Chapter 15

Poverty and Inequality

Chapter Outline
Aging and Social Stratification
The Theory of Cumulative Disadvantage
Income and Poverty
Gender Inequality in Old Age
Patterns of Gender Inequality
In Their Own Words: The Gendered Division of Household Labor
Inequality in Social Security Income
An Issue for Public Policy: Social Security and Divorce
Inequality in Supplemental Security Income
Aging Around the World: Welfare State Restructuring for Gender Equity
Inequality in Employer Pension Coverage
Race, Ethnicity, and Inequality
Racial and Ethnic Differences in Poverty
Racial and Ethnic Variations among the Aged
Diversity in the Aging Experience: Retirement Security for People of Color

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 A lthough the elderly are less likely to be poor than younger

adults, there is still great income inequality among the aged.

© Design Pics/Con Tanasiuk RF

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Looking Ahead
1. What is the theory of cumulative disadvantage, and how does it explain gender, racial, and ethnic differences in material
well-being among the aged?
2. How do gender and marital status affect a person’s eligibility for Social Security benefits?
3. How does the Social Security benefit for spouses operate?
4. How do gender and marital status affect a person’s eligibility for employer pensions?
5. How do racial and ethnic groups vary in terms of their economic security in old age?

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 Sixty-four year old Ethel Roberts moved from her home in Alabama to Washington, D.C., when she
was in her 20s. After working for several years caring for the elderly, she married and became a stay-at-
home mom to her two children. Now she is divorced and works nights at the Christian Community
Group Home, making $8.50 an hour. Out of this meager salary, she pays $390 a month in rent, and
spends another $100 a month on food. She can’t afford a telephone or a visit to her brother (Shulman,
2006).
Nate and Selma Fiske are snowbirds. They spend their winters in Fort Lauderdale, Florida, in a
pleasant condominium community, and their summers in
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their hometown of Springfield, Massachusetts. Nate is a retired accountant, Selma a retired
bookkeeper. They live comfortably on Nate’s pension, the income from their investments, and their
Social Security benefits. The two have a large network of friends, retirees like themselves, with whom
they spend time playing golf and bridge, catching the “early bird” specials at local restaurants, and
enjoying visits from children and grandchildren.

Emma and Samuel Thompson, an African American couple, have been married 40 years. Both are in their
late 60s, and both still work fulltime. The couple is raising their two grandchildren, Alisha, age 7, and Martin,
age 5. Emma works on the janitorial staff of a large state university. Her shift begins at 5:00 A.M., so she
rouses her sleepy grandchildren at 4:00 A.M. to make sure they eat a healthy breakfast and get ready for school.
After she leaves, Alisha and Martin do their chores, then watch TV until the alarm on the kitchen clock
reminds them to head for the corner, where the school bus picks them up at 7:20. Samuel works at
construction sites, doing whatever work he can find. Both Sam and Emma would like to retire, but they can’t
afford to stop working. They have another generation to raise.
As these three vignettes indicate, people over 65 are no more alike in race, gender, social class, geographic
distribution, or living arrangements than are people in their 20s or 30s. Some struggle to make ends meet,
others live comfortably, and a very few are wealthy.
In this chapter we will explore inequality among the aged in the distribution of income, wealth, prestige,
and power. Throughout this book, we have addressed issues of inequality based on race, gender, and ethnic
origin in regard to such topics as work in later life (Chapter 10), health (Chapter 11), and care of the frail
elderly (Chapter 12). We have also considered how social class affects family relationships (Chapter 8) and the
distribution of income (Chapter 14). In this chapter, we focus primarily on economic stratification among the
aged. We first analyze the social and political processes that create gender inequality in old age. Next we
examine the racial and ethnic characteristics of the older population, and finally, we describe how minority
status affects access to income, wealth, and health care in later life.

