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If Social Security Treated Caregiving as Work...
Our retirement safety net doesn't value the people who provide support to others
Other Feminisms turns one year old this weekend! I’ll have some special posts coming up to celebrate and reflect a little on the past year and the year to come. This week, I want to return to one of the earliest topics we discussed: how does the pay we set for different kinds of work reflect what we value?
Stephanie H. Murray has an excellent piece up at The Atlantic on how the formula for Social Security benefits systemically shortchanges women and all caregivers.
When you retire, the amount you receive in Social Security each month is a percentage of your average income during your 35 highest-earning years. Those with meager work histories may be entitled to a spousal benefit equivalent to, at most, half of what their current or former spouse receives each month. By design, this system penalizes anyone who, at any point in their life, works part-time; chooses a lower-paying, family-friendly job; or stays home to care for their children. Because women are more likely to do all those things, they inevitably receive smaller payouts than men. The average retirement benefit for men is about $1,600 a month, roughly $300 more than the average woman receives. My mom’s spousal benefit will amount to about $650 a month if she waits until she’s 67 to claim it, compared with my father’s $1,300. The fact that women enter retirement with fewer resources and are entitled to fewer retirement benefits puts single, widowed, and divorced mothers at a particularly high risk of poverty in old age.
As she points out, Social Security depends on two sources of income to be able to pay out benefits:
The money paid in by current workers.
The existence of future workers, who will themselves pay in to support the people supporting today’s retirees.
Americans are rewarded for contributing to (1) but not to (2). Your benefits increase with the amount you earned (and thus, the amount you paid in through your taxes), but parents don’t receive any additional bonus for helping to stabilize the system by having kids. Instead, they get a double whammy—making less in the present as they step back from work, and receiving less in the future when their benefits are scaled to their diminished earnings.
There may not be a complete solution to this problem, but Murray suggests a pretty doable improvement. Many European countries offer “caregiver credits” as part of their public pension programs. Women’s time spent mothering is rewarded as valuable work—work we all depend upon—and they are pensioned accordingly.
This kind of credits program could be expanded beyond caregiving, to fold in volunteer work or other kinds of work where the pay is lower than the value of the work. We’d be pricing the positive externalities of care back into our safety net.
Before I get an economics objection here, I think there’s a common class of work where the pay cannot approach the value provided: when you provide something desperately needed to people who cannot afford it.
This might be providing medical care or legal aid to indigent clients or helping someone navigate a complicated bureaucracy to get the benefits they’re entitled to. The work is worth doing, but the “customer” is too cash poor to pay for that value. Someone else has to step in to subsidize the work, whether it’s a religious order, a non-profit, or the government.
In some ways, this is what programs like the Public Service Loan Forgiveness Program are meant to do—to provide a big subsidy to people who choose to forgo a heftier paycheck in order to provide more urgently needed service.
Unfortunately, the PSLFP has been administered disastrously, making promises to undergraduates with so many caveats and secret hurdles that very few of the people who had reason to believe they were enrolled have actually had their loans forgiven.
That makes me think that a just response might be a wider use of “social good” Social Security credits for unpaid or poorly paid work, but the achievable response might be to offer several years of credits to parents who spend time out of the workforce. The easier it is to determine who qualifies, the less paperwork and fewer barriers there are for the people who need the benefit most.