According to the Labor Department, the number of women between 70 and 74 who continue to work has doubled from 324,000 to 618,000 in the last 14 years (PI*, Dec 27, 2005 “Working women over 70 caught in the retirement trap”). Why is this happening?

The Equal Pay Act prohibiting sex-biased wage discrimination was enacted in 1963. Many think this fixed the problem. We know that it didn’t. Alicia H. Munnell (Center for Retirement at Boston College, “Why are so many older women poor,”) states, “Even women who are employed full-time earn about 25 percent less than men.” Further, she points out that about 25% of women work part-time, which aside from decreasing the aggregate number of hours worked over their lifetime, generally decreases their hourly wage. Additionally, largely because women are the primary care takers, the average length of time they are in the work force is 32 years compared to 44 years for men.

Because of this, Munnell says that only 32% of retired women have a pension compared to 55% of men and their benefits are less than half what men earn. The PI* article says that in 2003 women collected an average of $797.50 a month from Social Security, while men earned an average of $1,039.

Aside from the fact that women generally tend to earn less than men, there is another factor that detracts from their financial well being as they age. They live longer. Munnell states that when husbands die, the average retirement income of women drops significantly. According to her, 28% of unmarried women over 65 are poor or near poor. The federal poverty line is $9, 310. The near poor have an income of less than 125% above this line.

When husbands die, Social Security benefits are cut by one third to one half. Munnell says that one study indicates that 41% of pensions end when a husband dies. In the 59% other cases, the average reduction is one third of the original pension. While Social Security is indexed for inflation, pensions usually are not.

As grim as this looks, the future looks grimmer. First, Social Security is likely to be reduced – if by nothing else, then by the increase in Medicare premiums which are subtracted from Social Security – let alone what Bush might do. Second, pension funds are seriously under attack everywhere. Recently, both Verizon and IBM indicated a shift in their pension funds to 401(k) type plans. These plans pay benefits at retirement in a lump sum rather than as annuities. The danger is that more is spent in the early years of retirement – when people are healthier – and little is left for the later years when women tend to become single and less healthy.

Given all of this, is there any question why more women are working or trying to find work in their 70s. We must work to change this.

*PI = Seattle Post Intelligencer Reporter