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An Unbalanced Debt Deal: Cutting Vital Programs Does Not Address the Deficit

The deal to raise the debt ceiling that may or may not have been reached between President Obama and Speaker of the House John Boehner should be rejected by members of the House and Senate if it is as unbalanced as is being reported in the press. Supposedly it includes no tax increases and that makes it unbalanced on its face. Rather it includes a promise of future tax reform in exchange for immediate cuts to vital programs.

In general, the White House has been trying to get agreement with Republicans in Congress to balance budget cuts with tax increases as a way to tame annual deficits and contribute to bringing the accumulated debt down as a share of Gross Domestic Product (GDP). The White House was asking for $4 trillion in cuts and revenue increases over 12 years, but numbers discussed recently are somewhat more modest and talk of cuts, not tax increases, has dominated.

While the Republicans have refused to accept tax increases, the President has been willing to put large cuts on the table, even suggesting significant cuts in well-loved programs such as Social Security and Medicare. This inclination exists despite the White House’s insistence that Social Security does not contribute to the budget deficit and its Trustees projection that the program will have sufficient funds to pay benefits in full through 2036, even if no changes are made. While Medicare’s future shortfalls are expected to contribute to future budget deficits—if health care costs are not brought under better control—the Trustees of the two plans project that Medicare can pay all benefits through 2024, and an Actuary Office within DHHS moved their estimate from 2017 to 2029 due to the passage of health care reform, even if no further changes are made on the benefit or revenue side.

Any deal that makes significant cuts to the benefits provided by these programs should be rejected. Women are the majority of those receiving benefits from both Medicare and Social Security, primarily because they live longer than men and these programs primarily serve those in their 60s and beyond. IWPR research shows how much women rely on Social Security. More than two-thirds of all women aged 65 and older rely on Social Security for half or more of their income. For men that age, the share is more than half.

Among the cuts to Social Security that may be included in the deal, as reported in the media, is a shift in the cost of living adjustment (COLA) to a smaller measure of inflation which is less accurate than the current price index used to adjust Social Security benefits. Health and aging experts agree that elders face higher than average price inflation because they consume so much health care, yet the proposed switch to the “chained CPI” would reduce benefits.  According to the National Women’s Law Center (NWLC), at age 65 the chained CPI would reduce benefits by 1 percent and, by age 95, it would result in a 10 percent reduction of benefits. Women are twice as likely as men to live to age 95, meaning a benefit cut that accumulates over time, as the chained CPI does, would especially hurt women.

Raising the eligibility age for either Social Security or Medicare amounts to a disastrous cut to seniors and future retirees, who have paid for these benefits throughout their lives. Every one year increase in the eligibility age for Social Security amounts to a seven percent cut in benefits across the board. Lack of health insurance is an enormous problem for older adults. Rates of employer-sponsered health insurance coverage decline beginning at age 50—and continue to decline until the Medicare eligibility age (65) is reached. Raising the eligibility age for Medicare would prolong the period without insurance coverage that many experience just as their health care needs are increasing.

The debt ceiling needs to be raised to enable the federal government to meet obligations it has already incurred. Congress has already approved the budget expenditures that require the ceiling to be raised and they should lift the debt ceiling to allow the budget they voted for to be fully implemented.

Cutting essential programs that do not contribute to the deficit now and will not for at least a decade is a completely unnecessary part of any deal on the debt ceiling. There are many ways of bringing the nation’s debt under control without attacking programs that Americans rely on for survival. Moreover, Americans strongly support these programs and would be willing to pay more in taxes if necessary to preserve current levels of benefits.

Members of Congress who vote for cuts such as these may well find that voters do not agree with their actions.

Heidi Hartmann, Ph.D., is the President of the Institute for Women’s Policy Research. he has published numerous articles in journals and books and her work has been translated into more than a dozen languages. She lectures widely on women, economics, and public policy, frequently testifies before the U.S. Congress, and is often cited as an authority in various media outlets.

National Council of Women’s Organizations Launches “Respect, Protect, Reject” Campaign

By Heidi Reynolds-Stenson

In effort to reach a budget deal by the debt ceiling deadline on August 2, leaders in Congress have indicated they are willing to make cuts to vital programs such as Social Security, Medicare, and Medicaid. The cuts would harm women and families who rely on these programs for their survival. In response, the Older Women’s Economic Security (OWES) Task Force of the National Council of Women’s Organizations (NCWO) launched a nationwide campaign, “Respect, Protect, Reject 2012.”

