Social Security Is One of the Best Friends American Women Have

Issue Brief | April 28, 2002

Executive Summary

Jennifer Dunn and Dorcas Hardy got one thing right in their opinion piece on Social Security (, Opinion, April 17, 2002). The system could be improved to work even better for American women. However, the radical restructuring that Dunn and Hardy suggest would slash guaranteed benefits and cost over $1 trillion. Privatizing Social Security is precisely the wrong approach for women and all Americans.

Social Security is a great American success story. Poverty among our seniors has fallen to less than 10%, compared to 35% as late as the 1950s. Social Security also provides a stable income to millions of younger families that have suffered the death or disability of a worker. Over three million children collect benefits, including at least 2,300 children whose parents were killed in the September 11th terrorist attacks.

Social Security works well for all Americans, but especially for women. Benefits are guaranteed, and are determined by both earnings and need. A child care worker whose lifetime earnings averaged $14,000 a year would collect a benefit totaling 57% of that amount, while an engineer with earnings averaging $80,000 would receive 23% of his working wage in benefits. Social Security pays additional benefits for additional family members, and survivors benefits to elderly widows and widows caring for young children. These features help offset the fact that women still lag behind men in earnings, and more often choose to take time out of the workforce to care for family.

Social Security pays guaranteed benefits to seniors for life, with annual automatic cost of living raises.  Today women outlive men by 5.6 years on average. As a result, women represent 58% of all seniors collecting benefits, and 71% of beneficiaries over age 85. The longevity gap is expected to continue, making these guarantees particularly important to women.

Finally, only 38% of women have an employer-sponsored retirement plan compared to 57% of men.  Women also typically have less accumulated in their accounts because of lower earnings. Not only are today’s senior women far more dependent on Social Security than men, but younger women are likely to be in the same boat when they retire.

Privatizing part of the system would reverse all the advantages of Social Security’s insurance protections. If workers invest part of their payroll taxes in individual accounts, guaranteed benefits would have to be cut. Benefits for spouses, widows, and disabled workers would be jeopardized. You cannot outlive your Social Security, but you can live longer than the funds in a private account.  Women, who frequently earn less, live longer, and rely more heavily on family, survivor, and disability benefits would suffer. Women of color would be most severely affected. And since today’s benefits are paid with today’s payroll taxes, we would have to raise over $1 trillion in new taxes to finance the transition to that new system, a fact Dunn and Hardy neglect to mention.

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Posted in Retirement Security, Social Security