Statement of the National Council of Women's Organizations Task Force on Women and Social Security on "Gender Adjustments"

The National Council of Women's Organizations Task Force on Women and Social Security is co-chaired by Kim Gandy, president of the National Organization for Women.

Representative Bill Thomas, Chair of the Ways and Means Committee in the U.S. House of Representatives, and arguably the member of Congress with the most power to affect the outcome of the Social Security debate, has recently stated that it would be a good idea to consider "gender adjusting Social Security" benefits (Washington Post, January 19, 2005, Page A11).

Rep. Thomas first made this statement at a forum on January 18 and subsequently elaborated slightly on "Meet the Press" on January 23. When asked by Tim Russert whether he meant women should receive lower benefits than men because they live longer than men on average, Rep. Thomas demurred, but mentioned race and occupational differences as other types of adjustments that should be considered as well.

While the National Council of Women's Organizations (NCWO) cannot read Rep Thomas' mind and cannot divine what he meant, we suggest that some adjustments to women's benefits might be in order.

For example, in 2003, the last full year for which we have Census Bureau earnings data for full-time, year-round workers, women earned only 75.5 cents for every $1.00 men did. Adjusting women's benefits upward to compensate women for their lower pay, even when working full-time, year-round, would mean an increase in their benefits of 32.5 percent to bring them into equality with men's benefits (75.5 cents x 0.325 = 24.5 cents).

Making race based adjustments could help Hispanic and African American women even more. Hispanic women earned only 52.5 cents for each $1.00 earned by a non-Hispanic white man according to decennial census data, and African American women earned only 62.5 cents); thus Hispanic women would need a 90 percent adjustment and African American women a 60 percent upward adjustment to bring them into equality with white men's benefits.

And, if Rep. Thomas wants to compensate women for the time they spend out of the labor market caring for children and other family members, as well as their lower pay when they do work, the upward adjustment would have to be much larger. The Institute for Women's Policy Research recently estimated that the typical woman earns just 38 cents for each $1.00 the typical man earns over a life-time. Since Social Security benefits are based on the highest 35 years of earnings (and the years many women spend out of the labor force are averaged in at $0), women's benefits are lower both because they earn less when they work and because they work fewer hours than men, even missing some years of earnings entirely. To compensate women for the impact of this lost time in paid work on their Social Security benefits, women's benefits would need to be increased by 163 percent, more than double (38 cents x 1.63 = 62 cents).

Social Security benefits need to be increased to compensate for the time women have spent in care giving as well as for the discrimination they've suffered in the labor market due to race, ethnicity, and gender.

Of course, privatizing Social Security would make all of these inequities worse, not better. And it would be unlawful to "adjust" benefits, either up or down, based on sex or race. The NCWO urges Congress, including Chairman Thomas, to get serious about strengthening Social Security in ways that preserve and improve benefits for those who rely on Social Security, including women.

NCWO urges women across the United States to let Congress, including Representative Thomas, know that their work should not be undervalued in retirement as well as throughout their working lives. You may contact your representative by calling the US Capitol Switchboard at 1-202-224-3121. You may contact Representative Thomas directly by phone at 1-202-225-2915, by e-mail at bill.thomas@mail.house.gov, or by fax at 1-202-225-8798 or 1-202-225-2610.

The National Council of Women's Organizations (NCWO) is a non-partisan network of more than 200 women's organizations representing more than ten million women. In the fall of 1998, NCWO formed a Task Force on Women and Social Security to address the critical issue of Social Security reform and to help policy makers understand women's stake in this crucial issue. The Task Force is working with all NCWO members to carry out a public education campaign to reach women across the country and to urge them to let their representatives and candidates know their views on Social Security. Task Force members are working to ensure the program's continued solvency and to improve Social Security for women by putting benefit improvement back on the public agenda. The Task Force also works with a coalition of organizations including labor unions, senior groups, youth advocates, public policy organizations, disability rights groups, and civil rights organizations that oppose the privatization of Social Security. The Task Force on Women and Social Security is co-chaired by Kim Gandy, NOW, and Heidi Hartmann, IWPR. Martha Burk chairs the National Council of Women's Organizations.

National Council of Women's Organizations Letter to Chairman Thomas

January 26, 2005

The Honorable Bill Thomas
Chairman, House Ways & Means Committee
2208 Rayburn House Office Building
Washington, DC 20515

Dear Mr. Chairman,

The National Council of Women's Organizations, on behalf of our membership of over 200 women's organizations, writes to express our concern about your statement regarding gender adjusting Social Security benefits.

As you can see from our enclosed press release, we weren't sure whether you meant that benefits should be increased or decreased for women and we chose to imagine that you believe they should be increased. In the press release, we provide some guidelines for how benefits might be increased.

After all, the purpose of Social Security is to prevent poverty in old age, and poverty rates among older women are higher than those among older men. Retired women are more reliant on Social Security benefits than are retired men, with 44% of older unmarried women relying on Social Security for at least 90% of their income compared to 35% of older unmarried men.

Older women are three times more likely than men to lose their spouse. It is often when a woman loses her spouse that she becomes poor. More than half of elderly widows now living in poverty were not poor before the death of their husbands. As I am sure you will agree, these women especially need benefit increases.

We would be delighted to work with you on ways to increase benefits for women and would be happy to meet with you and your staff.

Sincerely,

Martha Burk, Ph.D.
Chair, National Council of Women's Organizations
1050 17th Street NW, Suite 250
Washington, D.C. 20036
202-293-4505
202-293-4507 (fax)
www.womensorganizations.org
www.augustadiscriminates.org