Women learn, earn and work more than they did 100 years ago. This is a sign of progress in the fight against sexism. However, women with equivalent skills and education still earn less than men, and retirement safety in old age is much worse.
More than half of American women over the age of 65 are financially vulnerable and much more likely to fall into poverty as a result of lower lifetime income, lower retirement savings, and longer life expectancy. ..
Celebrate progress. The World Economic Forum’s Global Gender Gap Index reports that there is no difference between American men and women, and that the education gap between women and men is narrowing everywhere. But education is not everything. Men and women take similar loans and pay the same tuition, but when they graduate and enter the labor market, paying for the same equivalent job, women are initially behind. In 2020, women in the United States received only 84% of the median hourly income of men.
Barbara Schuster, a PhD economics student at New School, helped with this report. Keep in mind that injuring women’s low wages also imposes an unequal burden on women — working at zero wages. American women in the United States spend almost twice as much time on unpaid household chores as men. And being a parent costs more to women. Men are more likely to receive parental premiums. Women pay “mother” taxes. Unequal parental economic consequences are partly caused by changes in working hours after childbirth. While fathers work more hours, mothers tend to spend less time on paid work, leading to career paths, part-time jobs, or employment in lower-paying professions that are more flexible than managerial positions. In addition, the progressive income tax on family income discourages married women from joining the workforce, which is a small factor compared to inadequate childcare.
Economists break down all these factors to determine which is more important in creating a gender pay gap. The biggest factor is that women’s wages are still low because women’s occupational wages are low, women spend less time caring for their families, and employers believe that women’s wages are low. Worth it, women will accept lower wages.
What people may not be aware of is that decades of reduced income mean less contribution to social security and retirement accounts, which leads to lower retirement savings.
However, not only are social security benefits affected by lower lifetime income, but also retirement benefits accumulated through employer-sponsored retirement plans. For a few people who define a benefits plan that benefits are based on work tenure and salary, the workers who enjoy the best benefits have a long and uninterrupted career. .. Most workers have a retirement plan, about half have nothing, and most have a 401 (k) type plan. Women are at a disadvantage to their design. This is because the benefits and leaks of changing jobs are highest and less leaky because men are more common than women, have less service interruptions, and have long-term, safe work.
.. The consequences of lower retirement savings for women are considerable, as women have a longer life expectancy and have to process their savings over a longer period of time. In addition, women tend to retire at a younger age than men, as spouses often retire at the same time and women are usually younger partners.
Working longer is a great advantage for women over men, as early retirement adversely affects women’s post-retirement safety. This motivates women to work longer and gives them more time to accumulate retirement wealth. However, the Covid-19 pandemic has caused 1.7 million involuntary retirements, and age discrimination is also an obstacle for women who want to work longer.
The negative effects of discrimination facing women in the labor market will last a lifetime. Therefore, in order to correct gender inequality in the retirement system, we must start with changes in labor market policies and practices.
Policy measures should alleviate obstacles to paid women. Start a strong federal paid family and medical leave program and affordable childcare. Probably a longer school day and a longer grade. Triple win for students, parents, and the majority of female workers in schools.
Another possibility is to provide credit for social security caregivers. It provides financial compensation at retirement for those who have left the workforce to care for their families. My destination for gender equality for women, the memorable acronym Women’s Institute for Safe Retirement — WISER has more ideas and resources.