Motherhood – The Real Social Security Crisis

by Kristin Maschka
President, Mothers & More
Feb 2, 2005

I’ve been combing the coverage of the Social Security debate, in newspapers, online, in magazines, and I can’t find women and mothers anywhere. None of the current coverage mentions the real crisis – that sixty-five years have passed and no attempt has been made to reform a retirement system designed with the express purpose of enshrining the values of another time; women should stay home and stay married, men should control the money, and security for families should come from men being the sole providers in life and death for their dependents, including wives.

Recent heightened attention on Social Security provides an opportunity to challenge these values and insist on changes that adhere instead to values that protect the economic security and personal autonomy of women and mothers. Women and mothers cannot afford to stay on the sidelines. Women live longer than men and are more likely to run out of personal savings. Yet, a member of Congress recently suggested that women’s benefits be lowered because they live longer. Without Social Security, poverty rates for elderly women would be more than fifty percent. Mothers – and anyone else who sacrifices earnings to care for others – are currently rewarded with an increased risk of poverty in old age.

Social Security was designed to disproportionately benefit single-earner families and discourage women from working outside the home. The lower-earning spouse can claim one hundred percent of the benefits based on her own work record or fifty percent of the benefits her spouse has earned even if she has earned nothing, whichever is greater. Sixty-three percent of women claim the spousal benefit, so most married women who are employed over their lifetimes make contributions to the system, but see no net benefit because they will claim the larger spousal benefit anyway. Just as originally intended, employed women shore up the system by making contributions that have no net benefit for them. As a result, couples that earn equal amounts over time can receive different benefits. If Mr. Smith earns the entire $3000 monthly income for he and his wife, but Mr. Jones and Mrs. Jones each earn $1500, the Smiths will get Mr. Smith’s 100% retirement benefit plus 50% more for Mrs. Smith. The Joneses each receive 100% of their own benefits – which is the same amount due to Mr. Smith alone. At retirement the Smiths will get over 30% more in benefits than the Joneses. In an era where most women work at some time or another, couples who earn equal amounts of family income should be entitled to equal benefits from Social Security, regardless of how they shared the responsibility for paid work between them.

The Social Security Council also designed the fifty percent spousal benefit to reward married men by giving them a bonus if they had a “dependent” wife, rather than treating the wife as an equal partner. If a couple stays married, in most instances the husband receives his check for one hundred percent and the wife receives hers for fifty percent, leaving him in control of 2/3 of that portion of their retirement. As the higher earner, he’s also likely to be in control of the majority of the private retirement accounts with no requirement for spousal consent for investment or withdrawal. If a couple divorces before the 10 th year, a mother who gives up earnings to care for children, has no claim to any of the Social Security benefits that she helped her spouse earn by caring for the family during the marriage. If a couple divorces after the 10 th year, the husband will receive his one hundred percent benefit, and she’ll at least have claim to her fifty percent benefit – just 1/3 of what the total household benefit would have been.

The private accounts proposed by the President’s Commission to Strengthen Social Security apply a community property principle to all accounts in the event of divorce. However, during a marriage, a spouse could direct – without spousal consent - some of his Social Security contributions into a private account, thereby decreasing the contributions that are used to calculate the other spouse’s Social Security benefits. The resulting private account is under the complete control of the contributing spouse, again leaving the lower-earning spouse a dependent as opposed to an equal partner.

A marriage is a promise of equal partnership and an acknowledgement that each spouse contributes to their joint ability to acquire assets. Any retirement system should honor that promise and ensure equity for spouses both during the marriage and in the event of divorce in terms of control and ownership of retirement assets acquired during the marriage.

The Council also designed Social Security to encourage men to work by relating benefit levels to years worked and income earned. The wife gained security as a dependent by staying married. The original designers wouldn’t be surprised to hear that in 2000, women’s average monthly retirement benefit was $697 and men’s was $904. By tying benefit levels to paid work, in effect Social Security jeopardizes women’s personal autonomy and penalizes anyone who sacrifices earnings in order to care for others. Mothers have less in private retirement savings and get lower Social Security retirement benefits because they forgo earnings in order to have time to care for others. Even when mothers work full time, the wage gap between mothers and everyone else has widened. They are less likely to take jobs which require substantial overtime and more likely to take lower paying jobs with regular hours and flexibility. The majority of part-time workers are women, and part-time workers earn 40% less per hour for doing the same work as full-timers. Of married women with children under 6, only about 35% worked full time, full-year in 1998. Women and mothers also take more time out of the workforce. Of workers retiring in 1998, women worked a median 29 years while men worked 38. Since Social Security benefits are calculated using the 35 highest earning years, mothers who work the median 29 years will have 6 zero years averaged into the calculation of benefits.

Social Security, as part of its promise to retirees, must count unpaid care work as a “contribution” to our economy and to society and protect the economic security of those who care precisely because private retirement vehicles cannot account for unpaid work. Our society and our economy couldn’t function without this unpaid labor. Unless Social Security benefit levels are related to all work - both paid employment and unpaid care work - we are choosing to penalize motherhood and anyone who takes the time and energy to care for others.

For the past 65 years, people have been proposing fiscally responsible solutions that embrace these values such as requiring spousal consent for control and withdrawal of retirement assets, crediting lower earning spouses and single parents who provide care with an amount of credit toward Social Security, allowing for a number of “drop-out” years for a lower earner or single parent who sacrifices earnings to care for children or elderly, or “earnings sharing” which would credit each spouse with half of the total household contributions to both Social Security and private accounts. The solutions are there if the will to implement them is there. Women, mothers, and anyone who believes in the values of protecting those who care for others, equity for men and women in a marriage, and equity between married households must make sure that the real Social Security “crisis” gets addressed before another 65 years passes by.