Introduction
There is the need to pay special attention to women when addressing social security because of their higher life expectancy which means they will rely longer on social security. Women in their old age are twice likely as old men to be living in poverty (Aaron, Shoven & Friedman, 1999, p. 4). The need to look at social security along gender lines is because of the existing employment disparities between men and women. When a woman becomes widowed fifty percent of their income is lost making them poor. According to Tanner of Cato Institute (2004, p. 133), women work fewer years compared to men and also earn less than men, translating to low social security benefits.
Privatization will only benefit women if there are higher return rates for them. This can be done by investing in capital markets. Unmarried women are more vulnerable to negative effects (Feldstein, 1999, pp. 101). Women are more dependent on the state due to factors like divorce and widowhood, in addition to health problems. The marital status of women is linked to poverty in old age. Sixty percent of older women are single in old age compared to men who are at twenty-six percent.
There are two frames of privatization the first is the General accounting/ General equity frame where each generation is independent and does not support another generation (Estes, 2001, pp. 104). This system emphasizes that what individuals save is what they will earn when they retire, according to this frame the elderly are getting more than they deserve in the current system. The second frame is called the General Interdependence frame which advocates for generations depending on each other, rather than one consumed at the other’s expense (Kingson & Williamson, 2001, p. 369). The first system disadvantages women moreover it encourages individualism. It does not recognize women’s role in the family such as reproductive labor. Women’s role in the family such as taking care of children is necessary but unfortunately cannot be quantified like the private labor market.
Reasons why privatization will harm women
While social security guarantees the woman a lifetime income. Privatization makes a woman vulnerable to outliving what they have saved (Livingston, 2008, pp. 137). It leaves one with uncertainty because many negative things can rob the woman of their earnings for instance sickness, misjudgment, or bad luck.
Social security income is constant and is not affected by markets. Privatization is affected by factors such as market downturns which can cut on investments. This can lower one’s lifestyle which can even lead to poverty. Private investments do not guard against inflation. Inflation usually lowers the value of some investments. Social security is protected against inflation and this helps women since they live longer, the purchasing power of women is also not eroded (Rogne, Estes & Grossman, 2009, pp. 149).
According to Dixon, (1999, pp. 272), the earnings earned with privatization depend on a woman’s working years. This means that a woman will earn less especially if she took time to raise the family. Women who are divorced later in life would have to struggle over limited assets meaning they will probably get an inequitable share. With social security, the woman gets a specified amount of benefit automatically which is not affected by the next spouse who replaces her.
Wong & James, (2003, pp. 19-20), argue that privatization will harm the middle class and lower class women who need to be more concerned about privatization. The affluent women are not affected much because they do not depend on social security. The affluent woman can also afford the risk of investing a portion of their social security on the stock market. The affluent woman also can work longer years since they are likely to be in better health.
There were previous warnings about broken social security in 2001 by President Bush who suggested that part of it should be privatized. This should be a warning to women to stop relying on the state when they retire. If a woman wants a comfortable retirement then there is a need for her to save and invest early in life. The Bush administration has been accused of scaring the people to accept his idea of partial privatization. The dependence on social security is becoming tricky for women. Cafferty of CNN (2010, para. 3), reports that the government is using social security to pay for things, this means that the social security that women are depending on risks running out of money.
Conclusion
When handling the issue of social security, there is the need to also take into account aging as it has a profound impact on this concept. When the life expectancy of a population increases, what this means is that such a population shall be more dependent on social security for longer. In this case, it is important to take into account the gender element because there are indications that in their old age, women are twice likely to live a life of poverty in comparison with their male counterparts of the same age bracket. Since more than half the people depend on social security, the government needs to manage these funds better. More and more women are depending on it because of factors like the slashing of stock portfolios.
Reference List
Aaron, J. H., Shoven, B. J., & Friedman, B. M. (1999). Should the United States privatize Social security? Massachusetts: Massachusetts Institute of Technology.
Caferty, J. (2010). What should be done about Government Squandering the Social Security Surplus? CNN. Web.
Dixon, J. E. (1999). Social Security in Global Perspective. New York: Greenwood Publishing Group.
Estes, C. L. (2001). Social Policy and Aging: A Critical Perspective. California: Sage Publications.
Feldstein, M. Privatizing Social Security. (1999). Chicago: Chicago University Press.
Kingson, E. R., & Williamson, J. B. (2001). Economic Security Policies. In Binstock, R. H. & George, L. K. Handbook of Aging and Social Sciences. San Diego: Academic Press Publishers.
Livingston, S. G. (2008). United States Social Security: A Reference Handbook. California: ABC-CLIO, Inc.
Rogne, L., Estes, C. L., & Grossman, B. (2009). Social security and Social Justice. New York: Springer Publishing Company.
Tanner, M. (2004). Social security and its Discontents: Perspective on Choice. Washington: Cato Institute.
Wong, R., & James, E. (2003). The Impact of Social Security Reform on Women in Three Countries. Web.