Social Security Needs to Give Credit for Caregiving!

Today is the 78th birthday of Social Security. As part of the celebration NOW’s Say It Sister! blog has organized a blog and twitter carnival. Central Oregon Coast NOW is one of the followers of my blog AND one of today’s bloggers for this carnival. Amanda LePine, a member of Central Oregon Coast NOW raises a very good demand – GIVE credit to Social Security for Caregiving. Which I agree with. I discussed this very issue, presenting such a proposal to strengthen Social Security towards the end of my posting this morning.
Working together, we may get this done. It may take a while as we will need to replace the Tea Party members of Congress who want to eviscerate our safety net. But we will get it done. Meanwhile check out some of the other blogs on this issue today at National NOW’s Say It Sister! blog.

Central Oregon Coast NOW

By Amanda LePine

Member, Central Oregon Coast NOW

Many women are in the same circumstances that I am in!

None of the extensive work I do on my husband’s behalf is reflected in my Social Security benefits. 

My Social Security benefits are greatly diminished because I stayed home to raise my two children.

After they were grown, then I went to work in health care. 

In January of 2006 my husband had an Agent Orange-related stroke.

Any opportunity I may have had to work evaporated.

My husband needs a caregiver all day every day. 

As his sole caregiver I work 24/7.

I haven’t had a full night’s rest since 2006.

Any negotiations with the Veteran’s Administration are taken care of by me.

For all appointments I’m the decision-maker, and I drive and accompany my husband.  All of my work goes unrecognized by Social Security.

 

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Let’s Strengthen, Not Weaken Social Security

Social Security.  It’s been around for 78 years.  It’s a benefit that everyone (and their family members) who has worked in the United States is eligible to receive. You pay into the system when you are working and then when you retire or become disabled, you, your spouse, and your dependent children receive monthly benefits based on you earned income history.  Currently almost 58 million Americans receive $816 billion annually in Social Security benefits.  Most (70%) are retirees and their family members.  The rest are either disabled (19%) or are survivors (11%) of a deceased spouse or parent who would have otherwise qualified for Social Security.  We all like, expect, and will, if not already, depend upon Social Security to sustain our financial well-being and independence.

Dwight D. Eisenhower Supported Social Security

Yet it is under attack.  And has been for almost a decade.  Until 2005, both political parties fully supported Social Security.  President Dwight D. Eisenhower in a letter to his brother Edgar on November 8, 1954 said:

Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.

This was right after he responded to a letter to a constituent shortly after signing a bill into law expanding Social Security.  In that letter dated September 30, 1954, President Eisenhower said:

The actual fact is that by and large the productivity of a national economy must [emphasis added], at any given time, support the people then living in the nation. This means that, roughly, the people from twenty to sixty bear the burden of supporting themselves, and in addition, support those from birth to twenty years of age, and those from sixty to eighty.

The Three-Legged Stool

At that point in our history, both sides of the aisle fully supported the idea of Social Security as the third leg of the financial stool (the other two legs being pensions and savings).

Over the years fewer and fewer people have had employment that contained a defined benefit pension.  And fewer people have retirement savings. People need all three legs.  With the other two legs being cut or chipped away at, Social Security remains potentially their only source of income should they retire or become disabled.

The Bush Administration Starts the Attacks on Social Security

The attacks on Social Security really started hard and heavy in 2005 when then President George W. Bush called for the privatization of Social Security and a redesign of Medicare that created the so-called “doughnut hole.”  I first started working on this issue that year, organizing a protest rally on the Penn State University-University Park Campus when Bush came to town to try to tell the Future Farmers of America that Social Security was a lost cause.

Over 500 people were at that protest.  Holding up signs like:

 

 2005 Rally at Penn State University Protesting the Privatization of Social Security

Bush is Wrong! Ike was Right! Hands Off My Social Security: 2005 Rally at Penn State University Protesting the Privatization of Social Security

  • Hands Off My Social Security
  • Bush is WRONG!
  • Ike was RIGHT!
Sign at Protest that says: "No! No! No Social Security Privatization Fiddle"

2005 Rally at Penn State University Protesting the Privatization of Social Security

  •  No! No! No Social Security Privatization Fiddle and

 

Banner at 2005 PSU Protest saying: "Social Security: Don't Gamble with Our Future"

Don’t Gamble with Our Future: 2005 Rally at Penn State University Protesting the Privatization of Social Security

  • Social Security: Don’t Gamble with OUR Future (referring to privatizing and placing Social Security payments in the volatile stock market).

