplace. AND Women continue to do the majority of care work still done at home.

5 This Conference Looks at care work, child care, health care, elder care, and women s retirement because Achieving Equity for Women requires both Improving Pay and Opportunities in the Labor Market AND Improving care work and the ability of women (and men) to manage both work and family

6 Percent Women are voting with their feet and moving into paid employment. Labor Force Participation for Women and Men Aged 16 and Over 1978 to Source: US Department of Labor Bureau of Labor Statistics Year Men Women

7 Labor Force Participation (%) Each cohort of women works more than the one before. Trends in Labor Force Participation Rates for Women, Age (Years) Source: Social Security Administration 1993; US Department of Labor, Bureau of Labor Statistics 2007a

8 Median Annual Earnings ($ 2007) Women s and men s Pay is becoming more equal Median Annual Earnings for Full-Time, Full-Year Women and Men Workers (in 2007 dollars), $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $ Note: For men and women aged 15 and older. Source: U.S. Census Bureau. Historical Income Tables. Women Men

9 But, it is not there yet. The wage gap grows with age. Median Annual Earnings ($) $60,000 The Gender Wage Gap Across the Lifecycle, 2007 (for Women and Men Employed Full-Time, Year-Round) $50,000 $50,048 $51,115 $51,926 $45,340 $40,000 $38,926 $30,000 $33,053 $36,519 $37,299 $37,042 $31,517 Women Men $23,174 $20,000 $22,075 $10,000 $ to to to to Age Source: US Census Bureau 2008

10 Boomers worked more than their moms, married less. Boomer women worked twice as much as their moms. Got more education, earned more. Married less, divorced more, had fewer children, had children outside of marriage.

11 NEVER MARRIED MARRIED ONCE&STILL REMARRIED&STILL EVER DIVORCED EVER WIDOWED PERCENT IN MARITAL GROUP Non-marriage is especially high for Black women. Figure 5: Marital Status by Race, women WHITE NONHISPANIC HISPANIC BLACK Source: Holden, Karen and Angela Fontes Economic Security in Retirement: How Changes in Employment and Marriage Have Altered Retirement-related Economic Risks for Women. Journal of Women, Politics, & Policy 30(2/3).

12 Women are much more likely to be alone in old age then men. Population of Married and Unmarried Women and Men, 2000 (Aged 85 and Older) Women Men Unmarried 85% (2,383,491,000) Married 19% (573,694,000) Unmarried 44% (525,875,000) Married 56% (677,501,000) Source: US Census Bureau 2002

13 How does Social Security, our near-universal retirement system take care of older women? Positive Aspects: Covers everyone who worked at least 10 years at $4,360 per year. Provides benefits to wives whether they worked for pay or not, former wives (provided they had a ten-year marriage), and widows. Fully adjusted for inflation (especially important for long-lived women). Returns more to lower earning than higher earning workers (redistributive).

14 Some Disadvantages for Women in Social Security Based on 35 years of earnings; non-earning years are averaged in as zeroes. Unmarried women who did caregiving have no access to spousal benefits. There are no benefits for caregiving outside of marriage.

15 Disadvantages, cont d. A married, retired worker must choose between own benefit and spousal benefit. Since the typical woman earns 38% of what the typical man earns over a lifetime, these 2 benefits come out about the same and the typical working wife who paid into the system gets no additional benefits compared with the homemaker. She is dually entitled, but her benefits don t increase.

16 Percentage Women s eligibility as workers has remained the same for 50 years. Because more women work, more are dually entitled; fewer women are eligible solely because of marriage. 100% Women's Entitlement Status, (All women aged 62 and older, December 2007) 90% 80% 70% 30% 60% 50% 40% 30% 57% 4% 39% 30% 40% 20% 10% Dependents Only Dually Entitled Workers Only 0% Source: Social Security Administration 2007 Year

17 Women continue to experience retirement insecurity. Women are working more, but their share of Social Security benefits is not increasing. Older women s poverty may increase as nonmarriage increases. Women s increased work may NOT compensate for their decreased marriage and reduced access to men s income.

18 Potential Solutions for Improving Social Security for Women Higher minimum benefits for low-income women (decrease poverty). EITC-type tax credit for older workers à la Canada (decrease poverty). Treat dual-earners better (increase equity). Develop a caregiving credit for Social Security (reduce poverty and increase equity).

19 What a Caregiving Credit Could Look Like Provide an earnings credit for every year with a child under 6 (available to both parents and/or nonmarried partners) Example: Parents of young children would receive an earnings credit of at least $15,000 per year even if they earned nothing. Reward work effort so that earners have somewhat more $ on their record than nonearners. Earnings Credit $0 $15,000 $7,500 $20,000 $10,000 $21,500 $15,000 $22,500 $20,000 $23,000 $30,000 $30,000

20 We need to improve Social Security for Women to: Account for women s increased work effort Account for caregiving outside marriage and new family structures Increase benefits for vulnerable women who live alone Strengthen Social Security and increase benefits for women, not cut back on Social Security just as economic insecurity is increasing.