AGING AND SOCIAL STRATIFICATION

The basic sociological approach to stratification views inequality as a product of social processes, not innate
differences between individuals. All human societies use sex, age, and kinship to assign people to social roles
and to rank individuals in a hierarchy. For example, the old are usually given authority over the young, males
over females. These rankings create the most basic forms of inequality and thus form the simplest type of
social stratification. As societies become more complex in the division of labor, more complex types of social
stratification emerge.
Class stratification appears in societies with growing economies, which require the specialized expertise
that creates a ranking within the occupational system. The dimensions of social class include economic
variables such as income and wealth, prestige variables that refer to a subjective ranking, and power, such as
political participation and the distribution of justice. When a full system of stratification is in place, “social
positions are ranked in terms of importance, rewarded differentially, acquired by individuals (and thus their
families) and transmitted over generations” (Rossides, 1997:12). The study of inequality is the study of social
stratification systems. The central question in the study of stratification is how social inequality is produced,
maintained, and transmitted from one generation to another.

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The Theory of Cumulative Disadvantage
The theory of cumulative disadvantage provides a life course framework for analyzing stratification systems
among the aged. According to this theory, inequality is not a static outcome but rather is a cumulative process
that unfolds over the life course (O’Rand, 1996a). The central premise of the theory is that although people
may move up or down the social ladder, generally those who begin life with greater resources have more
opportunities to acquire additional resources, and those who begin
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life with little fall further and further behind. Inequality is not random among the aged; rather, patterns of
who is systematically disadvantaged and who is advantaged exist. Although Social Security and Medicare
provide a cushion of support for millions of older people, they do not reduce inequality (Hudson, 2016).
Thus, the causes of the patterned differences in opportunities over the life course can only be understood in an
historical context.

Income and Poverty

Since the 1960s, when more than 30 percent of the elderly were poor, the economic circumstances of people
over 65 have improved significantly. But not all older people have shared equally in these gains. The minority
aged are more likely to be impoverished than whites and older women more so than men (Sullivan and
Meschede, 2016).
The poverty rate is the percentage of people below the poverty level. Among the older population as a
whole, poverty rates are lower than they are for people of other age groups. In 2014, 10 percent of Americans
aged 65 and older had incomes below the poverty level—a rate slightly below that for the population as a
whole (U.S. Census Bureau, 2015d). But certain subgroups of the elderly had very high poverty rates. As
Figure 15-1 shows, married couples fared better than the single elderly; the Hispanic and black elderly fared
worse than whites. Among all racial groups, however, women have higher poverty rates than men (Social
Security Administration, 2014d).

Figure Poverty Status, by Marital Status, Sex of Nonmarried Persons, Race, and
15-1 Hispanic Origin, 2012.

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 Source: Social Security Administration (2014d).

Income disparities by race and ethnic origin are due in part to differences in sources of income. Social
Security makes up a larger share of the total income of minorities than it does of whites, who are more likely
to have other sources of income.
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Figure 15-2 shows income sources among people 65 and older by race and ethnicity. The largest source of
racial disparity is income from assets—stocks, bonds, and rental property (Social Security Administration,
2014d). In 2014 only 39 percent of African Americans and 33 percent of Hispanics aged 65 and older
received income from these sources, compared with 65 percent of whites. Asians had more asset income than
other minorities. Whites were also more likely than either African Americans, Asians, or Hispanics to receive
income from pensions. As a result of these disparities, Social Security benefits are a much more important part
of the income of older minorities than they are for whites. Even though women and minorities depend more
on Social Security benefits for income than do white men, the benefits they receive are lower, as Table 15-1
shows.

Figure Sources of Income of People Aged 65 and Older, by Race and Hispanic
15-2 Origin, 2014.

Source: (Social Security Administration, 2014d).

Table 15- Average Monthly Social Security Benefit for Retired Workers by Gender and Race,
1 2009

White Black Other

Men $1,348 $1,120 $972

Women 1,025 960 836

Source: Social Security Administration (2010).

Women are also less likely than men to receive income from private pensions. As Table 15-2 shows, 30
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 Women are also less likely than men to receive income from private pensions. As Table 15-2 shows, 30
percent of white men 65 and older received income from a pension in 2002 compared with just 23 percent of
white women. A similar pattern existed for African Americans and Hispanics. Further, women and minorities
who do receive pensions have benefits lower than those of white men. Regardless of race or ethnicity, women
are less
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likely than men to receive pensions, and the amount of pension income they receive is lower.

