Casey urges GAO to examine impact of pay gap on women’s retirement savings
Casey joined all Senate Democrats in introducing Paycheck Fairness Act last week
Washington, D.C. – Today, U.S. Senator Bob Casey (D-PA) is releasing a statement on Equal Pay Day, which marks the amount of time the average American woman must work in order to earn the same amount of money her male colleagues were paid in the previous calendar year. While today marks Equal Pay Day for all women, the pay gap disproportionately hurts women of color—who have to work even longer to close the wage gap. Senator Casey joined all Senate Democrats in introducing the Paycheck Fairness Act, legislation that would combat wage discrimination and help close the wage gap by strengthening the Equal Pay Act of 1963, ensuring women can challenge pay discriminations and hold employers accountable.
“The gender pay gap hurts women at every stage of their careers. By the time the average woman reaches retirement age, she is not as well-equipped as her male counterparts to retire comfortably. The divide is even wider for women of color,” said Senator Casey. “Every year the pay gap exists makes it harder for women to raise a family, save for the future, and retire securely. Today and every day, I am committed to rooting out the causes of the gender pay gap and advancing equality and equity for women in the workplace.”
As Chairman of the Special Committee on Aging, Senator Casey led a letter to the Government Accountability Office (GAO) asking the agency to examine the impact of the pay gap between men and women, considering the ability of women to save for retirement. The letter noted that the wage gap harms women’s ability to save for retirement, and women age 65 or older have less retirement income and are more likely to live in poverty than men. Because Social Security benefits are based on a worker’s earnings, the pay gap means that women receive lower benefits in retirement than men. In light of this, Senator Casey and his colleagues ask the GAO to ask older women about their experiences with pay discrimination and the impact it has had on their ability to save for a secure retirement.
Read the letter to GAO here and below.
The Honorable Gene L. Dodaro
United States Government Accountability Office
441 G Street NW
Washington, DC 20548
Dear Mr. Dodaro,
We write to request GAO examine the impact of the pay gap between men and women on the ability of women to save for retirement. Women workers are a larger presence in America’s workforce than in previous decades. Despite their increasing role, a persistent wage gap exists between men and women. This wage gap leaves women at a disadvantage, harms their ability to save for retirement, and can even reduce the money they receive through Social Security. Congress needs to better understand how the pay gap impacts the ability of women to save and their quality of life after retirement.
Women are a growing and increasingly critical part of the American workforce. Between 1960 and 2022, the labor force participation rate of women age 16 or older increased by 19 percentage points. In 2019, women were more than half the workforce in multiple industries, including education and health services. Meanwhile, the United States Census Bureau found 34 million women in essential jobs that helped keep our Nation functioning during the COVID-19 pandemic. Yet, despite their importance to our Nation’s economy, women continue to receive lower pay compared to their male colleagues.
The persistence of a gender pay gap exists across many industries and occupations. According to one analysis, women earned 82 percent of what men earned in 2022, a gap that has changed little in 20 years. Another analysis reported a similar disparity in the Nation’s essential workforce. In 2022, the Government Accountability Office (GAO) found that women in management positions earned less than male managers, a gap that was larger for women age 40 or older. In an earlier review, GAO found that, among workers with less education, women earned a lower hourly wage than men. The pay gap is worse in communities of color, with Hispanic or Latina women earning 58 cents and Black women earning 63 cents compared to their male counterparts. These disparities negatively impact the ability of women to save for retirement compared to their male colleagues, and can risk their quality of life after retirement.
Women age 65 or older have less retirement income and are more likely to live in poverty than men, factors likely aggravated by a pay gap during their careers. Because Social Security benefits are based on a worker’s earnings, the pay gap means that women receive lower benefits in retirement than men. Unequal pay also means that women have less to save and invest on their own, and are less able to take advantage of employer sponsored retirement accounts. One report found that men with savings in a defined contribution retirement account were “the only group to reach six figure earnings,” whereas women with those savings “will barely achieve $72,000 in earnings at the peak of their career.” This is particularly troubling in light of the fact that women typically live longer than men, meaning they must pay for more years of retirement with less money than male retirees.
We would like GAO to ask older women directly via interviews, focus groups, panels, or a survey about their experiences with pay discrimination in the workplace and the impact it has had on their ability to save for and secure an adequate retirement. Specifically, we would like GAO to address: