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Why women face more insecure retirement than men: Expert

Academic Advisory Board Member at the National Institute on Retirement Security and University of Massachusetts Boston Professor Christian Weller joins Yahoo Finance’s Zack Guzman to discuss why coronavirus-related job losses are impacting women more than men.

Video Transcript

ZACK GUZMAN: The same can be said, though, too, when we look at the data around individuals getting impacted by the shutdown as well. We've highlighted that on this show that it is impacting more Americans, particularly people of color, more than white Americans. And interesting new data out looking beyond just the short-term impacts of that, also impacting people in different ways when you look at how they're trying to prepare for all this down the road in retirement as well.

For both of those things, I want to bring on our next guest. That would be Christian Weller, Academic Advisory Board member at the National Institute on Retirement Security, University of Massachusetts Boston professor as well, and he joins us now. And professor, when we look at this, I guess we'll start-- we'll dig into retirement in a second, but we'll start with what we're seeing on the job front here. Because when you look at it, it's shocking the amount of disparity when you look at communities of color, in terms of job losses versus white Americans here. What are you seeing play out in the economic data?

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CHRISTIAN WELLER: Well, in the economic data, we have been pointing out for two months now that communities of color in general are suffering worse job losses than whites. And when you disaggregate the data even further, you see that the job losses are even greater among women of color than among men. That is particularly-- that's true for African-American, Latina women, as well as Asian-American.

That has often to do with the industries they're in. That has to do with-- cuts across a little bit about age, often sort of what you would consider prime age, 25 to 54-year-old women other than Asians suffer more in this downturn. Among Asian women, we, for instance, see larger drops in employment opportunities of older women, 55 and older.

But it doesn't really matter how you exactly cut the data. This falls most squarely on women of color, largely because of the industries they're in. Obviously, the hardest hit ones at this point are Latina women.

ZACK GUZMAN: Yeah, and one of your recent op-eds highlighting the data there, it was interesting to see the age discrepancy there, even when you look at communities of color, the discrepancy even within those communities when you look at prime age, as you're describing, prime age workers, versus some older minorities and the way that Asian women kind of stand out there. I just want to highlight it because it was an interesting chart, the way that they're kind of an anomaly when you look at the way that older Asian women workers were actually hit harder here than some of the younger workers.

CHRISTIAN WELLER: There has been going on-- there has been sort of a gradual shift within the Asian community from industries that you would think are heavily hit right now, like restaurants and hotels, towards health care and finance and education services. But that also-- like, when we use this term Asian, we have to be-- Asian or Asian-American, we have to be very careful. It is a very diverse community, and we're talking complete different communities here.

What we have to understand when we look at Asian-Americans that a huge share of the Asian-American community, which is the fastest-growing racial group in the country, are economically vulnerable. Many of them are older women with very few savings, low earnings, often facing massive discrimination in the labor market. And they are being hit hard.

So basically, what we see in the labor market, and this is also what we see in the retirement savings data, is the pandemic is making a really bad situation already much worse.

ZACK GUZMAN: Yeah, let's dig into that retirement data too because that is kind of a piece of this equation. When you look at how long this downturn might last, that's obviously going to impact how long the discrepancies we're talking about here in the short term on the employment front last as well, and that will spill over into retirement. But when you look at that, there are already problems there in the way that men versus women, especially minority women here, have been saving for retirement. So that becomes even more compounded when you think about how long this might go on for. So what's the data saying there and how farther behind women are falling on the retirement front?

CHRISTIAN WELLER: Well, on average, they're about-- they have a retirement income that's about 80% of that of men. But that sort of misses the sort of-- the edges a little bit, if you will. And the edges are large. The people who suffer a lot in retirement, who struggle, tend to be sort of mushed into, when we talk about averages, a median. And that's very important when we talk about women.

Women tend to live longer. They often struggle with more health issues in their 60s and thereby have to leave the labor market sooner than men. So they have to spend a longer time in retirement, meaning their retirement savings have to go a lot-- last longer, except they have fewer opportunities to build retirement savings during their careers.

Part of it is just simply outright gender discrimination. They're getting paid less for the same amount of work, for the same type of work. There is-- part of it is, like, gender steering, sort of like-- all right, treating in a discriminatory way, in a structural way women towards more lower-paid caregiving jobs in health care, in home care, in child care. That makes it harder to get ahead and save money.

And then as we tell in the report, there are risks that are much harder-- that hit women during their careers much harder. One of them divorce and then the other one is caregiving. So just think about childcare. When there is a child in the home, typically a woman will-- and there is a heterosexual couple with a child, the woman will take on a much larger share of the caregiving burden-- [INAUDIBLE].

ZACK GUZMAN: Yeah, and I think that's important to highlight here because you do look at kind of the divorce data in this country. You look at that trend and the age discrepancy there between being older married women versus unmarried women here in the country and you look at the discrepancy for some of the older women that do have savings accounts, in terms of retirement accounts too, that are lower than some of the married women. So I guess that would be a fear, in terms of discrepancies among gender, when we think about divorce and how that might impact retirement as well. Real quick before we let you go, maybe highlight just those--

CHRISTIAN WELLER: Yeah, on the divorce side, generally what we find is people who are divorced or separated have substantially lower retirement savings prior to retirement than men do. Part of that is, again, if you think about-- so if the married couple-- generally, the wife will be more likely to leave the labor force, cut back on hours, thereby forego some earnings, thereby have fewer retirement savings. When the divorce then happens, it becomes much harder for the woman to-- the divorced woman-- to regain their earnings because she's been out of the labor force, had fewer career earnings, sort of compounding the various effects that are going in. And that's ultimately what we're seeing in the data.

Eventually, what we know-- eventually, people will recover. It depends a little bit on when the divorce happens and whether there is a remarriage. But divorce is essentially a heavy penalty on women's economic security.

ZACK GUZMAN: Very fascinating stuff and very fascinating to see that trend line kind of flip here in recent years when we think about the number of women college graduates that are women going there and the way that they have surpassed men just recently. But always interesting to--

CHRISTIAN WELLER: [INAUDIBLE]. Unless we address wage inequality, unless we address structural obstacles to getting women into all jobs, not just steer them towards lower-paid, less benefited jobs, we're never going to get a handle on this problem.

ZACK GUZMAN: Very important. Can't let you leave without throwing that in there as well. But Christian Weller, I appreciate it, Academic Advisory Board member of the National Institute for Retirement Security, appreciate you taking the time.