Table Percentage of People Aged 65 or Older Receiving Pension Income, by Race, Sex, and
15-2 Hispanic Origin, 2002

White Black Hispanic

Men 30 17 10
Women 23 14 9

Source: Social Security Administration (2005).

These figures clearly document that inequality in old age is not random but rather demonstrates a
persistent pattern. How, then, can we explain this pattern? The answer lies in a process of cumulative
disadvantage associated with employment patterns over the life course. To a large extent, an individual’s work
history determines his or her income security in old age.

GENDER INEQUALITY IN OLD AGE

Patterns of Gender Inequality

Gender inequality in old age reflects the consequences of the gender division of labor in the household and
the effect of women’s familial responsibilities on their career patterns. Although women have always
performed the bulk of the unpaid labor in the home, in the past half century the amount of paid labor they
perform has increased dramatically. Between 1960 and 2009, the labor force participation rates of married
women rose from 30.5 to 70 percent. Equally striking is the rise in employment among mothers. In 1950,
only 13.6 percent of mothers with children younger than 6 and 32.8 percent of women with children aged 6 to
17 were in the labor force. In 2009, by contrast, 62 percent of women with children under age six and 77
percent of women with children ages 6 to 17 were in the labor force. (U.S. Bureau of Labor Statistics, 2010).
That is a remarkable transformation. Despite these gains in employment, wage inequality remains a pressing
issue. Over the past four decades women’s earnings have improved relative to men’s earnings. Yet a large wage
gap remains. In 2014 women who worked full time, year round, still only earned 79 percent of what men
earned. The median earnings for women were $39,621 compared with $50,383 for men (Hill, 2014).
Since 1965 women have reduced their housework hours almost in half, while men’s housework time has
almost doubled during this period (Bianchi et al., 2000). Yet women still do more household chores than
men. And of course, most divorced and unmarried mothers carry all of the burden of household labor. In “In
Their Own Words,” two women describe their daily schedules as they tried to coordinate work responsibilities
with family demands.
Because women shoulder a disproportionate share of household labor, their familial responsibilities
frequently disrupt their employment. Today, most women who are 65 or older have moved in and out of the
labor force to care for children and aging parents. Although younger women are considerably more likely than
older women to have continuous labor force participation, women of all ages are still more likely than men to
be out of the labor force (U.S. Bureau of Labor Statistics, 2009).
Marriage does have a positive effect on a woman’s financial situation in old age, but the majority of older
women will spend many years without a husband, because of either widowhood or divorce. As Figure 15-3
shows, income is lowest for women living alone.

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 Figure 15- Median Household Income by Household Type and Age of Householder,
3 2014.

Source: Social Security Administration (2014d).

Being single poses a particularly serious threat to the economic security of elderly minority women for
several reasons. Many black and Hispanic women have limited work histories, low lifetime earnings, and no
personal pensions. They are also more likely than white women to be married to men with low earnings and
little pension coverage. While all women who become widowed or divorced experience a significant loss in net
worth, this loss is far greater among African American and Hispanic women than among white women
(Angel et al., 2007).
The costs of a disorderly work history can be high, for women who move in and out of the labor
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force to care for their families are penalized by rules that determine levels of Social Security benefits and
access to private pensions. Thus, women’s familial responsibilities over the life course are reflected in the
distribution of economic resources in old age.

In Their Own Words

© McGraw-Hill Education/Andrew Resek

The Gendered Division of Household Labor

Many married women work two jobs, one that involves paid employment, the other as nonpaid domestic
labor caring for their families. Cecile and Annie describe their years of working full-time outside the home
and having primary responsibility for most household duties.

Cecile: And I found that…I was just so tired when I came home I couldn’t do anything. And of course, I’d worked
for 25 years and raised five children, you know. And I worked all day long, and of course when the children
were younger, I used to come home, even at lunch and put a roast or something in the oven and fix some-

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 thing for supper where I could just stick it in when I came in before the girls got larger, you know, where
they could do it…. And it was just when I came home, it was just go go go right on ’til the end, you know, to
go to bed.
Annie: It was important that we do our jobs and so that had to come first and everything else was built around
it…. Like bright and early every morning you’re up and you get the kids off to school and get your husband
off to work and then you get ready to go to work, and you put in your day and stop off on the way home
getting groceries, come in, fix supper, do dishes, do a couple of loads of laundry, run the sweeper and
whatever has to be done…. It was wild. I don’t know how I ever did it.

