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The Myth of Older, Richer Women

by Jo Freeman

When I was growing up in the 1950s, there was a pervasive assumption that most of the nation's wealth was owned by women. Women lived longer than men and inherited the money their husbands made, so it was said. Ipso facto, widows were rich.

Anyone even slightly familiar with the voluminous statistics collected by the government knew this was a myth, but not until the new feminist movement arose in the late 1960s was it publicly questioned.

It took organized women at least a decade to convince the public that women, especially older women, really were poorer than men. It took longer to convince the government that particular attention ought to be paid to the economic problems of older women; very few became rich widows.

The struggle is not over. Although the poverty rate among the elderly is less than a third what it was forty years ago, the "gender gap" remains. As the Twentieth Century ended, almost twice as many women as men over age 65 (13 % to 7%) had incomes below the poverty line. This gap is larger for those who are older.

At the sixth conference of the Institute for Women's Policy Research (IWPR) held in Washington D.C. last June, the problems of older women were high on the agenda. Numerous papers emphasized that the economic reality for retired women is collectively worse than that for retired men. The "three-legged stool" on which retirement traditionally rests -- savings, pensions and social security -- has shorter legs for women.

As succinctly put by Lois Shaw and Catherine Hill, "older women enter retirement with fewer economic resources than men." Their lifetime earnings are lower; they are less likely to have pensions, and those too are lower; they are less likely to be married, and those that are married are more likely to be caring for their spouse rather than being cared for.

A look at the "legs" shows how much shorter they are.

Earnings

While the gender gap in annual income is going down, it has not gone away. Women still earn less than men, whether they work in similar jobs or in lower paying "women's jobs." They are more likely to work part time and are employed fewer years during their lifetimes. Younger women are doing better than we did, but their success does not translate into a lower gender gap for those women now entering retirement -- the ones who were raised on the rich widow myth. On the contrary, because husbands usually retire before wives, older men are more likely to have an employed spouse than older women.

Pensions

Half of American workers don't have pension plans. Of those now receiving pensions, women still get less. The fact that women work full-time for fewer years than men means lower pensions when they retire. As of 1995, women's pensions were worth only 58 percent of men's, and only 26 percent of women over age 65 had pension income, compared to 46 percent of men. Survivor benefits give widows only fifty to sixty percent of what their husbands received, but their expenses are rarely cut by that much.

Social Security

Women's lower lifetime earnings makes social security particularly important in their older years. Forty percent of unmarried women, but less than 30 percent of unmarried men, rely on it for 90 percent of their retirement income. The fact that social security is almost universal, less dependent on working full-time for most of one's adult life, and has more generous survivor benefits than most pensions, results in a smaller gap in the overall benefits received by men and by women than is true for pensions. Women's benefits are 76 percent of those that men receive. Despite vast changes in access to jobs and in labor force participation, retirement programs still assume that all women are married, and their husbands earn enough to provide for them until death. We now know that this is not true, if it ever was. Thus how to maintain a decent standard of living in old age is a major policy problem that must be resolved in the Twenty-first Century. It's front and center right now because of the many proposals to revamp social security before it hits a crisis state of too many recipients and too few contributors.

This is a debate in which women, especially older women, have a lot at stake. IWPR President Heidi Harmann says that privitization would be a disaster for women. Others think it would help some women, but not all.

For different views see:

Institute for Women's Policy Research

www.ncpa.org/pi/congress/socsec/oct98c.html

www.pacificresearch.org/issues/health/sswomen/sswomen.html