Midlife and Menopause
Women's Work: Pay, Pensions and Poverty
Women’s economic well-being depends on four things: our wages, the wages of family members, the availability of government-funded income support programs, and our wealth (either our own or that of family members). The amount of income and benefits available to us, and its composition, changes over the course of our lives. As children, we depend on family income and perhaps government support; as adults, our own wages may be our largest source of income; as mothers, we may rely on family members and government programs; and in our later years, we may depend on savings, pensions, and Social Security. Our access to resources differs depending on our race, ethnicity, class, citizenship status, marital status, and sexual orientation. All of these factors continue to interact to determine our standard of living as we age.
Women who are in the paid labor force earn less over our lifetime than do men. According to one estimate, the average 25-year-old working woman will lose about $455,000 to unequal pay during her lifetime, leaving her with less money to save, a smaller pension (if she has one at all), and lower Social Security benefits. After a lifetime of being unpaid, underpaid, or unemployed, it is no accident and no surprise that women 65 and over are almost twice as likely to live in poverty as older men. In 2003 the poverty threshold was defined by the U.S. government as income less than $8,825 for someone over 65 living alone and $11,133 for a two-person household with one or both people over 65. The dollar value of these thresholds is clearly too low. For more information on how they are calculated, click here.
Poverty rates vary greatly by race and ethnicity and by location. According to a report issued by the U.S. Department of Health and Human Services, one of every twelve (8.3%) of whites over age 65 was poor in 2002, compared to 23.8% for African-Americans, 21.4% for Hispanics and 13% for Asian/Pacific Islanders. Higher than average poverty rates for those over 65 were found among those who lived in metropolitan areas(12.2%), outside metropolitan areas (i.e. rural areas) (11.9%), and in the South (12.7%). (For the complete report, click here.)
Marital status is an important determinant of economic well-being for women and men over the age of 65, with the highest poverty rates for women living alone. Women are more likely than men to live alone in retirement since women who marry tend to marry older men and women have longer life expectancies. “Unmarried women living alone show the highest poverty rate of all groups at all ages above 50 (approximately 20 percent).”
One reason that women over 65 are more likely to live in poverty than men over 65 is unequal access to pensions. There are different types of pension plans and women fare less well in all of them. Private pensions are tied to employment. Thirty percent of women compared with forty-seven percent of men 65 and older are covered by private pension plans. Women's annual benefits are only half the amount received by men. As a result of lower wages, fewer years in the work force, and part-time and temporary employment women covered by pensions receive an average of $5,600 per year compared with $10,340 for men.
The outcome of current policy discussions about reforming/privatizing Social Security will have important implications for women. Women are nearly 60 percent of all beneficiaries, including retirees, people with disabilities, and the survivors of deceased workers. Twenty-seven million women receive Social Security checks every month. Several features of Social Security provide benefits for women that would not be available under any privatization plan. Social Security is a progressive system; structured to provide relatively higher income for those with lower earnings. It also provides survivor benefits for widows and minor children, provisions that are key for women who do not work outside the home but provide for a family’s well-being in other ways. The Institute for Women’s Policy Research maintains an up-to-date website on women and Social Security reform.
Income is only one determinant of well-being and this is no less true after age 65. The state of our health is crucial and the factors that influence our physical and emotional health are no less complicated than those affecting our income. Nor are the two separate. According to a profile of Americans over 65 compiled by the AARP, African-Americans over 65 are more likely to be sick and disabled, and to see themselves as being in poor health, than their white counterparts. They have higher rates of chronic disease, functional impairment, and indicators of risk, such as high blood pressure and higher mortality rates. Latinos over 65 have somewhat higher rates of activity limitation and spend more days per year in bed because of illness than do non-latino whites. Hispanics also suffer from high rates of hypertension. Certain types of cancers, hypertension, and tuberculosis are major health concerns of older Asian/Pacific Islanders. Relatively little data exists on the use of health services by older Asian/Pacific Islanders, but a few studies have documented some significant factors. Older Asian/Pacific Islanders are less likely to use formal health care services, such as those reimbursed under Medicare. Cultural and language differences, a reliance on folk medicine, and a distrust of Western medicine help explain why. The complete AARP profile is available at their website.
Despite the criticisms currently being leveled at Social Security and Medicare, these programs have done a great deal to reduce poverty and improve health care available to those 65 years and older. In 1966, 28.5 percent of all people over 65 in the U.S. were living below the poverty level; by 2004, this dropped to 10.2%. The drop is most dramatic for black Americans, whose poverty rate went from 62.5 percent in 1966 to 20.9 percent in 2003. These numbers are still too high, but tell us that government programs can work to improve the economic well-being of all of us. We must insist that these programs are not only maintained but also expanded.
Written by: June Lapidus
Last revised: April 2005
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