The link is simple and clear: Women earn less than men in the workplace – almost $450 billion less in total each year nationwide – resulting in lower Social Security payments after retirement. The pay discrimination against women not only hurts their current well-being and future security, but also means tens of billions less in revenues to fund Social Security.
U.S. Rep. Rosa DeLauro (D-Conn.) and Social Security Works co-hosted a telephone press conference call today, releasing SSW's research on how closing the gender pay gap can improve women's Social Security benefits and strengthen the program's finances. The conversation was also joined by Ben Veghte, Research Director at Social Security Works, and Stephanie Connolly, legislative and policy associate at Social Security Works.
The Equal Pay Act of 1963 was passed 51 years ago. Despite having made tremendous gains, women still face discriminatory pay in the workplace, earning on average only 77 cents for each dollar earned by their male counterparts. The pay disparity affects all income levels – even women in higher earning fields are affected, the report says.
The impact of the pay gap is also long-term. Social Security benefits are based on lifetime earnings, so women are penalized in retirement because they were not compensated equally during their working years. For Americans over 65 today, women receive only $12,000 annually on average from Social Security, while men receive more than $16,000. Furthermore, statistics show that women live longer; that's one reason women are more than 60 percent of all seniors relying on Social Security.
Women are receiving a quarter less in benefits than men each year, but more than three quarters of women rely on Social Security as their primary source of income. The damage of gender discrimination in the workplace thus becomes life-long.
DeLauro highlighted how Social Security is a fundamental cornerstone of our society, and further emphasized the growing importance of women in our workplace today. "Women only accounted for less than one-third of the workplace when the Equal Pay Act was passed. Today, we stand for half of the American workforce," she said. She commended the Affordable Care Act for finally removing the discrimination towards women in health insurance policies, and calls for the elimination of gender income discrimination in the workplace.
Closing the gender pay gap would also strengthen Social Security finances. Right now the Social Security trust fund is projected to be able to pay full benefits through the year 2033, and would be able to pay 75 percent of benefits afterward. Modest changes to raise revenue coming into the trust fund, however, would assure that full benefits could be paid to future retirees for at least the next 75 years. The report says that if women's income were equal to men with the same age and education levels, that would generate "tens of billions of additional Social Security revenue each year," enough to "reduce Social Security's projected long-term shortfall by roughly one-third."
The American public agrees that closing the gender pay gap is not just a women's issue – over 70 percent of the nation agrees that this country needs to continue to work to give men and women equality in the workplace.
So how can we fix the persisting problem of the gender pay gap?
An important first step is raising the minimum wage to $10.10 an hour. Increasing the minimum wage will affect 4.8 million working mothers. This increase will lead to additional income, additional Social Security revenue, and greater benefits after retirement.
Just passing the Equal Pay Act wasn't enough. Our government must continue to hold corporations responsible and demand justice for women in the workplace. It's time we finally make sure that women are being paid the same as men in the same jobs.
"Those who work hard and contribute to work and family should have adequate protections for themselves and their families when they retire, become disabled, or die," the report said. "Eliminating the wage gap is especially critical to advancing these American values."