As you get older, you inevitably end up having to take care of elderly relatives. Sometimes, the conditions are so severe, people have to drop out of the workforce or take tremendous salary cuts–and “people” are disproportionately women. You probably won’t be surprised to learn that presidential candidate Sen. Elizabeth Warren has a plan for that (boldface mine):
In part because of work and pay discrimination and time out of the workforce to provide care for children and elderly relatives, women receive an average monthly Social Security benefit that’s only 78% of the average monthly benefit for men. That’s one reason women over the age of 65 are 80% more likely to live in poverty than men. My plan includes several changes that primarily affect women and help reduce these disparities.
Valuing the work of caregivers. My plan creates a new credit for caregiving for people who qualify for Social Security benefits. This credit raises Social Security benefits for people who take time out of the workforce to care for a family member — and recognizes caregiving for the valuable work it is.
The government calculates Social Security benefits based on average lifetime earnings, with years spent out of the workforce counted as a zero for the purpose of the average. When people spend time out of the workforce to provide care for a relative, their average lifetime earnings are smaller and so are their Social Security benefits.
That particularly harms lower-income women, people of color, and recent immigrants. There are more than 43 million informal family caregivers in the country, and 60% of them are women. A 2011 study found that women over fifty forgo an average of $274,000 in lifetime wages and Social Security benefits when they leave the workforce to take care of an aging parent. Caregivers who also work are more likely to be low-income and incur out-of-pocket costs for providing care. Because access to paid or partially paid family leave is particularly limited for workers of color — and first-generation immigrant workers are less likely to have jobs with flexible schedules or paid sick days — these workers are more likely to have to take unpaid leave to provide care and thus suffer reductions in their Social Security benefits.
My plan will give credit toward the Social Security average lifetime earnings calculation to people who provide 80 hours a month of unpaid care to a child under the age of 6, a dependent with a disability (including a veteran family member), or an elderly relative. For every month of caregiving that meets these requirements, the caregiver will be credited for Social Security purposes with a month of income equal to the monthly average of that year’s median annual wage. People can receive an unlimited amount of caregiving credits and can claim these credits retroactively if they have done this kind of caregiving work in the last five years. By giving caregivers credits equal to the median wage that year, this credit will provide a particular boost in benefits to lower-income workers.
This is not only good policy, but it also will put conservatives in a pickle. Caregiving is what ‘women are supposed to do’ traditionally. Surely, conservatives can’t be against that? (Of course they can). Still, voters will like this, especially those who are low-attachment Democratic leaners (to the extent that Warren could draw attention to this plan).
The other thing to note is that caregiving isn’t assigned the minimum wage, but the median wage. This plan recognizes the importance of this work and prices it appropriately. Hopefully, if Warren isn’t the nominee, the nominee will adopt this plan.
I saw an academic paper several years ago by some economists that tweaked the social security formula to take account of the fact that people in highly physical jobs who’s bodies get worn out tend to “retire” early, at least from their primary profession (if they continue working it’s often at signicantly lower pay). They get really dinged now, but their formula fixed it. Naturally, I’ve never heard it mentioned in policy talk.