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Posts Tagged ‘Susan Feiner’

Women to Obama: Hands Off Social Security

In Legislation Today, Political world on September 28, 2010 at 11:37 am

By Susan Feiner

WeNews commentator

Monday, September 27, 2010 [Cross-posted at http://www.womensenews.org/story/retirement/100924/women-obama-hands-social-security]

Obama’s discussion of the economy on CNBC last week included what Susan Feiner sees as an alarming reference to Social Security as an “entitlement.” In fact, it’s a self-funded insurance program that women can’t afford to lose.

(WOMENSENEWS)–Anyone who watched President Barak Obama defend his handling of the economy in the televised town-hall discussion last week might have come away remembering the exchange with the hedge-fund manager. He had the nerve to ask when Obama would stop giving Wall Street “the treatment.”

The president’s answer: “If you’re making a billion dollars a year after a very bad financial crisis where 8 million people lost their jobs and small businesses can’t get loans, then you shouldn’t feel put upon.”

Obama’s retort drew warm applause, and rightly so. But minutes earlier the president made a remark that should terrify the majority of Americans–especially women.

In responding to a question about closing the federal deficit he said that after you set aside “security spending”–whatever that may mean–the biggest part of the national budget is “entitlements.”

Ominously, he specified Social Security as one of those “entitlements,” along with Medicare.

Stop right there Mr. President.

Women Should be Horrified

Women in this country should be horrified by your comment for the following reasons:

  • Women still earn less than men, so their opportunity to save for retirement is more limited.
  • Only 13 percent of women aged 65 or older currently receive a pension.
  • Social Security provides 90 percent of the income for 42 percent of women, but only 28 percent of men rely on Social Security for 90 percent of their income.
  • Women are more likely than men to be single, widowed or divorced in retirement.

Adding up these facts leads to one conclusion: The health and dignity of women over age 65 depends on their continued receipt of monthly Social Security checks.

Moreover, Social Security is not an entitlement program as it’s paid for entirely by payroll taxes. It is an insurance program, not an entitlement. Not one penny of anyone’s Social Security comes out of the federal government’s general fund.

Social Security is, by law, wholly self-financing. It has no legal authority to borrow, so it never has.

If this incredibly successful and direly needed program hasn’t ever borrowed a dime, why is the president and his hand-picked commissioners putting Social Security cuts (and/or increases in the retirement age) in the same sentence as deficit reduction?

Fully Paid Until 2037

Social Security insurance is fully paid until 2037.

The program began in 1935 and is considered the greatest achievement of Frances Perkins, labor secretary under President Franklin Delano Roosevelt and the first woman to hold a cabinet level position in the U.S. government.

In every decade of its existence, lawmakers have adjusted its funding formula to ensure its solvency.

President Ronald Reagan, for instance, in the mid-1980s appointed the “Greenspan Commission” (Greenspan later became the chairman of the Federal Reserve, the nation’s central bank), which recommended significant increases in Social Security payroll taxes to ensure the build up of a trust fund to finance baby boomers’ retirements.

The Greenspan Commission was honest; it looked at Social Security and figured out how much was needed to pay future retirees’ benefits. The necessary changes were made, the needed dollars flowed in and the trust fund grew. The fix engineered by the Greenspan Commission worked: the Social Security ‘trust fund’ is valued at $2.54 trillion today. By 2024 its projected value will be $4.2 trillion.

Nothing in the accounting future of the program warrants any major changes.

Enemies of Social Security have juicy private pensions, but few women enjoy this perk.

Social Security is as essential to older Americans today as it was 75 years ago when it was founded. Leave it alone.

Susan F. Feiner is a professor of women’s studies and economics at the University of Southern Maine. She is co-author of the 2004 book, “Liberating Economics: Feminist Perspectives on Families, Work and Globalization.” She is also a board member of the Frances Perkins Center.

For more information:

Older Women’s League: http://www.owl-national.org/Welcome.html

Frances Perkins Center: http://www.francesperkinscenter.org

Cross-posted at http://www.womensenews.org/story/retirement/100924/women-obama-hands-social-security

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Toward truly “gender neutral” economics

In Economics on May 21, 2010 at 7:46 am

This essay, by Frances Perkins Center Board member Susan Feiner, originally appeared in Truthout under the title, “How to Think Like a Feminist Economist.”

