August 11, 2015

Gender Pay Gap Extends Into Retirement For Women

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The gender wage gap has existed as long as women have been in the workplace, and despite legislation through the years — 1963’s Equal Pay Act, and 2009’s Lilly Ledbetter Fair Pay Restoration Act – the gap doesn’t seem to be closing.

logo_ColumnThat is unfair and wrong, and damaging to far more than the female employees earning smaller paychecks than their male peers. More and more, families rely on the female wage earners for necessities.

What’s worse, in a few years, the gap is going to hit everyone where it hurts – in the pocketbook in the form of increased taxes needed to pay for public services for baby boomer women (like me, and thank you for your contribution) who may not be able to make ends meet living on smaller pensions and/or Social Security benefits.

So now is as good a time as any to practice a little math.

If a woman earns, say, 78 cents for every dollar a man makes (and that is the figure for Connecticut women in an American Association of University Women study released earlier this year), then over her lifetime, that puts her behind her male counterparts to the tune of $435,049, says a recent study by the National Women’s Legal Center. The Wage Project puts the figure higher, at roughly $1 million. The disparity is greater for women of color, and women with disabilities, though Asian women tend to fare better; they earn 87 percent of what their male peers make.

And then when a woman retires or leaves the full-time workforce, keep in mind that the vast majority of retirees rely heavily on their Social Security benefits, which are based on lifetime earnings. In 2012, for 65 percent of people age 65 or older, half or more of their income came from Social Security. Thirty-six percent rely on Social Security for 90 percent or more of their income.

The average monthly Social Security payment is $1,294. Since Social Security benefits are based on life-long earnings, in 2013, the average monthly Social Security income for women 65 years and older was $1,071.42, compared to $1,382.50 for men.

Add to that the fact that women live longer81.5 years, compared to 76.4 for men nationally — and you have a recipe for financial disaster that goes far beyond individual women.

Equal Work-Pay“My fear is you’re going to have all of these women who are going to retire and these women may well wake up and see the pay gap is long-term problem,” said Carolyn Treiss, executive director of the state’s Permanent Commission on the Status of Women. “For women, it’s almost like adding insult to injury. We make less and we live longer.”

The challenges will be particularly acute in Connecticut, where policymakers warn of a coming silver tsunami of aging Americans threatening to break the federal bank. In a 2007 satirical novel, Christopher Buckley called the phenomenon “Boomsday.” Connecticut ranks third in the nation in terms of life expectancy. Already, more than a third of state residents are over the age of 50. Places such as Salisbury, Wethersfield and Lyme have populations where 20 percent or more of their residents are 65 or older. The Connecticut Legislative Commission on Aging says that by 2030, Connecticut’s over-65 population could grow by as much as 64 percent.

“Think about what a difference it could be if women had more money in their retirement,” said Treiss. “Over time, it compounds.”

 

 

 

 

 

 

 

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