Organizations and individuals fought back and Social Security was not privatized but Medicare was compromised when the prescription drug benefits (Part D) were written into law in 2006. This hole forces individuals on Medicare in 2013 to pay 100% of their drug costs once  you reach their Medicare Part D plan’s initial coverage limit of $2,970 and ends when you spend a total of $4,750.

This was the opening gambit to destroy Social Security. These attacks are continuing to this day.  Now it is the Tea Party Republicans who are doing the attacking.  And if they succeed, women and people of color in particular will pay the penalty.

The Seven Principals to Strengthen Social Security

Rather than decimate our safety net that we all paid for and for which we are due, we should be strengthening rather than weakening Social Security. According to StrengthenSocialSecurity.org – a coalition of over 300 national and state organizations representing over 50 million Americans, there are seven principles to fully support and strengthen our Social Security system:

  1. Social Security did not cause the federal deficit; its benefits should not be cut to reduce the deficit.  And anyone who tells you Social Security is going broke is either misinformed or deliberately trying to mislead. The Social Security Trust Fund is viable through 2033.
  2. Social Security should not be privatized in whole or in part.  Unlike Wall St. and the stock market, Social Security is a reliable, risk free source of income. These benefits are guaranteed every month and are adjusted to the rise in the cost of living.
  3. Social Security should not be means-tested.
  4. Congress should act in the coming few years to close Social Security’s funding gap by requiring those who are most able to afford it to pay somewhat more. This means that the cap on payment into Social Security should be lifted for higher income individuals.
  5. Social Security’s retirement age, already scheduled to increase from 65 to 67, should not be raised further. Increasing the retirement age disproportionately affects low-income women. The life expectancy for low-income women has decreased over the last 25 years and they are more likely to have jobs that compromise their health. Increasing the retirement age would amount to a 15% benefit cut for low-income women workers.
  6. Social Security’s benefits should not be reduced, including [benefit-reducing] changes to the COLA or the benefit formula. Republican leaders want to impose a less accurate COLA formula – the chained-CPI. The current COLA (Cost of Living Alliance) formula is based on the Consumer Price Index (CPI) which estimates the price of stuff we need (like food) changes over time.  The chained-CPI assumes that when the prices of something goes up, people will automatically replace it for something cheaper (e.g., beef would be substituted with chicken and maybe even eventually with dog food); therefore the COLA can be calculated at a lower rising level.  That con only work for the short-term since in some cases (e.g., health care) there are no substitutes and for others (e.g., the food example), people either can’t or won’t go that far without compromising their lives. Over a 30-year retirement, that means that a person would be losing a full month’s worth of Social Security every year. For senior women who often don’t have extra savings or a pension, the gap between their regular expenses and what would be covered over time under a chained-CPI would be disastrous.
  7. Social Security’s benefits should be increased for those who are most disadvantaged. This would include low-income workers, LGBTQ families in states that don’t recognize same-sex marriages, college students whose working parent has died, and people who have to drop out of the workforce to provide caregiving to their family members.

Increasing the Benefits for the Most Disadvantaged

I’d like to look at this last principle in more depth by focusing on women and Social Security because women make up the combined majority of people in these four groups.  So, why should benefits for these four groups be increased?

Low Income Workers

Low Income workers are disproportionately made up of women and people of color. Living hand to mouth, this group of working-age people have little ability to build up any retirement savings.  So one leg of the stool is cut very short.  And unlike high-income workers who worked at a company with full benefits, they are less likely to have any retirement pension at all.  The second leg is also cut very short. As a result, nearly 80% of a low-income worker’s retirement income is made up entirely of Social Security benefits.  And because of the cutbacks in Medicare with the aforementioned doughnut hole, this group of retired people – mostly women who live longer – are further squeezed.  This group of retirees, rather than having their livelihood threatened by a chained-CPI reduction should, instead have and enhanced benefit by creating a Special Minimum amount of Social Security benefits for lifetime low-income earners.

