How the Wage Gap Hurts Women in RetirementNovember 04, 2019
The gender pay gap, which begins as soon women enter the workforce and grows throughout their working life, continues to disadvantage women during their retirement years, according to a new analysis by the American Association of University Women.
- Women collect only about 80 percent of what men do in Social Security benefits, a result of the fact that women have earned less than men throughout their life, and therefore have paid less into the Social Security system.
- Women’s pension income is only 76 percent of that collected by men.
- Women’s overall retirement income, which includes Social Security, pension, interest and dividend income and other sources of income, is only 70 percent of men’s retirement income.
“The gender pay gap leaves women economically insecure at a most vulnerable time in life,” said Kim Churches, AAUW’s Chief Executive Officer. “A wage gap is unacceptable at any stage of life, but in retirement, it feels particularly egregious. We need to double down on our efforts to close that gap to ensure that women can be as economically secure as their male counterparts, no matter what their age.”
The Simple Truth update is based on newly released data from the data U.S. Census Bureau. The new numbers show that 2018, women received just 82 cents for every dollar paid to a man. Women of color often face a wider gap: Compared to white men, Black women make 62 cents on the dollar, and Latinas make 54 cents on the dollar.
Salary Transparency Linked to Narrower Gap
The report also found that the wage gap tends to be narrower in job sectors where wages are transparent:
- In the federal government, where salary ranges are published, there is a 13 percent pay gap between men and women.
- In state governments, which also often post salary ranges, the gap is 18 percent.
- In the private for-profit sector, where there is typically little salary transparency, the gap is 29 percent.
“This underscores the need for all employers to be more transparent about what jobs in their organizations pay,” said Churches. “When salary information is out in the open, both employees—and employers—can identify gender-based pay disparity and take steps to correct it.”
AAUW is taking a multi-pronged approach to closing the gender pay gap. On a federal level, AAUW is advocating for the House of Representatives-approved Paycheck Fairness Act. And at the state and local levels, it is working to strengthen and pass new laws promoting equal pay. AAUW is also working with employers to improve practices and to proactively seek out ways to close the gender pay gap, including increasing salary transparency.
Additionally, AAUW works directly with women, training them in leadership and negotiation skills so they can maximize their earning potential. AAUW has teamed up with major cities, including New York, Boston, San Francisco and others, to offer in-person salary negotiation trainings. It also offers Work Smart Online a free one-hour course designed to train women in salary negotiation. AAUW has set the bold goals of training 10 million women in salary negotiation by 2022 and closing