Through a public petition, the task force is asking lawmakers to respect women’s contributions to the economy and their need for economic security, protect Social Security, Medicare, Medicaid and other programs that are vital to women, and reject any budget plan that will impoverish vulnerable women and families. The task force wrote to congressional leaders on Tuesday to warn of the consequences of cuts to such programs for women and for the national economy and to urge the leaders to “place women’s circumstances and concerns at the center of their analysis and response.”

To help spread the word about the new campaign and bring more attention to these issues, NCWO held a conference call on Tuesday, July 12 moderated by NCWO Chair Susan Scanlan. On the call, Congresswoman Donna Edwards of Maryland’s 4th District—who recently signed onto a letter with 69 other Democrats urging President Obama to oppose cuts to Social Security, Medicare, and Medicaid—emphasized that although the national debt clearly needs to be dealt with, it is important that it not be done at the expense of critical social safety net programs. She explained that for many of her constituents, women in particular, “Social Security is their security. Social Security is their groceries…It’s their day-to-day-expenses and so it’s not an option.”  

National Organization for Women (NOW) President Terry O’Neill reminded leaders to look not to Social Security, Medicare, and Medicaid when deciding how to reduce the national debt but to what is really contributing to the national debt— joblessness (because less jobs means less income tax revenue), Bush-era tax cuts for the wealthy, and unfunded wars. She also shared a startling statistic—if the chained-CPI adjustment is made to Social Security, 73,400 more people will be in poverty by 2020 as a result, over 54,000 of which will be women.  Asked by a reporter if she thought everything should be on the table in the debt negotiations, O’Neill responded, “Emphatically, no. We do not agree.”

Joan Entmacher, Vice President for Family Economic Security at the National Women’s Law Center (NWLC) brought attention to how much women have been suffering in the recovery since the end of the Great Recession.  While men have been gaining jobs since the end of the Great Recession, women have actually been losing jobs, mainly due to lay-offs in the public sector.  Cuts to vital programs will worsen an already difficult situation for women resulting from policies such as deregulation and taxes on the middle class.

Retired worker and member of the board for the Older Women’s League, Margie Metzler shared a moving personal story of what Social Security and Medicare have meant to her. Laid off at age 62, she found that no one was willing to hire an older woman. Without health insurance or family to support her, she began receiving Social Security, and then Medicare after she turned 65. Hearing talk of cuts to these programs terrifies Margie because she knows she has nothing to spare.  “The reality is they’re saying to me, ‘It’s perfectly fine if you just die.’”

Margie is committed to fighting for these programs that have been such a lifesaver for her and cautioned against reforms such as means-testing that might discourage women in need from applying for aid through programs such as Social Security. “I am not one of those people who says, ‘I have mine. I don’t care about the rest of you… I am going to be fighting for the people behind me,’” said Margie.  “From my standpoint, how can I feel anything but terrified and angry, but I also feel galvanized into action.”

Heidi Reynolds-Stenson is a Research Intern at the Institute for Women’s Policy Research.

Author Finds Technology a Tool Not a Solution in Bridging Divide

By Leah Josephson

People often describe the “digital divide” in terms of high-income individuals’ having access to cutting-edge technology that helps them thrive socially and economically, while low-income individuals are left out. The divide is often cited as a significant source of economic inequality.

At a recent event at Busboys and Poets, Dr. Virginia Eubanks, author of Digital Dead End: Fighting for Social Justice in the Information Age, critiqued this diagnosis as overly simplistic. The event was co-sponsored by the Institute for Women’s Policy Research, Teaching for Change, and DC Jobs with Justice.

Eubanks worked with a group of low-income women who are members of the YWCA community in Troy, NY, and asked the women what they needed. The main problem was not the digital divide. Instead, “more buses, less racism, and fairer employment” were the most popular calls for help.

Eubanks expected these women to have few technological skills. Instead, she found two-thirds of them already working in high-tech jobs, such as data entry or network administration. However, these jobs were low-paying, had few benefits, and were unstable. Technology was ubiquitous in their lives, but they could not use it to improve those lives.

Eubanks realized that simply providing technology and training is not enough to improve women’s lives. Rather, projects need to be designed to account for deeply ingrained racial and gender oppression.

Eubanks, informed by the belief that those closest to problems can best find solutions, worked closely with the women to identify their needs. They created a community technology lab for the YWCA, staffed and sustained by residents, as well as what Eubanks called an “Angie’s List for social services providers,” where the women could provide feedback on their experiences at local assistance agencies.

Even so, access to tech tools was not a high priority for the women. They were more concerned with the basic structural and cultural challenges that affected them on a daily basis—a lack of reliable transportation and workplace flexibility, coupled with racist attitudes.

Eubanks emphasized that technology in itself cannot cure these problems, but it can play a positive role. “We all have a stake in the creation of a more just information age,” she said.