In 2012, the National Organization for Women Foundation, the National Committee to Preserve Social Security and Medicare, and the Institute for Women’s Policy Research released a report called “Breaking the Social Security Glass Ceiling: A Proposal on How to Modernize Women’s Benefits.”  This report presents a proposal to enhance this baseline level of Social Security benefits for low-income workers. They suggest improving the Special Minimum Benefit by:

  • Increasing the benefit to equal 150 percent of the aged poverty level for workers with 30 years of credit;
  • Reducing the wages required to receive a year of credit toward the minimum benefit to the amount required for four Social Security credits;
  • Indexing future increases in the minimum benefit to growth in wages rather than the CPI;
  • Providing up to ten family service years of credit toward the computation of the benefit; and
  • Increasing the Supplemental Security Income (aka SSI) general income exclusion to $100 and adjust it in future years for inflation.

LGBTQ Families

In June, the US Supreme Court, in a case known as United States v. Windsor, overturned the federal Defense of Marriage Act. They declared that committed same-sex couples who have had their relationships legally recognized as marriage must receive all of the federal benefits, including Social Security, associated with legally-recognized marriages.

Same-sex couples, who live in states that don’t recognize their marriages, however are currently out of luck.  In the 37 states without marriage equality, same-sex couples and their families are considered legal strangers. A same-sex household with one wage earner forfeits $675 monthly, the equivalent of two months’ worth of groceries for two people.

The Glass Ceiling report makes the following proposal to address continuing discrimination in these 37 states that don’t recognize same-sex marriages:

  • Amend the Social Security Act to define “wife,” and “husband” so that they no longer rely on gender-specific pronouns;
  • Provide eligibility to spousal benefits to individuals who are members of same-sex marriages, domestic partnerships, civil unions, or any other such relationship as the states, by law, may prescribe;
  • Extend to the children of these relationships, benefits under the same terms and conditions as children of heterosexual couples; and
  • Directly address the issue of disparate state-based DOMA laws by declaring that all federal family eligibility determinations under Social Security be exempted from the provisions of state-based Defense of Marriage Acts.

College Students and their Parents

Up until 1981, students attending college whose working parent had died, become disabled, or retired were eligible for Social Security benefits under their parent’s Social Security until they reached the age of 22.  That year, all post-secondary benefits were eliminated.  Most of the recipients of this benefit were disproportionately children of parents in blue-collar jobs, African-Americans, and those with lower incomes than other college students.  As a result of this change in the law, single parents—again most often women—would often defer saving funds for their own retirement in order to assist their kids through college. This decision results either in a a lower level of retirement funds for his/her parent(s) and/or a reduced likelihood of the student attending college if the parent and child are unable to fund the student’s post-secondary education.

The Glass Ceiling report makes the following proposal to address this issue:

  • Reinstate benefits for children of disabled or deceased workers until age 22 when the child is attending a college or vocational school on a full-time basis.

Caregivers

In addition to the disparity in pay between men and women, one of the main reasons women’s Social Security benefits are lower on average than that of men is that they are more likely to take time off from work to care for children or elderly and sick adult family members (spouses, parents, in-laws, and other family members).  The Social Security Administration uses a calculation known as the “average Indexed Monthly earnings primary insurance amount” (aIMe PIa) to calculate the benefit levels of all beneficiaries. Because of the way that the Social Security Administration calculates the benefit level, any temporary interruption in one’s income can significantly reduce how much Social Security a person can receive.

This affects single women as well as married women since both can and do have children and do have other family members that may need some care. Currently the only way to compensate for this care-giving duty is to provide the caregiver a spousal add-on benefit. This unfair treatment of caregivers in the Social Security formula needs to be changed so that we can continue to care for our family members without jeopardizing the financial security of the caregiver.  The Glass Ceiling report also addresses this issue by recommending a change in the way the aIMe PIa is calculated:

  • Compute the AIME PIA by imputing an annual wage for each family service year so that total earnings for the year would equal 50 percent of that year’s average annual wage index. Family service years would be those in which an individual provides care to children under the age of six or to elderly or disabled family members. Up to five family service years could be granted to any worker.

