The year 2015 marks the 50th anniversary of Medicare’s establishment and the signing of the first Older Americans Act. In 1966, President Johnson called for substantial increases in Social Security benefits, which were approved by Congress in 1967. In large part due to these measures poverty among the elderly is much lower today than it was then. In 1966, nearly 29 percent of elderly Americans had incomes below the poverty line, compared to about one in ten (9.5 percent) today.
Still, one in ten is far too high. Moreover, despite the passage of landmark civil rights and equal pay legislation in the 1960s, substantial gender, racial and ethnic gaps remain among older Americans living below the poverty line. As the accompanying graphic shows, older adult women are generally at a considerably greater risk of living in poverty than elderly men. Elder white, non-Latino women are nearly twice as likely to live in poverty as white men.
Click on the chart to see an expanded version
Click on the chart to see an expanded version
Similarly, older adult blacks, Latinos, Asians, and Native Americans all have much higher poverty rates than white, non-Hispanic elders. The gap is greatest for older Latinos, who are nearly three times as likely to live in poverty as older white, non-Latinos.
There are also significant gaps by race and ethnicity in retirement savings and wealth. Gaps in wealthy by race and ethnicity are much larger than the income gaps. Researchers at the Urban Institute have documented that among today’s seniors, the average family wealthy wealth for white, non-Hispanics is roughly ten times that of blacks and Latinos.
Why do these gaps exist? To a large extent, they reflect policy-driven disparities in the labor market experiences and living standards of elders during their working lives. Compared to white workers, Hispanic and black workers are much more likely to earn poverty-level wages and lack health insurance, retirement and other employer benefits. Even today, women working full-time make only 78 cents for every dollar men earn working full-time earn. While this gender wage narrowed considerably in the 1980s and 1990s, it has improved little over the past decade. By and large, gender and racial gaps in wages are not explained by differences in education, for both African Americans and women, the gaps exist among those with similar levels of education
The case of Evelyn Coke, who sued to reverse a loophole in federal labor regulations that exempted home-care agencies from having to pay overtime, provides a stark example of policy-driven disparities can have a disproportionate effect on women and people of color. Coke, a mother of five who died recently at age 74, worked as a home health care aide for decades after immigrating to the United States from Jamaica. Despite regularly working more than 40 hours per week, Coke’s wages remained very low, about $7 an hour, and she received neither overtime pay nor health benefits.
Like Coke, home care workers—and many other workers in care-related jobs that pay low wages and provided limited or no benefits—are disproportionately women and people of color. Last year the Department of Labor extended minimum wage and overtime protections to home care workers who had previously been excluded, but the home care industry has mounted a federal court challenge to the fair pay requirement.
Beyond modest steps like this, broader disparities in pay and benefits mostly remain unaddressed. These disparities mean women and people of color have less money, if any, socked away at retirement. And, because retirees’ initial Social Security benefit levels are set based on their average earnings, there are disparities in the benefits they receive. For example, both women and people of color are overrepresented among the 1 in 5 Social Security beneficiaries—who receive sub-poverty benefits when they retire.
In addition to wage gaps, time spent caring for children or other family members contribute to these gaps. Caregivers don’t receive any credit from Social Security for the unpaid caregiving they provide, making them more likely to not be eligible at all or have lower benefits. As Sara Moore, an 80-year Chicagoan provided years of care to a disabled father and other family members put it, “I put my family first, but all my years of caregiving amounted to zero wages and zero contributions toward Social Security. [Now] I receive less than $1,000 a month in Social Security benefits which is barely enough for me to survive.”
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Greater longevity also increases women’s poverty risk because health-related expenses increase over time, and the likelihood of losing one’s partner increases. As a consequence, in 2013, there were more women age 75 and up living in poverty (nearly 1.5 million) than there were elderly men of any age below the poverty line.
So what can we do to close these gaps? First, we need to boost wages and benefits for poorly compensated workers, including by increasing the minimum wage and equal pay for women. Higher, fairer wages would mean a better retirement for today’s poorly compensated workers. Second, Social Security should be strengthened in ways that improve coverage and benefit adequacy for workers who are poorly compensated, including by increasing the minimum benefit and providing at least some credit for unpaid care work
Finally, we need to modernize and improve means-tested programs that supplement Social Security (or provide the only income) for elderly people living in poverty, including Supplemental Security Income, the Supplemental Nutritional Assistance Program and housing assistance.
In particular, federal policymakers need to reform Supplemental Security’s woefully outdated rules that strictly limit the amount of income and assets that seniors receiving benefits can have. For example, in SSI, a very low-income senior living alone is ineligible for help if they have more than $2,000 in assets, an amount that has barely budged since the SSI was created in the early 1970s.
In short, addressing the gender and racial gaps in elderly poverty requires concerted action on multiple fronts. This may seem like a lot, but when you consider the consequences—millions of elderly Americans who have little to show for years of hard work—it’s the least we can do.
Originally published in Aging Today, January –February 2015. Copyright © 2015 American Society on Aging; all rights reserved. This article may not be duplicated, reprinted or distributed in any form without written permission from the publisher: American Society on Aging, 575 Market St., Suite 2100, San Francisco, CA 94105-2869; e-mail: email@example.com. For information about ASA’s publications visit www.asaging.org/publications. For information about ASA membership visit www.asaging.org/join.