Eubanks noted the creation of new, high-end jobs in technological development—touted by politicians including President Obama as the solution to our country’s economic woes—requires the support of more service industry positions in food service, hospitality, and retail. These lower-income jobs must be fair, provide benefits, and allow for work-life balance to meet the needs of workers.

IWPR has identified other basic benefits that can drastically improve the quality of workers’ lives in the shorter term. For women and their families, guaranteed paid maternity leave (the U.S. is one of only five countries worldwide that doesn’t require employers to provide it) and paid sick days could improve health, well-being, and economic stability.

Pay equity is another problem Eubanks identified. The women would often accept minimal compensation for high-tech jobs, hoping to gain the skills necessary for a higher-paid position. In a society where open discussion of salary is often taboo, these women had little opportunity to identify and express grievances, and only rarely advanced in the workplace.

“Technology is not a destination, it’s another site for struggle,” said Eubanks. In making technological advancements we should consider the quality of life of the workers who perform and enable it. Technology can contribute to a more just society, as long as the privileged consciously use it as a tool to support social justice, and not a ready-made engine of social progress.

Leah Josephson is the Communications Intern at the Institute for Women’s Policy Research.

Addressing Concerns of Immigrant Women Helps Communities Nationwide

by Claudia Williams

In recent years, the United States has experienced one of the largest waves of immigration in its history. The immigrant population has almost doubled since the 1990’s and the number of undocumented female immigrants has increased significantly. Immigrant women also make up more than half of new legal immigrants arriving to the United States.

While many immigrant women come to the United States in search of better opportunities, they are often vulnerable to poverty and discrimination and face many barriers in their day to day life, making it harder for them to achieve economic security and to advance in their careers.

Public policies are fundamental to integrating immigrant women into U.S. society. The U.S. Congress,  however, has failed to pass comprehensive immigration reform to address the complex challenges our current immigration system creates. In the absence of reform at the national level, many states and localities have introduced and passed anti-immigrant legislation. This is particularly unfortunate for immigrant women, who besides sharing risks with their male counterparts also experience particular difficulties that are more common or unique to them.

IWPR recently released a study that identified some of the challenges Latina immigrants face, such as limited proficiency in English, disproportionate exposure to violence and harassment, and lower earnings and rates of educational attainment. Also, as caregivers, immigrant women are more affected than their male counterparts by the lack of affordable and reliable child care and reproductive health services.

IWPR’s research also found that constant fears of deportation and family separation have led many immigrant women to live in the shadows. Immigrant women may be working “under the table,” without having access to quality jobs and educational opportunities, mainly due to their immigration status. Resulting economic instability prevents immigrant women from contributing fully to our society—we lose valuable resources that could help our country move forward.

Advocacy and service organizations working on the ground with immigrants recognize that an overhaul of the current immigration system is needed. However, advocates and researchers also need to focus more on the concerns of immigrant women. In most policy discussions little or nothing is said about how certain policies (such as the DREAM Act (Development, Relief and Education for Alien Minors), 287(g) and Comprehensive Immigration Reform) would specifically affect women. IWPR’s study found that the limited attention women’s issues receive is an important gap within the immigration grassroots and advocacy movement. Out of 280 organizations interviewed for the IWPR study, only eight advocated with a specific focus on the rights and needs of immigrant women.

A better understanding of women’s challenges and circumstances would represent an important step forward in filling this gap. Many of the issues directly affecting women also affect men and children, so addressing these challenges would be beneficial to the entire immigrant community.

Claudia Williams is a research analyst at the Institute for Women’s Policy Research.

Putting the Pieces Together: How Social Security Supports Black Women

by Mallory Mpare

The longer Social Security remains on the table for cuts as part of a comprehensive debt reduction plan, the more nervous those close to the program should be. And with good reason. Social Security was conceived as a protection against the risks—such as disability or lack of employment at older ages –that might lead to poverty. It is meant to work in conjunction with other retirement plans or savings as a critical piece of a comprehensive economic security plan. In the aftermath of the Great Recession and in the midst of economic recovery—when unemployment is high (9.1 percent unemployment as of May 2011)— it seems an especially inopportune time to discuss actions which might make people even more vulnerable to the very circumstances Social Security protects against.

While Social Security has benefited men and women of all racial and ethnic backgrounds and income levels, the impact of proposed cuts to Social Security on women of color is particularly troubling. Black women experience higher rates of poverty, are concentrated in low-wage jobs, have fewer employee benefits, and are less likely to work in jobs covered by pensions. This combination of circumstances makes black women particularly vulnerable to economic insecurity at older ages.

