Argument: Privatizing Social Security negatively impacts women

Issue Report: Privatizing social security


Greg Anrig and Bernard Wasow. “Twelve reasons why privatizing social security is a bad idea.” The Century Foundation: “REASON # 10: WOMEN STAND TO LOSE THE MOST. The Social Security system is gender-blind. None of its provisions treat women differently from men. But that does not mean that the results are gender-neutral. Various cultural and biological differences add up to the fact that Social Security is much more essential, and a much better deal, for women than for men. Of all groups, none has more to lose from the privatization of Social Security than women. Compared to the average man, the average woman works fewer years outside the home, earns less per year, and lives longer after retiring. Together, these differences mean that women depend more than men do on spousal and survivors benefits, they collect benefits for more years than men do, and a greater proportion of their total retirement incomes comes from Social Security.”

Since women on average work fewer years at lower pay, they contribute less in payroll taxes over their lifetimes than do men. But in their various roles as retirees, spouses, and widows, women collect Social Security benefits for more years than men. The result is that women get more net benefits over their lifetimes than do men. There are fourteen women for every ten men aged sixty-five or older.18 Above age eighty-five, this ratio reaches twenty-three women per ten men. Consequently, 60 percent of all Social Security beneficiaries are women and children.19 Among those receiving survivors and disability benefits, women and children constitute 87 percent. Women also depend more on Social Security. Women over age sixty-five who are not part of a couple (either widows, divorcees, separated, or never married) get 51 percent of their incomes from Social Security.20 For men in the same situation (about a third as many), the figure is 39 percent. Excluding those over age sixty-five with the highest incomes, the bottom 80 percent of nonmarried seniors depend on Social Security for about three-quarters of their income.

The poverty rate for older women is almost twice that of older men (in 1997, 13.1 percent versus 7.0 percent). For older women who are not in a couple, the rate gets much higher: more than one in four lives below the Greg Anrig, Jr., and Bernard Wasow 13 poverty line. Fewer than half of them had incomes in 1997 above $1,000 per month. Without Social Security’s guaranteed benefits, the already marginal income security for older women would be much worse.

In spite of the improvement in employment opportunities for women, the role of homemaker and primary parent still falls unequally on wives and mothers. Private accounts would jeopardize income that wives, widows, and divorcees now receive under Social Security. The more individual control that passes to workers, the fewer rights their dependents will retain to secure retirement income. If the guarantees and redistributive features of Social Security are replaced with a system that provides benefits according only to how much a worker earns over that worker’s lifetime and how fortunate that worker is in financial markets, the average woman, especially the average widow, will lose security and income from already low levels.”