Source: Calasanti and Slevin (2001:128–29).

Many women work full-time and also assume

primary responsibility for household tasks.

© Photodisc/Getty Images RF

Inequality in Social Security Income

Women obtain access to Social Security benefits in two ways. The first is through their history of paid work;
the second is through their unpaid household labor, as dependents of male breadwinners (Williamson and
Rix, 2000).

Paid work and eligibility for Social Security Social Security is an extremely important program for women. Of
Social Security beneficiaries aged 62 or older, 58 percent are women; 71 percent of beneficiaries 85 or older
are women (Social Security Administration, 2005). As we saw in Chapter 5, people who have the highest
lifetime earnings receive the highest benefits. Historically, women have had lower earnings than have men. In
1959 women’s earnings averaged just 60 percent of men’s earnings. That ratio has since improved, and by
2009 young women aged 20 to 24 earned 93 percent as much as men and women aged 25 to 34 earned 88
percent as much as men. Overall, then, there has been a significant improvement in women’s earnings (U.S.
Census Bureau, 2011a). The decline in the earnings gap will improve economic security for younger women,
but women still earn less than men.
Social Security also rewards people who have stable work histories. Benefits are based on what a worker
has earned over 40 years, excluding the 5 years of lowest earnings or 5 years of zero earnings. A person who
worked continuously with no break receives higher benefits than someone who had periods out of the labor
force. Because of their familial responsibilities, relatively few older women have contributed to Social Security

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the full 35 years. Among people currently receiving Social Security benefits, men on average have zero
earnings for only one year out of 35; women average zero earnings for 12 years (Harrington Meyer and Herd,
2010).
There have been numerous options proposed for calculating Social Security benefits to take women’s
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work histories into account. The main approach is based on a strategy of gender recognition. This
approach presumes that gender equality can be achieved only by taking into account the differences between
men and women and taking measures to compensate the disadvantaged sex (Sainsbury, 1996). One proposal
based on this approach would eliminate the penalty mothers pay for taking time out of the labor force to care
for their children by removing periods of child care from the computation of Social Security benefit levels.
Another proposal would provide child care credit under a special minimum benefit (O’Rand, 1996b).
Although the idea of crediting parents for child care responsibilities has been criticized for being too
complicated to administer, other countries manage to do so. In Germany, for example, the Pension Reform of
1986 credited a mother (or father) with 75 percent of average earnings for one year for each child raised. In
1992, the number of child care years credited rose to three per child. In France, a parent who has stayed home
to care for a child is credited with two years of paid labor force participation for each child. In Canada, the
years in which a person stays home to care for a child under age 7 are dropped from the calculation of the final
pension benefit. In these countries, family caregivers won’t have years of zero contributions added into their
total contributions as they would in the U.S. (O’Grady-LeShane, 1993).
Because younger women today work more continuously than did women of older generations, the gender
disparity in Social Security benefits may decline in the future. Yet even by 2030 it is estimated that only 40
percent of women will have contributed to Social Security the full 35 years.

Unpaid work and eligibility for Social Security Women also obtain access to Social Security benefits through
their unpaid labor as dependents of male breadwinners. When Congress passed the Social Security Act in
1935, no provisions for wives and widows were included. Consequently, married retired men had insufficient
benefits to support two people, and if a retired man died, his widow had nothing. To redress these problems,
Congress amended the Social Security Act in 1939, adding a spouse benefit and a widow’s benefit. Today a
surviving spouse of a deceased worker is eligible for a reduced benefit at age 60 and a full benefit at age 66
(Harrington Meyer and Herd, 2010).
Originally, only wives were eligible for a spouse or widow’s benefit, but recent reforms in the Social
Security system have emphasized gender neutrality. Since 1972, a man has been eligible for a spouse benefit
when his wife retires or for a survivor’s benefit if his wife dies first. In practice, however, 99 percent of those
receiving spouse and survivor’s benefits are women (Harrington Meyer and Herd, 2010).
Under the law today, a woman (or man) who has been married for at least a year to a worker who retires at
65 can receive a spouse benefit at age 62. The spouse benefit is equal to 50 percent of the worker’s benefit.
Women (or men) who have worked outside the home for wages and who are also eligible for benefits as
spouses are considered dually entitled. Under the rules for dual entitlement, an individual receives a benefit as
a worker plus an additional amount if the worker benefit is less than the spouse benefit (Harrington Meyer
and Herd, 2008). If a retired worker dies, his or her survivor loses the spouse benefit but receives a survivor’s
benefit. The survivor’s benefit is equal to 100 percent of the worker benefit. Table 15-3 shows how Social
Security benefits are calculated for spouses and widows of retired workers.

