Pandemic’s Impact Generating Frightening Scenario for Women
The articles re-posted on this website have often touched on a recurring theme: that women are facing substantial challenges in the area of retirement planning, especially regarding Social Security benefits for their later years. For example, our September 25, 2020 headline article featuring GAO Comptroller General Gene L. Dodaro’s remarks before the U.S. Senate Special Committee on Aging outlined the disparate impact that the COVID-19 pandemic is having on the retirement prospects for women. Similarly, our May 19. 2020 post referencing a study by the National Institute for Retirement Security focused on the gender income gap issue and its impact on retirement planning for women. These, and many others, present a consistent message that the female segment of our workforce is facing steep hurdles in the quest for a sustainable, comfortable retirement.
While these challenges are not new–in fact, they’ve been evident for decades–what’s particularly alarming now is the statistical fallout from the COVID-19 impact. An article posted on time.com this weekend by their Washington bureau political reporter Abby Vesoulis spotlights the rapidly changing workforce demographics associated with the pandemic’s economic recession, from outright furloughs to curtailed working hours to the loss of marketplace for the self-employed. Ms. Vesoulis presents this frightening summary indicator of just how bad the situation is: “Between August and September, 865,000 women dropped out of the labor force, according to a National Women’s Law Center analysis of the Bureau of Labor Statistics September jobs report.” The long-term implications of this impact are beyond gloomy, especially for women trying to survive while planning for future retirement. Read Ms. Vesoulis’ article here…
Ms. Vesoulis’ article presents a clear assessment of how women are faring at this stage of the pandemic, but there’s more to it for the long haul. The recession-driven mass exodus from the workforce, along with the flight to lower-paying employment, will have severe implications for the future benefits available to women. Periods of lower earnings will tend to suppress the calculation of benefits as they approach retirement, with the result being either the need to remain in the workforce longer than anticipated, deferral of benefits as long as possible, or the acceptance of a lower benefit amount (or possibly all of these measures). Overall, a serious situation that adds to the importance of Social Security reform.