Somewhat belatedly, I have just read last Friday’s edition of The Wall Street Journal. It contains an article by Jackie Calmes, “On Social Security, It’s Bush vs. AARP” that includes an inset, “A Menu for Solvency” said to provide "A look at some options for changing Social Security benefits or payroll taxes, and AARP’s calculation of their impact on the program’s projected actuarial shortfall over the next 75 years, based on Social Security Administration data". One of the options that is listed would ostensibly cover 16% of the projected shortfall (over the next 75 years). It is “Change benefits calculations to be based on a worker’s 38 highest paid years, instead of 35 years". If you women do not cringe, in reading this, you should. For as long as “Western culture” has been around, women have paid a high price for being the bearers/adopters and tenders of our children. One part of the price is that mothers's careers suffer from the work experience foregone in staying home to bear or adopt and raise the children. Another part of the price is in the amount of SS one may draw because the SSA bases SS payments on the highest-paid 35 years of a person’s working life. Many mothers have years of essentially, if not in fact, zero covered earnings due to family responsibilities. For instance….
Yours truly was essentially unemployed (occasionally substitute-teaching at the local high school for a couple of years) until 36 years of age. Except for a few semesters that I spent earning a graduate degree (ages 34-35), Dudette and Bogie had a stay-at-home mom. At age 65 (+2 months), when I began drawing SS payments, they were based on my highest 35 years of covered earnings—including 6 years of “zero". Now, Dudette and Bogie are absolutely wonderful daughters and I took great delight in them as we spent time together in their younger years; but, there is an economic penalty for our time together that will last for the rest of my life. The penalty would have been even greater had the payments been based on my highest 38 years of covered earnings—with the number of my “zero” years increased to 9. Fortunately, I can afford the penalty. I will be able to eat three square meals, at least for the remainder of this week. But, I really feel for those mothers who were/are not so fortunate.
I don’t know whose idea it is to change the calculations (and I reluctantly admit that if we are looking at options, we should look at options), but I should hope that we would not make a change to the SS system that causes an increased burden to rest on the backs of the mothers who stayed home caring for their children. If you've not already read Ronni's run-down on the SS privatization issue, I recommend that you go to Ronni's main page and click on "Social Security Privatization" listed on the left hand sidebar under "Series". Take it away, Ronni!!
Hear! Hear! Women are already penalized in the workplace by being paid less than men for the same jobs. I believe the current numbers are that women earn about 70 cents for every dollar men do.
This change in calculation would further increase the discrepancies between men's and women's income by extending it into old age.
Posted by: Ronni Bennett | January 25, 2005 at 08:47 AM
Thanks for your input, Ronni. Neither of us has yet mentioned that the unemployed years that a mother may accrue also lessen the retirement pay that she may draw from employer(s). And, until the 1970s when a law was enacted requiring faster vesting of retirement benefits, 10 years of continuous service with a single employer were required to have a vested retirement benefit. (My retirement pay reflects only 23 of my 30 years of employment as an engineer due to lack of vesting.)
Before I forget, I should correct a couple of points of fact. In addition to my chronology, Dudette was subjected to the humiliation of having an employed mother from the time she was a few months old, until she was two. At that point, Hunky Husband decided that he did not care to pursue a graduate degree (we had been saving our money to return to school for his graduate and my undergraduate degrees). I transferred to the University of Wichita to complete an undergraduate degree. Thus, nearly-full-time studies kept me busy for one summer term in 1961 and the fall and winter terms of 1961-1962. Bogie was born just two months prior to my being awarded the coveted degree (in physics). Apologies for my oversight.
Posted by: Cop Car | January 25, 2005 at 10:39 AM
I've been following along on this. I don't have the facts at hand, but I believe the SSA is pushing retirement dates back as well. You began collecting at 65, but I think I have to wait to 66, and I don't doubt there will be more changes in the rules before I get to that point. I suspect that were you to point out the argument of the "zero" years, they would point to the longer wait to receive social security as part of the solution to the problem, but that assumes that we will all have quality jobs until we are 67, 67, 69 or perhaps 70, and I doubt that seriously.
Posted by: Buffy | January 27, 2005 at 11:45 PM
Yes, Buffy, people born in 1938 were the first to feel the effects of the increase in age at which one could collect full SS benefits. I had to be 2 months older than Hunky Husband was required to be. Eventually, we'll have it up to age 70 [clarification: I believe that this will happen; but, in fact, the age is to rise to only 67 with today's laws. From the US government site: "Full-retirement age is the age at which you may receive an unreduced retirement benefit. Full-retirement age has been 65 for many years. However, beginning with people born in 1938 or later, that age will gradually increase until it reaches 67 for people born after 1959. The 1983 Social Security Amendments included a provision for raising the retirement age beginning with persons born in 1938 or later. Congress cited improvements in the health of older people and increases in average life expectancy as primary reasons for increasing the normal retirement age."]
Of all the men that I know, personally, who have collected social security, only my father waited until age 65 to start collecting. The rest have started at age 62, including HH, who had retired at age 57. I've not known many women who drew/are drawing social security--and I just realized that I don't know when my mother started drawing it (she was 5 years younger than my father.) My point is: I'm not sure how relevant the full-benefit retirement age is because I don't know how many people actually wait until that age to start drawing their benefits. (I've heard only a whisper concerning any consideration of pushing back the age at which "early" SS benefits can be drawn.) Obviously, however, it is relevant to you. I can only hope that your generation is enjoying the benefits of better medical care and better health than my generation had/has to make up for the difference in retirement ages. (Is this where I get to go into my song and dance about how we didn't even have toothbrushes when I was a kid?)
I had actually not intended to retire until this year, if then, and had planned to start drawing SS whenever I did retire. (Until a few weeks before I announced my planned retirement, I had told everyone--and believed it--that I would never retire.) Something in my conversation with the people at the SSA, a few months prior to my hitting 65, caused me to decide to start drawing as soon as I could draw full benefits. My dwindling happiness quotient at work caused me to retire.
Posted by: Cop Car | January 28, 2005 at 07:59 AM