Table 15- Calculation of Social Security Benefits for Retired Workers, Spouses, and
3 Widow(er)s

Type of Recipient Social Security Benefit Average Monthly Benefit, 2005

Retired worker Receives higher of: own benefit as a worker, or 50 $1,357

percent of spouse’s benefit (i.e., “dually entitled”)

Receives: 862
50 percent of spouse’s benefit

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Spouse ineligible for retired worker benefit
(i.e., did not work sufficiently in covered
employment)
Widow(er) Receives higher of: deceased spouse’s retired-worker 1,150
benefit, or own benefit as a worker

Source: Social Security Administration (2006b).

Current law favors the traditional family in which the husband is the sole earner. The replacement rates
are the percentage of preretirement income that Social Security replaces for a retiree. Table 15-4 shows
replacement rates for three couples with different earnings histories. In each family the husband’s average
earnings were the same: $4,774 a month but the wife’s earnings varied. In Couple A the wife never worked
outside the home for wages. At age 65 husband A would be entitled to Social Security benefits of $1,910 a
month and wife A would receive 50 percent of the husband’s benefit, $955. The total replacement rate for
Couple A would be 60 percent. In Couple B the wife average earnings were $2,387, about half of what her
husband earned. She would be eligible for
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a Social Security benefit of $1,195 so Couple B’s total replacement rate would be 43.4 percent. In Couple
C the husband and wife had equal career average earnings and each received the same Social Security benefit.
Their combined benefit gives them a replacement rate of 40 percent. Thus, the couples with two high earning
spouses received the highest benefits in absolute dollars but the lowest benefit in terms of replacement rates
(Wu et al., 2013). So married couples have benefitted from the increase in women’s labor force participation
over the past decades in terms of the amount of Social Security, but replacement rates actually favor the
household with a single earner.

Table 15-4 The Effect of a Wife’s Earnings on a Couples’ Replacement Rate

Husband’s SS Couples Replacement

Couple Husband’s Earnings Wife’s Earnings Benefits Wife’s SS Benefits Total SS Benefits Rate

A $4,775 $0 $1,910 $955 $2,865 60.0%

B $4,775 $2,387 $1,910 $1,195 $3,105 43.4%

C $4,775 $4,775 $1,910 $1,910 $3,820 40.0%

Source: Wu et al., 2013.

The loss of the spouse benefit is one reason the income of a married woman drops when she becomes a
widow. She loses one-third of the Social Security income she and her husband enjoyed as a couple. A
woman’s risk of poverty increases even more if she gets a divorce. Under Social Security rules, an ex-spouse is
eligible for a spouse benefit if she (or he) is at least 60 years old, had been married at least 10 years, and is not
currently married. Here’s how the spouse benefit works in the case of a divorce. Consider another average
couple, Mr. and Mrs. Savich. Should they divorce, Mrs. Savich would receive only the spouse benefit of $432,
while Mr. Savich would receive his retired worker benefit of $864. If Mrs. Savich happened to be only 57
when her former husband retired, she would be ineligible for any benefits from Social Security until she
turned 60, even if Mr. Savich had been her
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sole source of support their entire marriage. For some criticisms of the divorced spouse benefit, see “An
Issue for Public Policy.”