As a feminist economist I am constantly amazed—though I suppose I should be used to it by now—by the ways conventional analyses of economic matters completely ignore gender asymmetries.

Because I am a feminist economist, I am hypersensitive to differences in women’s and men’s economic circumstances. Women earn less, work in jobs with less prestige and few (if any) benefits, and do far more of society’s unpaid work. These are not new realities. One is, however, hard-pressed to find discussions of economic policy that place women’s disadvantage at the center.

Feminist economists understand how important it is to challenge the assumptions, and hence, the conclusions, of mainstream economics.

The economics that makes its way into the public realm consistently misrepresents the best interests of ordinary folks in their multiple roles as workers, consumers and citizens. Economics as we know it, and as it is taught in countless undergraduate courses, is little more than an apology for the status quo. Textbook economics, replete with supply and demand models demonstrating the market’s natural tendency to correct shortages or surpluses, doesn’t take the topic of “disadvantage” seriously.

In textbook economics, markets are markets. Competition is competition. And any economic system that encourages competition in markets will, by the very rules baked into the exercise, produce economic outcomes that duly reflect the wishes of the people. Your income is too low? Well, retrain for a job in a higher paying field. Your neighborhood is decaying? Just save more so you can move. The roads and bridges on which you drive are crumbling? Sell them to the highest bidder and let the private owner charge tolls to cover the upkeep. No problem is too large or too complicated that a good dose of market competition won’t fix it. There is little in economics that is “gender neutral”

In short, there is no such thing as “disadvantage.” There are only individual bad choices.

The spectacular failure of the financial sector with the attendant loss of some 20 odd million full time jobs should reveal — even to free market economists — major flaws in this way of thinking. But an intellectual bankruptcy rules the system, as demonstrated by critiques of every aspect of the theory — its assumptions, claimed links of causation and the failure to match up with historical experience.

My experience as a feminist economist means that I vigilantly watch for intellectual sleights of hand that present the interests of the rich and powerful as the interests of us all. When bankers, corporate executives and their minions unite behind purported economic truths, I challenge their arguments, their logic and their appeals to the so-called “laws of the market.” By looking behind and around standard economic narratives I can construct alternative stores connected to the real world, the actual historical record, and perhaps most importantly, the questions that are not being asked – many of which, it so happens, have to do with women. There is little in economics that is “gender neutral.”

Taxes Are More Taxing for Working Women

Feminist economists have contributed their share to the volumes critical of mainstream economics. One of our key findings is that even a topic as seemingly “gender neutral” as taxes is loaded with implications for women’s economic well being.

When we go shopping, cashiers include sales taxes regardless of our sex. Tax assessors do not value houses differently for female and male homeowners. Income tax forms do not come in pink and blue. All employees pay 6.2 percent of eligible earnings into the Social Security trust fund and all employers match that 6.2 percent. While tax rates may look gender neutral, I know that they are not. Taxes are a feminist issue.

While the hot button political catch phrase, “no new taxes,” may sound like a good idea, the reality is otherwise. That’s because the taxes that politicians pledge not to raise are precisely the taxes that are least relevant to women’s burden of taxation.

You will be much more likely to see the gender dimensions of an economic issue if you focus on ratios rather than the pure numbers. If, for example, the evening news reported on gender differences in tax payments, they’d likely tell us that men, on average, pay more in taxes than do women (on average). Facts and figures describing the economy are almost always more meaningful when we have information on both the numerator and the denominator. In the preceding example, the raw number “dollars paid in taxes” is the numerator. But if taxes paid are put in relation to income earned (the denominator) we will realize that because women still earn 80 cents for every dollar earned by men, women pay a greater share of their income in taxes.

For me, thinking about taxes in terms of tax burdens — who pays how much of their income in each type of tax — is necessary to cut through the political brou-ha-ha about the virtues of tax cutting.

Politicians, pundits, and professors generally ignore the way tax cuts impact the well being of different income groups. Doing this allows them to create the false impression that reducing taxes benefits women as well as men. Not so.

Understanding women’s relationship to the U.S. tax system is critical to any advocacy work on behalf of economic equality.

