UNCOMMON SENSE 22 © February 1998

By the National Council of Women’s Organizations.
Reprinted with permission from the Institute for Women’s Policy Research.
The statement was at http://www.iwpr.org/ssheart.html

The National Jobs for All Coalition works for enough living wage jobs for everyone who wants to work, and adequate, secure income support for others such as the elderly, the disabled, and persons caring for very young or infirm family members. Social Security provides a measure of basic income security for most workers and their families, and keeps millions out of poverty. Despite the widespread misconception, there is no impending crisis of Social Security nor must it be drastically altered to be “saved”. And good jobs for all would contribute mightily to the health of Social Security because more people working means more Social Security taxes flowing into the Trust Funds. The Coalition’s Social Security packet aims to insure that workers, advocates, policy makers, and the media are better informed about these issues. In this Uncommon Sense, the National Council of Women’s Organizations, made up of leaders of more than 100 organizations representing more than 6 million women, stresses the special significance of Social Security to women, and warns that privatization and some other proposals could impoverish millions. 

Social Security is a woman’s issue. Since its inception in 1935, Social Security has often been the only income source keeping women from living out their days in poverty. Today while women’s lives have changed, they are still over-represented in the lowest wage jobs and earn only 74 percent of what men earn. Women leave the labor force for an average of 15 percent of their working careers, primarily to fulfill responsibilities as caregivers to their children, spouses, or elderly family members. And, in addition, they live an average of seven years longer than their male counterparts. 

Social Security has worked for women because it is a program where every worker pays in, and every retired worker receives a benefit she can count on every month for her entire life, with the added comfort of knowing that benefit will be increased regularly to meet inflation. 

Women also greatly benefit because lower earning workers receive a larger proportion of their earnings in benefits than those who earn more. In addition, many women also receive spousal and survivor benefits based on their husband’s (or former husband’s) earnings record. These benefits protect many retired wives, widows, and divorced women from poverty. Retired workers’ minor children also receive benefits. 

The Social Security system also provides life and disability insurance that protects workers and their families. Disabled workers receive benefits and children (and the parent who takes care of them) receive benefits when a working parent dies prematurely or becomes disabled before retirement. Two out of five of today’s 20 year olds will face premature death or disability before reaching retirement age. 

Proposals to divert workers’ current payments from the Social Security system into individually-held, private accounts would significantly damage women’s retirement income. The returns on individual accounts would be dependent on the risks of volatile investment markets and would not be guaranteed to keep pace with inflation nor provide spousal benefits, widow’s benefits or benefits for divorced spouses«all of which are special features of the current Social Security system. Since Social Security provides the core of women’s retirement income, without the guarantees of a shared insurance pool, cost-of-living increases, and spousal and lifetime benefits, many women could easily outlive their assets. 

We believe that women must play a significant role in shaping Social Security for future generations. All proposals to address the future solvency of the Social Security Trust Fund must be viewed through the eyes of women and assessed for their impact on women, the majority of Social Security recipients. 

Remaining inadequacies for women in the current system also must be addressed. If we strengthen the Social Security system so that it works well for women, we will have a system that works well for all Americans.

WOMEN’S CHECKLIST ON SOCIAL SECURITY REFORM

Keep the HEART in Social Security

Social Security is the heart of our nation’s social insurance program, providing universal coverage for workers and their families through the pooling of resources that guarantees benefits to all. Check each reform proposal to see if it meets the women’s check test. 

DOES THE REFORM PROPOSAL . . . 

• Continue to Help Those With Lower Lifetime Earnings, Who are Disproportionately Women? 

Social Security’s benefit formula is structured so that the lowest paid workers receive benefits that replace a higher proportion of their pre-retirement earnings than higher-wage workers. Many of the lowest paid workers also have no pensions from their jobs. Any reform must retain this feature benefiting lower-paid workers. 

• Maintain Full Cost of Living Adjustments? 

Social Security’s annual cost-of-living increase (COLA), which is indexed to inflation, is a crucial protection against the erosion of benefits. Because women live longer than men, on average, and rely more on Social Security since they often lack other sources of retirement income, this provision is particularly important to women. Even when employment-based pension income is available, it is rarely inflation-protected. 

• Project and Strengthen Benefits for Wives, Widows, and Divorced Women? 

Social Security’s family protection provisions help women the most. Social Security provides guaranteed, inflation-protected, life-time benefits for the wives of retired workers, widows, and many divorced women, many of whom did not work enough at high enough wages to earn adequate benefits on their own accounts. (Similarly low- earning men married to higher-earning women also have these protections; however, while 63 percent of female Social Security beneficiaries aged 65 and over receive benefits based on their husbands’ earning records, only 1.2 percent of male Social Security beneficiaries aged 65 and over receive benefits based on their wives’ earning records.) 