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 An Issue for Public Policy

© Photodisc/PunchStock
RF

SOCIAL SECURITY AND DIVORCE

W hen the Social Security system was designed in 1935, divorce was uncommon. Thus when Congress
added benefits for the wives and widows of retired workers in 1939, legislators paid little attention to the
needs of divorced women. By the 1960s divorce had become more common. At retirement, many women
found they had no right to their former husbands’ Social Security benefits. To protect divorced spouses, in
1965 policymakers added a provision allowing the lower earner in a divorced couple to keep the spouse
benefit (one-half of the primary worker’s benefit), provided the marriage had lasted at least 20 years.
The problem with this provision was that a low-earning spouse—nearly always the wife—was ineligible
for the spouse benefit even if she had been married for 18 or 19 years. Thus many divorced women still had
little or no income in old age. In 1977 Congress, acknowledging that older divorced women were still at
risk of extreme poverty, extended eligibility for the spouse benefit to women who had been married for only
10 years. If the primary worker remarried, the divorced spouse would still get the spouse benefit. But if the
divorced spouse remarried before reaching age 60, she forfeited her claim to the benefit. Remarriage after
60 would have no effect on eligibility (Social Security Administration, 2016a). (Although both divorced
men and women were eligible for the benefit, in practice few men received it; most recipients were women.)
Today many more people are affected by the divorce provision than policymakers ever expected. Four
out of every 10 couples who marry are likely to divorce, and fewer divorced people now remarry.
The criteria for awarding Social Security benefits after a divorce have produced some strange results.
Consider these quirks:

The death of a former spouse can provide a payoff, because the spouse benefit becomes a survivor’s
benefit (100% of the primary worker’s benefit) when a former spouse dies.
Protecting divorced women doesn’t necessarily protect the neediest women. A divorced woman who
never worked outside the home but was married to a high earner may receive higher Social Security
benefits than does a low-income single mother who worked and contributed to Social Security while
raising her children.

Few proposals for Social Security reform have addressed the perverse incentives created by the extension
of benefits to divorced people. Should the eligibility criteria be revised to reflect changes in the family? One
proposal under consideration would establish a universal minimum benefit to ensure that no older person
falls into poverty. Although divorced women do need protection, policymakers should be able to establish
better criteria than those currently in place.

What Do You Think?

1. Has divorce limited the amount of Social Security income someone you know receives? If so, explain.
2. Would you favor reforming Social Security to eliminate inequities in the distribution of spouse benefits?
If so, what kind of solution would you propose?

As these examples make clear, Social Security was designed to correspond to a particular family type—the
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 As these examples make clear, Social Security was designed to correspond to a particular family type—the
traditional family in which the husband was the sole breadwinner, the wife was a family caretaker, and the
marriage was permanent. That model fit the typical family in 1935, when only 22 percent of women were in
the labor force and divorce rates were much lower than they are today.
By 2010, the typical family no longer consisted of a male breadwinner and a female caretaker. Because the
majority of married women were in the labor force, more women are eligible for Social Security benefits on
the basis of their own earnings history, rather than their spouses’. Yet many working women receive no more
in benefits than married women who have not worked outside the home for wages. This disparity has led to
accusations that Social Security is unfair to working women and has prompted some critics to question the
value of the spouse benefit (Harrington Meyer and Herd, 2010).
Yet the spouse benefit has been important in providing income for older women; it recognizes that family
caregiving has value; and it allows women to stay home and care for their children if they choose to do so.
Without the spouse and widow benefits, many older women would be destitute. An alternative solution would
be to increase the survivor’s benefit for low-income, two-earner families from one-half to two-thirds—the
same as
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for a one-earner household. In light of changing female labor patterns and family composition, some
reevaluation of how these benefits are distributed seems justified. The precise solution remains a subject of
debate (Fitzpatrick and Entmacher, 2000). Many countries have been experimenting with new policies to
support working women over the life course. “Aging Around the World” discusses some policies adopted in
European nations.

