Raising the minimum wage, as proposed in the Rebuild America Act, would help women in a lot of ways. It would help pull women and their families out of poverty, narrow the wage gap, and strengthen the economy. But it would also help women in another way you might not have thought of – by improving their retirement security.
How is it that raising the minimum wage now would help women years down the line when they retire? For starters, lower earnings mean less money available to set aside for retirement. Increasing the minimum wage would give women a little extra money to save for the future.
Additionally, because Social Security benefits are proportional to average lifetime earnings, lower wages also mean lower Social Security benefits. Social Security is a vital source of income for many older women, making up an average 60 percent of income for women 65 and older, and more than 90 percent of income for nearly 3 in 10 older women. An increase in the minimum wage would translate into a much-needed bump in Social Security benefits for women when they retire.
The effect of the minimum wage level on retirement security is a real one, and raising it is a critical step for women’s economic security now and in their future.