• Preserve Disability and Survivor Benefits? 

Social Security provides benefits to 3 million children and the remaining care-taking parent in the event of the premature death or disability of either working parent. Spouses of disabled workers and the widows (or widowers) of workers who died prematurely also receive guaranteed life-time retirement benefits. Two out of five of today’s 20 year olds will face premature death or disability before reaching retirement age. 

• Protect the Most Disadvantaged Workers from “Across the Board” Benefit Cuts? 

Some proposed “across-the-board” benefit cuts such as raising the retirement age or the number of years of work history used in calculating benefits would disproportionately hurt those with the most physically demanding or stressful jobs who cannot work more years, as well as those who have low life-time earnings, including many women (because they move in and out of the labor force to provide family care), minorities, temporary, seasonal and part-time workers, agricultural workers, and the chronically under and unemployed. These workers are also unlikely to have other employer-provided retirement benefits. 

Social Security has worked for women because,…every retired worker receives a benefit she can count on every month for her entire life, with the added comfort of knowing that benefit will be increased regularly to meet inflation. 

•  Ensure That Women’s Guaranteed Benefits Are Not Reduced By Individual Account Plans That Are Subject to the Uncertainties of the Stock Market? 

Proposals to divert workers’ current payments from the Social Security system into individually-held, private accounts, whose returns would be dependent on volatile investment markets and would not be guaranteed to keep pace with inflation nor provide spousal benefits (including benefits to widows and divorced women), would reduce the retirement income of many women. Without the guarantees of a shared insurance pool, cost-of-living increases, and spousal and lifetime benefits, many women could easily outlive their assets. 

• Address the Care-Giving and Labor Force Experiences Of Women? 

The Social Security system is based on marriage and work patterns that have changed. Currently, the benefit formula, which generally helps those with low life-time earnings, also favors those with 35 years of labor force participation, years which many women lack because of family care-giving. Moreover, the effects of sex-based wage discrimination during their working years are not fully offset by the more generous treatment low earners receive. Such issues as divorce, taking time out of the workforce for caregiving, the differences in current benefits between one and two-earner couples, and the inadequacies in benefits for surviving spouses must be considered at the same time that solutions to strengthening the financial soundness of the system are being sought. 

• Further Reduce the Number of Elderly Women Living In Poverty? 

 Social Security has helped reduce poverty rates for the elderly, from 35 percent in 1959 to less than 11 percent in 1996. In 1995, the poverty rate for all women over the age of 65 was 13.6 percent while the poverty rate among women aged 65 or older who lived alone was 23.6 percent. Without Social Security, the poverty rate for women over 65 would have been an astonishing 52.9 percent. Nevertheless unmarried women still suffer disproportionately; single, divorced, and widowed women aged 65 or older have a poverty rate of 22 percent, compared with 15 percent for unmarried men and 5 percent for women and men in married couples. 

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The National Council of Women’s Organizations is a non-partisan network comprised of the leaders of over 100 women’s organizations, which together represent more than six million women. Organizational members focus primarily on promoting public policy and legislative strategies affecting women. Membership in the Council is diverse and includes organizations working on a broad spectrum of issues including equal employment opportunity, economic equity and development, education and job training, reproductive health, as well as the specific concerns of mid-life and older women, girls and young women, women of color, religious women, business and professional women, homemakers and retired women 

Contact c/o National Committee on Pay Equity, 1126 16th Street, NW, Washington, DC 20036 Tel: (202) 331-7343 Fax: (202) 331-7406 

Womens and Social Security Taskforce Members: Janice Weinman, American Association of University Women; Nancy Zirkin, American Association of University Women; Gail Shaffer, Business and Professional Women/USA; Suzanne Stokes, Business and Professional Women/USA; Martha Burk, Center for the Advancement of Public Policy; Jennifer Jackman, Feminist Majority Foundation; Eleanor Smeal, Feminist Majority Foundation; Heidi Hartmann, Institute for Women’s Policy Research; Shoshana Riemer, NA’AMAT USA; Susan Bianchi-Sand, National Committee on Pay Equity; Jane Smith, National Council of Negro Women; Jan Erikson, National Organization for Women; Nancy Duff Campbell, National Women’s Law Center; Joan Entmacher, National Women’s Law Center; Mal Johnson, National Women’s Conference; Deborah Briceland-Betts, Older Women’s League; Roberta Weiner, Older Women’s League; Donna Allen, The Woman Activist Fund; Cindy Hounsell, Women’s Institute for a Secure Retirement