Inequality in Supplemental Security Income

A program already exists for alleviating poverty in old age; but it succeeds only in theory. As we saw in
Chapter 5, Supplemental Security Income, or SSI, provides income for the aged, blind, and disabled poor. To
qualify, an individual must be 65 or older, blind, or disabled and have an income below a certain level.
Nearly 74 percent of the aged who receive SSI benefits are women, and more than one-third are very old,
over age 80. The problem with SSI is that the average monthly benefit is very low. In 2016 the Social Security
Administration paid just $733 a month to SSI recipients. The benefit for a married couple was $1,100. Some
states add a supplemental payment that increases the amount somewhat. If you think for a moment about just
the cost of rent, utilities, and food, you can see that it would be very difficult to live on less than $700 a
month. And of course, everyone has other expenses, such as for
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clothing, transportation, and medical care. The low level of SSI benefits explains why an older, single
woman in the U.S. is at such a high risk for poverty. The safety net has a big hole in it.

Aging Around the World

© M. Llorden/Getty
Images

WELFARE STATE RESTRUCTURING FOR GENDER EQUITY

Rising public budgets are not the only challenge facing

351 all western nations. Rather, welfare states
 Rising public budgets are not the only challenge facing all western nations. Rather, welfare states
designed for an industrial economy and the male breadwinner family type are retooling for service-oriented
economies where dual-earner and female-headed households are becoming the norm (Esping-Andersen,
2009). Further, rising divorce rates and increasing numbers of out-of-wedlock births and single parent
households also have generated new needs (Castles et al., 2010). In response to new needs associated with
changing family structure and the rising labor force participation of women, some nations have begun to
restructure their social programs to improve support systems for working women across the life course.
Throughout most of Europe, female educational attainment now exceeds that of males, and, in several
countries, female labor force participation, even among mothers with young children, has soared. For
example, in Sweden only 38 percent of mothers with small children were employed in the early 1960s
compared with 82 percent in the 1980s. Beginning in the late 1960s, Sweden consciously moved toward a
dual-breadwinner nation by introducing separate taxation for married couples, generous parental leaves,
universal, state-run day care, and policies to encourage greater involvement of fathers in child rearing.
Sweden also expanded the definition of work to allow pension credits to be earned for child rearing as well
as for military service, spells of illness, unemployment, and disability (Anderson et al., 2008). Most Swedish
women working part-time have full benefits and the right to work three-quarters time while their children
are young. Thus, Swedish women remain full participants in the public pension system. In the Nordic
countries as a whole, the full-time housewife has basically disappeared with part-time work serving as a
bridge between childbirth and full-time employment (Esping-Andersen, 2009). France also has an array of
services and subsidies to support dual earner families.
Although some nations have allowed women to earn pension credits for care work, these measures are
insufficient to guarantee gender equity. Rather family policies that support working mothers and encourage
men to take a more active familial role reduce the penalty women pay for caregiving responsibilities. Such
policies recognize that the ability to have secure retirement income for most women depends on
interventions earlier in the life course.

Poverty among older women is less of a problem in other Western nations. The U.S. is the only country
where single elderly women have higher rates of poverty than do older couples (Garfinkel
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et al., 2010). The reasons for this situation lie in the way the safety net is constructed. In the U.S., the
safety net for the aged poor consists of SSI, Social Security, and food stamps. An elderly person eligible for all
three benefits would still have an income below the poverty level. By contrast, there are virtually no poor
among the Swedish elderly, and the elderly in the Netherlands experience only a small risk of poverty
(Garfinkel et al., 2010). These countries manage to keep older women out of poverty by providing a universal
basic pension available to all older people, which is set sufficiently above the poverty level.
Given the high proportion of older women on SSI, a simple way to eliminate poverty would be to raise the
SSI benefit above the poverty line. Most SSI recipients remain desperately poor.

Inequality in Employer Pension Coverage

Social Security provides a modest floor of protection in old age, but it was never designed to provide full
income security in retirement. Rather it is one leg of a three-legged stool that also includes personal savings
and pensions provided by employers. Most people are able to maintain their previous living standards in
retirement only if they have employer pensions, personal savings, and some investments.

Pension benefits The primary factor that determines access to a pension is the individual’s job, and
historically, women have worked in jobs that lack pension coverage. More recent statistics tell a different
story. Among Baby Boomers, men and women are equally likely to be included in an employer pension plan
(Wright, 2012). That is a noticeable change from previous generations.
Although younger women are catching up to men in terms of pension coverage, most older women lag
behind in the amount of pension income they receive. Fewer years of total employment and more intermittent
employment reduce pension benefits. That is the penalty women pay for performing most of the unpaid

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household labor. In 2003 the average pension benefit for a woman was $4,161 a year, compared with $7,678
for a man (U.S. Bureau of Labor Statistics, 2003).

