Another Reason Workplace Gender Equity Is Good for America

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Wednesday, March 03, 2010 at 1:24 pm

According to critics of laws forcing employers to pay women wages equal to those of men, government-enforced wage equity is an unfair burden on employers and strictly a product of women choosing to opt out of high-powered career tracks in order to pursue other kinds of work or take care of their families. Despite the fact that all the available evidence shows that no more than one-third of the wage gap is choice-driven and many employers simply prefer childless female candidates to working mothers, plenty of Social Security-collecting pundits and politicos continue to believe that the best thing a woman can do for society is to be exclusively a mother. Empirically speaking, though, that’s untrue.

A study by Casey Mulligan, published by The New York Times, shows that the only reason Social Security remains solvent today is because women made huge strides in the labor market since the program’s inception. Longer life expectancies coupled with standard retirement ages that have barely changed, a system that once relied on the payroll taxes of working men to pay benefits to retired men and their stay-at-home spouses never would have survived without the inclusion of women in the labor force.

But the system can only keep working for the benefit of elderly men and women if women continue to work and the wage gap continues to shrink.

In fact, millions of married women worked for pay and paid the payroll taxes as they did. This was largely profit for the Social Security system, because the system would have paid those women benefits regardless. The revenues of governments in the future will depend just as much on how women spend their time. Governments can expect more revenue if women continue significantly with their labor market progress, and less revenue if some of women’s payroll gains are reversed in the years ahead.

Since the payroll taxes funding Social Security are based on earnings, employers that pay women less for the same work as their male colleagues are, in effect, depriving the Social Security system of taxes as much as they are depriving their female employees of equal pay. Everyone loses, except those at the top of the food chain, who don’t pay Social Security taxes on their earnings over $106,800 anyway.

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Comments

5 Comments

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Comment posted July 6, 2010 @ 7:56 am

But the system can only keep working for the benefit of elderly men and women if women continue to work and the wage gap continues to shrink.


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Comment posted August 4, 2010 @ 4:18 am

good point! thank you for sharing! i think the social security system is great in keeping our society balance.


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