Why Women Can’t Save Social Security

In what I assume is supposed to be some sort of clarion call for younger generations, the Boston Globe points out this tidbit in the Social Security debate:

Fear-mongers like to tell young people that when they get old, there won’t be as many young workers to pay into the Social Security system. But think about this: A generation ago, most women didn’t work outside the home. As a result of more women joining the labor force, we’ve seen sharp increases in the share of the adult population at work. The correct ratio isn’t young people to retirees; it’s workers to non-workers. On that count, with more women paying into the system, we are doing better.

Indeed, let’s “think about this.”  First, I should point out that it is going to be difficult to further reasonable debate and find a workable compromise if those citing factual population statistics are going to be demonized as “fear mongers,”  especially when coupled with a bold assertion about some “correct ratio.”  However, this particular assertion hardly needs any statistical data to fall on its face since “young people to retirees” changing to “workers to non-workers” hardly creates the drastic demographic shift needed to correct the funding problem.  It’s six of one, half a dozen of the other.

The plain truth of the matter is that the demographic changes facing our country are from younger to older.  In 1900, the 5 and Under population in the United States was 12.1% while 65 and Over was 4.1%.  In 2000, 5 and Under accounted for 6.8% while the 65 and Over reached 12.4%!  (Source)  The pool of future “workers” is shrinking while the pool of future “non-workers” is growing, but apparently it is fear mongering to point out this fact of reality.

So how do women factor into all of this?  Well, between 1950 and 1999, the labor force grew by 77.2 million people, of which women accounted for 60 percent. More recent numbers from the Bureau of Labor Statistics (pdf) show the percentile of women in the workforce are near parity with men when not actually exceeding them. In 2008, women between the ages of 45 to 54  were the largest percentile of workers.

In other words, there is not some untapped pool of female workers that can magically get Social Security out of its financial bind, because increasing the number of female workers hasn’t and isn’t altering the number of future retirees entitled to Social Security benefits.  Women who joined the workforce in the last 60 years have already saved Social Security, but the surplus women helped create has already been spent.

Overblown hyperbole, distorting the demographics, switching labels and demonizing statistics isn’t going to solve the Social Security crisis, but solutions will be impossible if denying reality is allowed to pass for reasonable debate.

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2 Responses to Why Women Can’t Save Social Security

  1. roopost says:

    Drae,

    Certainly another consideration must also be in increased span in which people will work. While the notion of retirement may seem a positive, reality often holds that retirement holds less attraction once achieved. Many, except perhaps in France, opt to continue working – even in other jobs from those they have returned from. Pensionable age may not necessarily mean pensioner.

    Kind regards,

  2. Drae says:

    One of the main reasons to increase the retirement age is increased life spans – meaning longer retirements. But a delayed retirement won’t have much impact on the shortfall in Social Security revenue nor would the financial well being of the future “non-worker” be improved since the tax rates on labor earnings is higher than it is for Social Security benefits.

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