Following a fact sheet on the importance of Social Security to Latinas, IWPR released a fact sheet that describes the critical role Social Security plays in the lives of many black women. To begin with, the Social Security benefits received by black women are modest. Black women over the age of 62 average $961 per month in benefits as retired workers. Still, Social Security is the most common source of income for black women aged 62 and older—received by 49 percent of black women aged 62–64, 83 percent aged 65–74, and 88 percent of black women 75 years and older. In fact, a solid majority of black women aged 75 and older rely on Social Security for at least four-fifths of their income.

What would happen to these women if Social Security disappeared? Simply put, without the income received from Social Security many more black woman would live in families or as individuals with incomes below the poverty threshold. If you think this is an exaggeration (as some must, considering the attacks on the program), think again. Even with the program as it stands today, more than one in four black women aged 75 and older lives with an income below the poverty threshold. Without Social Security benefits, six out of ten of these women would live in poverty. When we talk about Social Security beneficiaries, images of the elderly are easily brought to mind. However, 26 percent of black women who receive Social Security do so not by consequence of reaching retirement age, but because of disability. This contrasts to the 12 percent of white women and 14 percent of all adult women combined who receive Social Security benefits due to disability and not age. In other words, for disability benefits alone Social Security is especially important to black women.

It is hard to tell when attacks on Social Security will stop. One thing is for certain: the puzzle of economic security is incomplete without a strengthened Social Security program.

Mallory Mpare is the Communications Fellow with the Institute for Women’s Policy Research.

Bad Economics Meet Paid Sick Days in Philadelphia

by Robert Drago

A new study for the National Federation of Independent Businesses (NFIB) estimates that Philadelphia’s proposed paid sick days legislation would cost employers between $350 million and $752 million annually. Both the factual basis and the assumptions underlying this study are seriously flawed.

The totals derive from two presumed costs: the amount for new paid sick days coverage, estimated at between 34 and 42 cents per worker hour in direct labor costs, and 38 cents per worker hour in compliance costs for employees who already have paid sick days.

Consider the new paid sick days coverage. The NFIB study assumes workers will use all of the days allowed—9 days annually for larger employers, 5 days annually for small employers. Their figures imply an estimated overall average of 8.35 days per year. However, from a recent, random sample of employees in San Francisco, which has had similar requirements since 2007, the average employee uses 3 days per year. This estimate agrees well with IWPR analysis of national data from the National Health Interview Survey (3.1 days used on average). Given the fact that workers use only 3 days per year, new sick days costs are overestimated by 64 percent in the NFIB study. The actual hourly cost range, using NFIB’s methods, is thus about 12 to 15 cents per hour.

The second source of costs is compliance expenses for employers who already offer paid sick days. Although it is not known exactly how many days most employers in Philadelphia offer at present, the Bureau of Labor Statistics estimates that the national average is 8 days per year for private-sector employees with one year of job tenure. It seems reasonable to assume that employees in Philadelphia with access to paid sick time use around 3 days per year, as do workers in San Francisco. These statistics suggest that there is likely to be little or no additional paid sick days use by employees who already have access to paid sick days. While there might be some start-up costs to bring company policies in compliance with the law, these will be a one-time cost.

The NFIB, however, claims the annual compliance costs will be 38 cents per hour for employers that already provide paid sick days. At that rate, an employer would be hiring one full-time employee at $15 per hour to track paid sick days for every 40 current full-time employees (the result of dividing $15 by 38 cents). An hour per week per employee to track sick time use seems like a serious overstatement. If the task of monitoring sick days use after passage of the proposed law took one extra hour per week per 40 employees (who already had paid sick days before the law was passed), a more realistic estimate, compliance costs would fall to about one cent per hour.

Using the NFIB’s own methods, with known facts and more reasonable assumptions, the hourly costs for new coverage drop to 12 to 15 cents per hour, and the costs of compliance for employers already providing paid sick days drop to one cent per hour. This suggests a far lower cost for implementation of the law than the NFIB study states, especially for businesses that already provide employees with paid sick days or an equivalent benefit.

It is almost enough to give one pause over the objectivity of the entire NFIB study.

Robert Drago is the Director of Research at the Institute for Women’s Policy Research.

A Partial Fix for Closing the Wage Gap: End Segregation in the Labor Market

by Barbara Gault

So, the wage gap is still going strong, even though women have surpassed men in terms of number of higher degrees received. Women are now more likely than men to get bachelors’ degrees, master’s degrees, and Ph.D.’s. Is it just a matter of needing time to catch up?

According to recent IWPR statistics, at the current rate of change it will take until 2056, or 45 more years, until we see equality. How do we accelerate change? One method is to equalize access to high paying jobs.

