COVID-19 has had a disproportionate impact on working women. Before the pandemic, women had made important strides in the workforce. When the U.S. Bureau of Labor Statistics first began measuring women’s labor force rates in 1948, 32 percent of women were in the workforce. By the beginning of 2020, that number had increased to nearly 58 percent.
Then the pandemic hit, driving over 2 million women out of the workforce. One factor behind the drop was significant job loss in sectors employing predominantly women, however, there are other factors.
For one thing, full-time working women earn 80 percent of what their male counterparts earn. In families with two working adults, it is often the lower wage earner who leaves their job to assume home responsibilities. Many women, therefore, have dedicated more time to homelife as they shoulder more responsibility for homeschooling and the caregiving of children and adult family members.
Fewer women in the labor market will affect household incomes, retirement savings, and the pace of overall economic recovery for years to come. The future financial toll for women is particularly alarming because they are already more likely to face poverty than men during retirement, especially Black women and Latinas.
While Social Security is a critical safety net, it is not enough to cover costs in retirement. Women’s Social Security benefits are typically smaller than their male counterparts for reasons mentioned above. Yet, many women age 65-plus rely on Social Security for nearly all of their income.
During the pandemic, according to the Maine Department of Labor, Maine lost more jobs on a percentage basis than in any recession in the past 50 years. The result is that more Mainers will face even deeper retirement savings deficits and more workers will have only Social Security to fall back on. Still others will collect Social Security earlier than planned, impacting their monthly benefit.
The statistics are particularly dire for women. A report by the National Institute on Retirement Security states that “even though women generally live longer than men, they are forced to do so on significantly less retirement income…and the gender pay gap eventually becomes a retirement wealth gap.” This contributes to the fact that almost 10 percent of Maine women 65-plus fall below the poverty line.
We must act quickly to mitigate the long-term economic damage to women and their families.
We can start by removing one of the biggest obstacles that prevents women from growing the savings they need to control their financial future: the lack of access to workplace retirement savings. Millions of women work all their lives with few or no opportunities to participate in retirement savings through their jobs. In Maine, about 47 percent of female workers had no access to a workplace plan even before the pandemic.
Overall, more than 207,000 Maine workers aged 18 to 64 have no access to a retirement savings program through their employer. Few of these employees save on their own and when they do, on average, they save less than $2,500 by the time they retire. However, research shows that Mainers are 15 times more likely to save when they can do so through their job.
Right now, our state leaders are considering LD 1622 to create a “Maine Retirement Savings Program” to help women — and all workers — take control of their future. This bill will make it easier to grow the savings needed to deal with the rising costs of basic needs and health care. LD 1622 provides a common-sense, public-private solution to these problems and also benefits taxpayers. Employees of small and medium businesses, as well as self-employed and independent contractors, will be able to save an amount they choose from each paycheck and watch their contributions grow over the years until retirement. Their savings will be portable and go with them if they change employers.
This type of forward thinking is just what we need to rebuild our economy and empower workers to create a more secure future for themselves and their families. Maine lawmakers must act now to help Maine families recover from the financial toll of the pandemic. It is imperative to urge state leaders to pass LD 1622 without delay.
— Special to the Press Herald
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