NWLC’s analysis of yesterday’s Census data shows poverty rates generally stabilized after three years of increases. But one notable exception is the significant increase in the poverty rate for women 65 and older living alone, which rose to 18.4 percent in 2011 from 17.0 percent in 2010.
We can’t yet explain why poverty increased for this already vulnerable group of women; the poverty rate for all women 65 and older was unchanged from 2010 at 10.7 percent. But we do know that single elderly women are especially reliant on income from Social Security. So we’re worried that policy makers continue to look to the Simpson-Bowles report as a model for deficit reduction, including its proposal to reduce Social Security’s annual cost-of-living adjustment by changing the measure of inflation to the “chained consumer price index,” because this proposal would especially hurt women.
Some politicians seem particularly intrigued by this idea, since it sounds like a technical change that might not be recognized as a benefit cut, and it starts out small. But the cut from the chained-CPI gets deeper every year. That’s particularly harmful to women because they live longer than men. Our analysis found that for a typical single elderly woman with an initial monthly benefit of $1,100, switching to the chained CPI would reduce her monthly benefit by age 80 by $56 – the equivalent of more than one week’s worth of food each month. By age 95, the loss would be equivalent to nearly two weeks’ worth of food each month.
While most of the Social Security benefit cuts proposed in the Bowles-Simpson plan would fall most heavily on future retirees, especially today’s children, the only way the Bowles-Simpson plan gets the savings it projects from switching to the chained CPI is by applying this cut to current beneficiaries.
The Social Security benefits of women 65 and older average a modest $12,100 per year – but without them, half of women 65 and older would be poor. So we really hope policy makers think long and hard about yesterday’s poverty numbers – and, far more importantly, the people behind them – before cutting the benefits that millions of older women, especially those living alone, depend on.