The Economic Status of Vulnerable Older Women

Through a series of laws, the U.S. government has greatly improved the economic condition of the nation's elderly population. Social security benefits increased in 1968, 1969, 1970, and 1972. Automatic cost-of-living adjustments, enacted in 1972, ensure constant purchasing power to retired beneficiaries. Present retirees also benefit from the Employee Retirement Income Security Act of 1974 (P.L. 93-406), which provides greater security for private pensions. Thanks to this act, minimum standards of administration and fiscal responsibility in pension plans have been strengthened, and the exclusion or differential treatment of most classes of employees has been prohibited. Moreover, the enactment in 1972 of Supplemental Security Income (SSI) and its implementation in 1974 resulted in the assurance of a basic minimum floor of income for the nation's elderly people. Because of all these legislative steps, the average income of older Americans has increased during the past 25 years at a faster rate than that of nonelders (Radner, 1987). The household income of elders, adjusted for family size, is now as high as that for the rest of the population (Danziger, van der Gaag, Smolensky, & Taussig, 1984a, 1984b), and the poverty rate for elderly people is lower than that for the general population (U.S. House of Representatives, Committee on Ways and Means, 1991). Yet the public's concern for income security for certain segments of the elderly population - black women and Hispanic women, particularly if they are unmarried - lingers. This concern is justified. Because the income disparity between rich and poor people is greater among elderly people than among other population groups, there are more extremely poor individuals among elderly people than among other population groups. Conversely, wealthy elderly people are much wealthier than other elderly people, compared with wealthy nonelderly people (U.S. Bureau of the Census, 1990). Thus, despite numerous steps that have been taken by the U.S. government to improve the income status of elderly people, some segments of the elderly population remain extremely poor. And the poorest elderly people are concentrated among black and Hispanic women. The categories of white, black, and Hispanic women are not necessarily mutually exclusive. Some people of Hispanic origin are white, whereas others are black. For the purposes of this study, however, Hispanic women were identified as a special category, because they constitute a group of women with a distinct economic status. Other groups of women of color are excluded from the data analysis because sufficient data were not available. The article focuses on two areas: current income status (median income, sources of income, and incidence of poverty) and work experience and earnings history (types of occupations in their longest jobs, employment rate, and level of lifetime average monthly earnings and social security benefits if they retired at age 65) of recently retired women. The data are organized so that the figures for black and Hispanic women can be compared with those for white women. In discussing the earnings history of recently retired women, I will include the figures for men for further comparison. The following data sources were used in the analyses: Income of the Population 55 or Older, 1988 (Social Security Administration, 1990) for the current income status of white, black, and Hispanic women and data from The 1982 New Beneficiary Survey (Maxwell, 1983) for the work experience and earnings histories of women who retired between mid- 1980 and mid- 1981. The 1982 survey is the most recent one of a series of surveys conducted by the Social Security Administration on the economic conditions of recently retired workers (Maxwell, 1983). The technical aspects of the survey data are discussed elsewhere (Ozawa & Kim, 1989; Ozawa & Law, 1991). Current Income Status Median Income Compared with white women, black and Hispanic women have considerably smaller incomes. …