As IWPR’s new fact sheet, shows, the most common jobs for men and women are quite different. Of the ten most common jobs for men and women, there is overlap in only one. The best paid professions which are more common to  men are Chief Executive Officer (CEO), computer software engineer, and manager; the best paid professions more common for women are accountants, registered nurses, and elementary and middle school teachers. In the ten lowest paid occupations, close to two-thirds of workers are women, and in the highest paid occupations, two-thirds of workers are men. The proportion of women who are machinists, carpenters, and electricians hovered at below 10 percent between 1972 and 2009. Fewer than 10 percent of civil engineers were women in 2009.

And sex segregation is not improving. The index of dissimilarity, a tool that economists use to measure the degree of sex segregation overall in the labor market, found that in the 37 year period between 1972 and 2009 we saw progress in this area for the first 25 years, and then progress essentially dropped off starting in 1996 and continues to stagnate.

Women’s representation in some high paying fields, notably computer science, has actually gotten worse. Segregation in the labor force is a natural by-product of sex segregation in educational focus. Whereas in 1989 women were more than 30.2 percent of computer science bachelor degree recipients, in 2008 they were only 17.6 percent. Similarly, the proportion of math bachelor degree recipients that were women dropped in that same time period, from 46 to 43 percent. Engineering bachelor degrees increased, but only slightly, from 15.2 to 18.5 percent. On the other hand, women receive more than 70 percent of psychology degrees, and they are also the vast majority of degree holders in education.

We see the same gendered patterns in receipt of associates’ degrees. The percentage of women receiving associates degrees in computer and information sciences, engineering and engineering technology, and math and science, all dropped between 1997 and 2007.

An analysis released by IWPR yesterday found that of 111 occupations for which we had sufficient data, women earned less than men in 107 of them. These within-occupation wage gaps do reflect pure discrimination, but sex segregation can of course occur even within occupations. One of the largest wage gaps we found was in retail sales, where women only earn 64.7 percent of what men earn. 

In the Walmart vs. Betty Dukes case currently before the Supreme Court we hear stories of differential retail sales assignments being used as a justification for paying men more (men work in the tools department, which pays more, and women work in the cosmetics department, which pays less).

To end occupational segregation and the wage gap, there are clear steps that employers, policymakers, and even teachers and parents can take:

  • Education: Encourage girls and women to go into nontraditional, higher paying jobs.   The National Girls Collaborative provides access to an array of programs encouraging girls to pursue careers in fields of Science, Technology, Engineering and Math (STEM).
  • Unionization: Improve access to unions.  Unionized jobs have lower wage gaps.
  • Enforcement: Address issues contributing to hostile work environments through Department of Labor and Equal Employment Opportunity Commission (EEOC) interventions in order to eradicate this problem. Investigate common occupations with the highest sex segregation, and those with most profound wage gaps, as these are likely to be hotbeds of harassment and hostility.
  • Awareness: Address the unequal division of caregiving work.  The recent White House Women in America report found that women still do more housework and child care work, allowing men to spend more time at paid work and leisure.  IWPR’s research found that even teen girls shoulder an unfair burden of care for siblings and housework, while boys spend more time at leisure.
  • Support: Build greater family supports for workers and learners, including expanding support for student parents, who make up roughly a quarter of students at colleges and universities.
  • Development: Think of ending inequality as a key component of sustainable community development by working to make communities family friendly: include child care as a part of city and state economic development plans, and co-locate child care with public transportation and housing.  For ideas like these, check out the Cornell University’s website on child care and economic development with useful tools including those for assessing the economic development importance of child care to communities.
  • Advocacy: We need a whole new wave of kitchen table advocacy and consciousness-raising on the pervasiveness of sex discrimination.   Some argue that Walmart shouldn’t be held responsible for sex discrimination because the problem is too widespread throughout the whole society.  We somehow managed to desegregate schools and universities even though segregation was widespread at one point in our history. We need to approach unequal pay the same way.
  • Communication: The Paycheck Fairness Act was not passed this year, which would have outlawed retribution for sharing salary information – but we can use the anonymity of the Internet to share such information with one another through discussion forums, blogs and social media.  Also, women need to join forces to address the unequal distribution of labor within the home.
  • Negotiation: And we do need to negotiate, but not because it will make us any allies in the short term, but as a form of advocacy.  When women negotiate like men, it is not always met with a warm reception.  Negotiate as an act of solidarity, so that  we’ll all get used to it, and gradually shift our stereotypes of how nice women workers are supposed to act.

Barbara Gault is the Executive Director and Vice President of the Institute for Women’s Policy Research.

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