Social Security's Double Whammy for Caregivers
Your thoughts on how to remedy the way unwaged service is shortchanged
This week, I have a roundup of your comments on how caregivers are left out of social security calculations. Next week, I’ll have a collection of your comments on studying how men and women differ.
Some weeks, I include short excerpts from many comments, but this week, I wanted to primarily spotlight one.
Katie posted a substantial, thoughtful comment about how her own volunteering and care work leaves her out of Social Security’s judgement of worthwhile work. I’m excerpting her remarks below, but it’s worth reading the whole.
This past week, while keeping up with our household finances and bills and such, I fell down a rabbit hole and was literally reading the Social Security Administration's retirement benefits website, for the first time suddenly curious about how such rules might apply to me in particular. (I had a very modest salary for ten years, and have not earned income for the past six; my spouse's federal salary and pension support our family and have become the basis of how we plan to meet current and future needs.) I admit I was taken aback to realize precisely how that gap in income-earning time factors into the formula for benefits received. So I come to this post energized and a bit indignant!
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After cruising the SSA site, I felt compelled to tally up the economic value of the administrative skill and leadership I've been donating to a nonprofit organization in recent years, after choosing as a parent of (then newly two and now busily three) young children to say farewell to that full-time paycheck. To my surprise, I average out to a consistent 0.25 FTE over more than six years. Had I been paid at the same rate as other part-time and quarter-time folks on staff, it would be an equivalent of >$10K/year or $2,500/quarter. That's a modest amount and nothing to stake a retirement decade or two or three on, but it's certainly enough to qualify for Social Security benefits.
So even taken separately from my caregiving role of parenting going on at the same time, that's 24 quarters of opportunity cost in the Social Security tally, in order to offer those skills freely for free as a volunteer gift in kind. Huh. It seems to speak to both sides of your "just vs achievable" conundrum, because I have worked consistently, unpaid, for the common good, in an institution where others DO earn income/SS credit when officially on the payroll; and I have also been investing my time and energy as a parent of young children. None of that is on the radar for federal retirement benefits. (And all of it I embrace with warmth and energy; but it's human capital that disappears entirely from the "market".)
This is the core problem with pegging Social Security to wages, when we know wages are a poor measure of the value of work. You can make more doing trivial, even terrible things for rich people than necessary things for poor people, because rich people have more money to throw at a problem.
I really enjoyed my work at a remittance company, and I thought the company did a tremendous amount of good (it was founded as a for-profit effective altruism venture). It’s my highest salary to date, because it worked with a lot more money than other places I’ve worked. If I’d done the same work for a charity serving the poor, I might have still been doing good, but on paper, the worth of my work would be much lower.
It’s strange for Katie’s volunteer work to be valueless in the eyes of the algorithm, when it of substantial benefit to the non-profit. (Double benefit, both of her work and the forgone wages). But it’s hard to imagine how to tabulate it.
That’s why Martha suggested eliminating the idea you “earn” your Social Security benefit, and simply offering a flat UBI to all. I’m skeptical of such a major shift, but I am pretty unsure of how to quantify unpaid work in a way that the government could recognize.
And one last comment to highlight, Catherine on the practicalities of preparing to offer memory care to a loved one:
Part of our own talking with family and friends, and planning for our own old age (if we're lucky enough to reach it)—is planning for the possibility of memory loss and confusion. Learning together how to visit someone experiencing this, how to arrange for care in the home (lots of options for this even now), how to care for someone to provide high quality of life at home or away from home. Share our memories so we're creating "memory banks" for our care partners to dip into if we can't. Make sure our family and friends know the music we loved as teenagers and young adults—because that's the music that will help us most. Make sure that potential care partners know what you loved to do as a child and teenager and young adult—because many of those things can be adapted to bring you joy even if you have memory loss and confusion.
I appreciate Catherine’s clear examples, and it’s a good portrait of what skilled work it can be to comfort others.
This is tricky. UBI would be the fairest way to do this. You may be skeptical of UBI but Social Security is tied to wages because you pay through your wages. For example, I do modest work as an independent contractor for a nonprofit and pay a decent chunk of that money to social security (both the employee’s and the employer’s contribution.) This amounts to 12.4%, and I also pay out 2.9% for Medicaid. So with $10,000 in income , I am paying more than $1500/yr into the system. The only other alternative I see is allowing people to buy into the system without salary and receiving a commensurate benefit in the future. Or perhaps this social security benefit could be something like the student loan forgiveness programs, where the government subsidizes qualified service with a stipend to cover a social security contribution. Our representatives seem very tied to paid work as a public good for all (including mothers in the fourth trimester apparently) so it is hard to envision public support. I think perhaps allowing people to buy social security credits (with a similar rationale as Spousal IRAs) might be the most palatable.
Katie's arguments are persuasive, and important. If volunteers are doing the equivalent of paid work for non profits and aren't getting the salaries that enable Social Security credits, either they should become paid employees (for whom Social Security payments made) or they should get Social Security credit anyway even without the payments being made.
I definitely support the first, and I'd be willing to support the latter. The latter would be easiest, I think. Proof of volunteer work would enable the person to file for Social Security credits each year.
I'd also support caregivers getting Social Security credits too.