American Association of University Women
1111 SIXTEENTH STREET NW
WASHINGTON, DC 20036
202/785-7700
FAX: 202/872-1425
TDD: 202/785-7777
e-mail: info@mail.aauw.org
http://www.aauw.org
SOCIAL SECURITY REFORM
For more than a century, the American Association of University
Women (AAUW) has promoted equity in the workplace, education, and
in all aspects of women's lives. AAUW has long been committed to
a Social Security program that improves the social status and
economic security of the elderly. As the 106th Congress considers
proposals to reform the current Social Security system, the economic
well-being and security of women must be safeguarded. It is critical
that the following factors be considered:
Women are more dependent on Social Security than men.
- Women earn less than men. For every dollar men earn, women earn
74 cents, which translates into lower Social Security benefits. In
fact, women earn an average of $250,000 less per lifetime than
men-considerably less to save and/or invest in retirement.
- Women are half as likely as men to receive a pension. Twenty
percent of women versus 47 percent of men over age 65 receive
pensions. Further, the average pension income for older women is
$2,682 annually, compared to $5,73 1 for men.
- Women do not spend as much time in the workforce as men. In
1996, 74 percent of men between the ages of 25 and 44 were employed
full-time, compared to 49 percent of women in that age group. Women
spend more time out of the paid work force than do men in order to
raise families and take care of aging parents.
- Women live longer than men. A woman who is 65 years old today
can expect to live to 85, while a 65 year old man can expect to
live to 8 1. Because women live longer, they depend on Social
Security for more years than do men.
Women need guaranteed benefits they can count on.
- The poverty rate among elderly women would be much higher if they
did not have Social Security benefits. In 1997, the poverty rate
among elderly women was 13.1 percent. Without Social Security
benefits it would have been 52.2 percent. For elderly men, the
poverty rate is much lower at seven percent. If men did not have
Social Security benefits, the poverty level among them would increase
to 40.7 percent, a smaller increase than for women.
- Social Security benefits are the only source of income for many
elderly women. Twenty-five percent of unmarried women (widowed,
divorced, separated, or never married) rely on Social Security
benefits as their only source of income. It is the only source of
income for 20 percent of unmarried men.
- Older women of color are poorest in retirement. Only 25 percent
of African American and 33 percent of Hispanic women have income
from savings or assets. The poverty rate is particularly high among
African American women over age 65, at 28.9 percent.
Any Social Security reform must increase the stability and security
of retirement income, including maintaining and protecting:
- Full cost of living adjustments. The current Social Security
system protects against inflation, a crucial protection against
the erosion of benefits. This provision is particularly important
to women because they live longer, rely more on Social Security,
and lack other sources of income. Pensions and personal savings
accounts are rarely indexed to inflation, and retirees may outlive
those assets.
- A progressive benefit formula. Social Security should continue
to replace a larger share of low-income workers' past earnings as
a protection against poverty, and beneficiaries who earned higher
wages during their work life should continue to receive benefits
related to their earnings history. The current benefit formula
compensates women for lower lifetime earnings.
- Spousal benefits. Social Security's family protection provisions
help women the most. Social Security provides guaranteed,
inflation-protected, lifetime benefits for widows, divorced women,
and the wives of retired workers. Sixty-three percent of female
Social Security beneficiaries age 65 and over receive benefits
based on their husbands' earning records, while only 1.2 percent
of male beneficiaries receive benefits based on their wives' earning
records. These benefits offset the wage disparity between women
and men.
- Disability and survivor benefits. Social Security provides benefits
to three million children and the remaining care-taking parent in
the event of premature death or disability of either working parent.
Spouses of disabled workers and the widows of workers who died
prematurely also receive guaranteed lifetime retirement benefits.
These benefits have enabled women to hold their families together
under tragic circumstances.
Contacts: Nancy Zirkin, Director of Government Relations, 202/785-7720
Ellen Buchman, Field Manager, 202/785-7704
Public Policy & Government Relations Department
December 1998
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