Not only are there many types of taxes, the various levels of government—federal, state and local—impose different taxes on different goods and services.

The broad categories of taxes include sales (and excise) taxes, income taxes, payroll taxes and property taxes.

Sales taxes, payroll taxes and property taxes are regressive. This means that as incomes rise, less is paid in each of these types of taxes. The tax burden shifts downward, the well-to-do pay less, and the folks lower down the income ladder pay more. As a result, women—who earn less than men—pay a greater share of their income in sales, property and payroll taxes.

Because income taxes are progressive, the incidence of taxation rises as income rises. Because women earn less than men, federal and state income taxes help correct gender differences in wage income.

Sales and property taxes, which are levied by state or local governments, are regressive. But, these are not the most regressive taxes: this honor goes to payroll taxes.

Earning Less, Paying More

Every time a worker gets paid, the number at the top of the check — gross earnings — is larger, often much larger, than the actual amount that can be deposited in the bank — the net earnings. Some payroll deductions have little to do with taxes, such as pension or health care contributions.

But for most women in the U.S., the lioness’ share of monies deducted from each paycheck goes to contributions to Social Security and Medicare. In fact, the amounts a woman pays annually into Social Security and Medicare are likely to exceed any income tax owed to the federal government. Women in the United States do not need more “tax cuts”

For every $1,000 the typical woman earns in wages, her employer withholds $62 as the woman’s contribution to Social Security (6.2 percent). Her employer’s share of Social Security contributions is also 6.2 percent, so another $62 is credited to her Social Security account. All wage and salary income, up to $97,500, is subject to Social Security taxes. [Editor’s note: the current limit is actually $106,800.]

Every dollar earned above $97,500 (keep dreaming, honey) is exempt from Social Security withholding. That’s why this tax is so regressive. If a woman’s annual earnings are $195,000, and Social Security is withheld from only the first $97,500 then the second $97,500 earned is tax free—at least relative to the Social Security tax.

Since men, on average, earn more per year than women, and are more likely to earn more than $97,500 per year, men pay less—as a share of their income—into Social Security. They, therefore, have more to spend and save as a share of their earnings.

Adding insult to injury, studies by such noted think tanks as The Urban Institute estimate that employers don’t actually pay 6.2 percent of employees’ earnings. Instead, they shift this cost by holding down wages and salaries. This means that everyone who earns less than $97,500 is likely paying the full 12.4 percent of Social Security withholding.

Almost two-thirds of all taxpayers in the U.S. pay more in payroll (Social Security) taxes than they do in income taxes. Virtually all the tax cuts approved by Congress in the last 30 years have been income tax cuts, and the largest such cuts have gone to the top 5 percent of earners — those folks lucky enough to live in households with average incomes exceeding $172,000 per year. Very few women earn this much in a year.

Social Security is definitely important to women. For 80 percent or more of women over 65, Social Security constitutes all of their income. To be gender-equitable, the way the government finances Social Security needs to be changed.

A critically important progressive reform would make all income — including those hedge fund bonuses out in the stratosphere — subject to Social Security withholding.

Thinking like a feminist economist, reveals this stark conclusion: Women in the United States do not need more “tax cuts.” What all of us need is a shift away from taxes on work (payroll taxes) and a significant increase in the taxes on the highest income earners—virtually all of whom are men.

A similar gender analysis can be applied to every tax issue and almost every policy issue that the country faces. But, unveiling the gender dimensions of our economic problems and the variously proposed solutions requires a rejection of a standard, gender blind analyses, and to do this, we dig below a seemingly gender neutral surface. Thinking like a feminist economist, it turns out, can be an exceedingly valuable tool for the most critical public decisions in the U.S. and across the globe today.

Susan F. Feiner is Professor of Women’s and Gender Studies and Professor of Economics at the University of Southern Maine. She is one of the founding scholars in the field of feminist economics and the author of the award-winning Liberating Economics: Feminist Perspectives on Families, Work and Globalization (with Professor D. Barker, University of Michigan Press, 2004). She has written for Women’s Enews, Dollars & Sense and The Women’s Review of Books. Over the years she has written about gender and race bias in economics education, U.S. economic history, psychoanalysis and economics, and religion and economics, and teaches courses on gender and economics, feminism and Marxism, political economy, among others.