Research Says We Could Fix The Social Security System By Paying Women & Men Equally
If sheer unfairness isn’t enough of a catalyst to bring about equal pay for both men and women, perhaps there’s another incentive to spur salary equity: It can fix the looming Social Security crisis, according to The Huffington Post.
After controlling for level of education, work hours, and age, if women were paid the same as their male counterparts, the American workforce would generate an additional $447.6 billion in earnings, according to the Institute for Women’s Policy Research. Of course, a portion of that would be swallowed by Social Security taxes and, in turn, may “trim Social Security’s long-term shortfall by up to a third,” HuffPo adds, citing a report entitled “Strengthen Social Security…Don’t Cut it.”
According to the study, in 2012, “the typical full-time, year-long female worker earned much less than her male counterpart – only about 77 cents on the dollar.”
The pay discrepancy between men and women is glaring: After one year out of college, women with same experience, occupation, GPA, college major, etc. earn seven percent less than men. After 10 years, that figure grows to 12 percent. Over a 35-year career, when comparing men and women of the same skill caliber, this accumulates into a $654,000 pay gap!
Now because Social Security is based on lifetime earnings, you can see why the gender pay gap also places a fissure in the Social Security system, too. So naturally, the lead investigator concludes that eradicating pay inequality will fix the retirement quandary:
“Since about 97 percent of female workers have earnings below Social Security’s tax cap ($117,000 in 2014), and the vast majority of these women work in employment covered by Social Security, most of this additional income would be subject to Social Security, generating tens of billions of additional Social Security revenue each year,” the report says.
The report comes with four specific steps to overcome the pay gap:
1. Pass the “Paycheck Fairness Act,” which will improve protections against wage discrimination.
2. Adopt paid family leave — a woman taking care of her family shouldn’t have her finances punished.
3. Provide credit toward Social Security for caregivers. Credit should be given to “low-wage workers for each year of care for children under the age of six or for elderly or disabled family members.”
4. Increase the federal minimum wage to $10.10. According to the report, doing so will reduce the gap by five percent.
Other economy experts have suggested removing the salary cap of $117,000 to solve the Social Security crisis.
“This wage gap… violates our sense of fair play. Those who work hard and contribute to work and family should have adequate protections for themselves and their families when they retire, become disabled, or die,” the author concluded.