Although women have made significant strides over the past several decades in leadership, labor-force participation, and educational advancement, they continue to face a disproportionate number of issues that impede their economic security. The most recent Census Bureau data show that the average woman working full time, year round earns 78 cents for every $1 earned by their male counterparts. Occupational differences, fewer work hours, interrupted employment histories, and the fact that women generally act as family caregivers largely drive this earnings gap. The lack of sensible workplace policies, such as paid family leave and paid sick days, further exacerbates the problem. Because the gender wage gap can lead to an estimated loss of more than $400,000 over the course of a 40-year career period, and because women tend to outlive their male counterparts, women are more susceptible to risks that often create economic insecurity in old age.
A gender gap in both earnings and access to private pension coverage means that, on average, women who have already reached retirement age have access to fewer resources than men. It should come as no surprise, then, that Social Security has played a key role in helping women and their families stay afloat. While men historically have been more likely to be insured through Social Security, women’s increasing labor-force participation has narrowed the gap considerably, particularly among younger workers. Nearly 90 percent of the population older than age 20—236 million individuals—were insured under the program in 2012, and about 61.9 million people received some type of benefit and assistance. In 2012, women made up 55 percent of adult beneficiaries as retirees, widows, disabled workers, and spouses of retirees and disabled workers.
Last Tuesday, the Senate Finance Committee held a full committee hearing to highlight Social Security’s importance as a key component of economic security and to call for strengthening the program for women. Here are five reasons why Social Security matters to women and working families.
1. Older women rely on Social Security more than older men in retirement. As America’s retirement savings shortfall looms, Social Security benefits are becoming an increasingly important component of retirement security—especially for women. According to the Social Security Administration, the median retirement income in 2012 for women ages 65 and older was $16,040, compared with $27,612 for men. Although women who are already retired are less likely to have their own pension, younger women in the workforce are almost as likely as men to participate in a pension plan. But even women with retirement savings are more likely to exhaust those funds due to lower lifetime earnings and longer lifespans. Because of these differences, women rely more heavily on Social Security for retirement income. Among women 65 years old and older in 2012, Social Security accounted for an average of 61 percent of their family income. Nearly 60 percent of this cohort relied on Social Security to cover at least half of their family income, and 30 percent on Social Security to cover 90 percent or more. Overall, in 2012, 56 percent of the 36.4 million beneficiaries aged 65 and older were women, as were roughly 67 percent of beneficiaries aged 85 and older.
2. Greater longevity creates increased financial stress among older women. On average, women outlive their male counterparts by nearly five years. This difference makes women more susceptible to risks such as an increased likelihood of outliving their savings and other sources of retirement income. Additionally, older women are more likely to face poverty and to have a higher risk of chronic illness and severe disability. These risks put a greater financial burden on women as they age.
3. Women benefit more from spousal and survivorship benefits. In 2012, more than 6 million people received some type of Social Security benefit as a spouse or surviving family member of a deceased worker. These benefits are especially important to women, as wives typically earn less than their husbands and are more likely to outlive their partners. Spousal and survivorship benefits tend to be more generous for wives because of differences in the lifetime earnings of women and men, resulting in an average spousal benefit for women that is nearly one-third higher than that for men.
4. Social Security Disability Insurance helps women and working families stay afloat. Social Security Disability Insurance helps families stay afloat when a family member experiences a life-changing disability and is no longer able to contribute to the family’s economic security. As women have increasingly become breadwinners themselves, this component of Social Security has become a crucial lifeline for working families. Because of the rise in female labor-force participation, women are now approaching parity with men both in terms of insured status and in terms of benefit recipiency. As recently as 1990, men outnumbered women by a 2-to-1 ratio in the receipt of disabled worker benefits; today, women make up nearly 48 percent of disabled worker beneficiaries. Moreover, disability insurance also provides benefits to more than 2 million spouses and children of disabled workers.
5. Social Security is a leader in the fight against senior poverty—especially among older women. Older women are one of the most vulnerable populations and are at greater risk of poverty than older men. In 2012, the poverty rate for women ages 65 and older stood at 11 percent; this means that almost 2.6 million older women were living in poverty. Overall, Social Security keeps 22 million Americans from falling into poverty. Of those 22 million, 15.3 million are elderly Americans, and 9 million of these Americans are elderly women. In addition to Old Age and Survivors Insurance and disability insurance, older women benefit greatly from Social Security’s Supplemental Security Income, or SSI, program. Elderly women make up almost two-thirds of SSI beneficiaries. Without the Social Security program, almost half of all elderly women would fall at or below the federal poverty line.
Social Security was developed as a protection plan—one that could help workers and their families when a breadwinner is no longer able to work because of age, illness, disability, or death. It provides a lifeline for millions of women, and now is the time to strengthen and modernize Social Security, bringing it in line with the evolution of the labor force and with the nation’s shifting household dynamics.
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