These Improvements are Affordable: With Some Changes

We can pay for these improvements, and simultaneously ensure the solvency of our Social Security system for 75 years or more. Changes to how Social Security could be funded are well-known. We just need to do it!  The funds for these changes are available IF we:

  • Remove the cap on wages subject to the Social Security payroll tax.  Rather than capping employee, employers, and the self-employed person’s payroll taxes on the first  $113,700 of income, the law should be changed to entirely remove this cap and require millionaires and billionaires to pay the same rate as the rest of us.  This one change would provide most of the needed resources.  According to Virginia Reno and Joni Lavery of the National Academy of Social Insurance, this option [by itself] would eliminate much of Social Security’s current actuarial deficit by producing revenue equal to about 2.17 percent of taxable payroll.”
  • Slowly increase the Social Security contribution rate by 1/20 of one percent over the next 20 years.  This option, according to Reno and Lavery “would provide revenue equal to 1.34 percent of taxable payroll.”
  • Treat all salary deductions like 401(K) plans.  Currently we pay Social Security and Medicare taxes on any retirement plan, such as a 401(K), a 403(b), or a 527 plan.  We do not pay these taxes on that portion of our salary we put aside to pay for any flexible spending account, such as a medical savings account.  If we were to  treat and tax flexible spending accounts just like our retirement plans, Reno and Lavery report that we would provide an about  an additional 0.48 percent of taxable payroll.

These three changes amount to 3.99% of payroll taxes and would fully close the current actuarial deficit (2.67 percent of payroll) according to Reno and Lavery.  The additional 1.32% would fund the proposals to strengthen Social Security as recommended in the Glass Ceiling report without hurting women, people of color, LGBTQ people, caregivers, college student, and low-income families.

The funds are there.  Let’s make it happen. Let’s strengthen, not weaken Social Security for everyone.

 

What is Equal Pay Day and Why Should I Care?

For the last three years, my local NOW chapter—Ni-Ta-Nee NOW—has organized community education events surrounding Equal Pay Day and paycheck fairness.

A frequent question we have is, “What’s Equal Pay Day and why should I care?”  To help answer that question, we have done op-eds and interviews with the local press (See here and here).  We also create a flyer that we update each year.  As President of Pennsylvania NOW, I wrote another blog on this issue in 2011. And elsewhere on my blog site, I have commented on the need for fairness in pay.

Today, we will once again be distributing Equal Pay Day flyers in front of the gates of The Pennsylvania State University over the dinner hour today.

Why today? Because Equal Pay Day moves from year to year. For 2013, that day is April 9.

The following is a web-based version of this flyer.  The hard-copy version focuses on Pennsylvania.  I have kept that information here; I’ve also added commentary and links for information and contacts in other states.

TUESDAY APRIL 9TH 2013

EQUAL PAY DAY

IT’S THE DAY ON WHICH WOMEN’S WAGES CATCH UP WITH MEN’S WAGES FROM THE PREVIOUS YEAR.

Equal Pay Day symbolizes how far into the year a woman must work full-time, on average, to earn as much as a man earned the previous year.  In 2013, it took 2 days MORE than in 2011 and 8 days LESS than in 2012 for a woman to earn as much as a man earned in the entire year.

THE WAGE GAP

National Perspective

The wage gap shows that women, particularly women of color are paid significantly less than white men.

The Wage Gap: Lack of Equal Pay

The wage gap is the ratio of women’s to men’s median annual earnings for full-time, full-year workers. Based on these earnings, women earned just 82% of what men earned (US Bureau of Labor Statistics, 2013).

Nationally, Asian American women have the smallest wage gap, earning 88% of what the average white man earned in 2012. White women are next, earning approximately 81% of white men’s average income. African-American women (68%) and Hispanic women (59%) have the largest wage gaps compared to white men (Institute for Women’s Policy Research, March 2013).

A typical woman earns $431,000 less in pay over 40 years due to this wage gap. (Center for American Progress, 2012)

At the current rate of progress, the Institute for Women’s Policy Research estimates that it will be 2057 before women’s wages reach parity and Equal Pay Day will finally be on December 31 rather than somewhere in April of the following year!

