The Golden Girls Explain Why Equal Pay Matters for Women’s Retirement Security
Today is Equal Pay Day, which is not really my favorite holiday. It’s the day each year when women’s average earnings have finally caught up with what their male peers made in the last year–this year we needed three extra months to make up the difference.
The gap is slightly smaller for Asian women overall (although it’s much larger for some subgroups), and larger for Black women, Latina women, and Native American women. Women would have to work ten years more than men to make up the earnings difference. Women of color have to work much longer to make up that gap, depending on their race and state. In Alaska, Asian women need to work 77 years to make what a white, non-Hispanic man makes in 40 years. In New Jersey, Latina women need to work 93 years to make what a white, non-Hispanic man makes in 40 years.
At the rate women are achieving equal pay – it would still take decades to close the wage gap. Unequal pay affects women throughout their entire lives–but let’s focus on the impact after women retire.
Lower pay means lower Social Security retired-worker benefits. Social Security benefits are calculated based on lifetime earnings. Women currently tend to have lower lifetime earnings than men, and thus lower Social Security benefits when they retire.
The average retired woman receives $1,085 in Social Security benefits monthly –which is 20 percent less than what the average retired man receives ($1,372).
Lower pay means women are able to save less for retirement. Because Social Security isn’t enough to provide a secure retirement, women need to build retirement savings to supplement their Social Security benefits after they retire. Women’s lower pay means that they tend to have fewer retirement savings than men, although they generally need to save more than men because of women’s longer average life expectancy.
Equal pay doesn’t just benefit women now–it also helps them later. Supporting equal pay means supporting retirement security for women.