Pennsylvania Perspective

The wage gap is just as bad, if not worse, in our state. When ranked among the other 50 states, the District of Columbia, and Puerto Rico, Pennsylvania’s wage gap placed it 34th (Women’s Law Center calculation based on American Community Survey Briefs, April 2013).  You can look up your state’s pay equity ranking at this site as well if you don’t live in Pennsylvania.

The median annual income for a woman working full-time, year round in Pennsylvania in 2011 was $37,089, compared to men’s $47,956. This is a wage gap of 77% (Women’s Law Center calculation based on American Community Survey Briefs, April 2013). A typical woman in PA earns $459,000 less in pay over 40 years due to this wage gap. This gap rises to $722,000 for women who have earned college degrees. (Center for American Progress, 2010)

WHAT CAN I DO??

If You are an Employer

If you are an employer, you can get help in examining pay practices by conducting an equal pay self-audit using the guidelines from the US Department of Labor (available at www.pay-equity.org/cando-audit.html).

If You Believe You Are Experiencing Wage-Based Discrimination

Tell your employer if you are being paid less than your male co-workers. Click here for some tips on negotiating for pay equity.

If there’s a union, ask for their help.

If discrimination persists: There are three places to file complaints – at the federal level, at the state level, and at the local level.

At the Federal Level

You can file under federal law with the Equal Employment Opportunity Commission (EEOC). Go to this link and follow the instructions.

At the State Level

You can find your state’s anti-discrimination agency website and contact information in a pdf file created by Legal Momentum starting on page 28.  Most of the agencies have a website address that you can copy and paste into your browser.  All of the agencies have a phone number that you can call for assistance.

If you live in Pennsylvania, you can file a complaint with the Pennsylvania Human Relations Commission in Harrisburg.  Contact information is available by region.  Just go to their website and look for your county’s name.  The phone number and address for your regional office is listed directly above the names of the counties served by each office.

At the Local Level

There are a few communities throughout the country that have created local ordinances that include the state-based anti-discrimination protections and have also expanded coverage to other areas (such as protections based on sexual orientation, family status, and/or family responsibilities across the life-span).

You should therefore check to see if your local county, city, or community has an ordinance providing similar protections for wage-based discrimination. If so, you can more conveniently file a wage-based complaint at the local level.  Check with your state’s anti-discrimination agency (see info above under “At the State Level”) to see if there is a local ordinance in your community.

In Pennsylvania, there are about 30 communities with such an ordinance. Your regional office of the Pennsylvania Human Relations Commission can give you this information, along with whom to contact.

One of these 30 communities in Pennsylvania is State College, PA, where the main campus of The Pennsylvania State University is located. Their ordinance covers wage-based discrimination based on sex as well as color (race), religion, ancestry, national origin, sexual orientation, gender identity or expression, familial status, marital status, age, mental or physical disability, use of guide or support animals and/or mechanical aids.  If you work within the State College, PA borough, you can file a complaint with them under their Employment Anti-Discrimination Ordinance at 814.234.7110 (Side note: I was one of the people instrumental in crafting this ordinance).

Supporting and Advocating for Paycheck Fairness

Ask your Congressional representatives to co-sponsor the Paycheck Fairness Act – HR 377 in the US House of Representatives and S 84 in the US Senate).  The Paycheck Fairness Act updates and strengthens the Equal Pay Act of 1963. It gives women the tools they need to challenge the wage gap itself.

You can find out where your representatives stand on the Paycheck Fairness Act by going to http://thomas.loc.gov/home/thomas.php. In the search box in the middle of the page, type in “Paycheck Fairness Act” and click search.  On the next page, two bills will show up—SR 84 and HR 377.  This page provides several links to information about both of these bills—text, bill history, co-sponsors, etc. If you click on “cosponsors” for each bill, you can determine if your representatives are publicly supporting the bill or not. If they are a sponsor, thank them and then ask them to call for a hearing on vote on the bill.  If they are not, ask them to sign on.

And For More Information

Visit http://www.pay-equity.org – the website created by the National Committee on Pay Equity (NCPE).  NCPE is a coalition of women’s and civil rights organizations; labor unions; religious, professional, legal, and educational associations, commissions on women, state and local pay equity coalitions and individuals.”  They are dedicated to ending wage-based discrimination and achieving pay equity. If you like what they are doing, you can join and become a member.