Survivor’s benefits Unlike Social Security, which pays a spouse benefit while the retiree is still alive, private
pension plans pay benefits only to the worker. When the worker dies, the survivor may receive a survivor’s
pension, but not necessarily. Until 1984, a husband could waive his wife’s right to a survivor’s benefit without
her knowledge. In many cases, widows were surprised to find that they had no survivor’s benefits because their
husbands had signed them away. Divorced women also found that they had no legal right to a share of their
spouse’s private pension.
The Retirement Equity Act of 1984 (REA) protected spouses in the event of a death or divorce. Pensions
for married employees now must be joint and survivor annuities. This means that the worker must take a
reduced pension for life and the spouse must get a 50 percent survivor’s pension unless both husband and wife
agree, in writing, to waive the survivor’s pension (American Association of Retired Persons, 1994; ssa.gov,
1984). A husband can no longer sign away his wife’s right to survivor’s benefits without her knowledge.
Usually the decision to waive survivor’s benefits is economically motivated; couples who choose to receive
them get lower benefits while the husband is alive. For example, a 65-year-old man with a 62-year-old wife
might be entitled to a pension benefit of $1,000 a month for life. If he and his wife waive the survivor’s
benefit, his wife receives nothing when he dies. If they take the benefit, they will receive only $890 a month,
but his widow would receive a survivor’s benefit of $445 after his death (Donovan, 1985).
The Retirement Equity Act also allowed pension-splitting to become part of a divorce decree. Now the
pension is considered part of the property settlement. Following a divorce, a wife might be entitled to half her
husband’s pension benefit, or vice versa.
A gap in protection for many widows and former wives remains in effect, however, for the Retirement
Equity Act applies only to private sector workers. Because state pension plans are excluded
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from federal law, not all state and local government workers are regulated by the REA. Presently, only 11
states have provisions requiring spousal consent to waive survivor pensions. Thus, some widows still find to
their dismay that they have no pension rights to their deceased husbands’ benefit. Although in the future,
women will be somewhat more likely to have pension coverage in their own names, thousands of wives of
state and local government workers will remain vulnerable to old-age poverty until states extend the protection
of the Retirement Equity Act to them.
As the preceding discussion makes clear, the unequal risk of falling into poverty is not merely an accident
of fate. Rather, it is a consequence of political decisions about eligibility rules that create institutionalized
mechanisms that penalize women for earlier life choices and restricted labor market opportunities.

RACE, ETHNICITY, AND INEQUALITY

In the U.S. social classes do not form a clearly defined set of strata; rather, there are multiple dimensions of
inequality. People’s life chances and opportunities are partly conditioned by their racial and ethnic
backgrounds.

Racial and Ethnic Differences in Poverty

There is a stark contrast in the percentage of whites living in poverty as compared to Hispanics and blacks. In
2012, 9.7 percent of non-Hispanic whites (18.9 million) were living in poverty, while over a quarter of
Hispanics (13.6 million) and 27.2 percent of blacks (10.9 million) were living in poverty. The figures are more
dismal when looking at the rates for deep poverty. Compared to whites, Hispanics are more than twice as
likely to live in deep poverty, and blacks are almost three times more likely to live in deep poverty. In 2012,
12.7 percent of blacks, 10.1 percent of Hispanics, and 4.3 percent of non-Hispanic whites were living in deep
poverty (U.S. Census Bureau, 2014a). These differences in the risk of being poor earlier in the life course
translate into differences in poverty rates in old age. In 2012, 7.7 percent of the older white population had
income below the poverty level compared to 18 percent for blacks, 15 percent for Asians, and 18 percent for
Hispanics (U.S. Census Bureau, 2014b).

Wealth acts as a buffer against the risk of poverty. People with assets in the form of savings, property, and
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 Wealth acts as a buffer against the risk of poverty. People with assets in the form of savings, property, and
investments can supplement their income with the economic resources provided by wealth. Racial and ethnic
disparities in wealth mirror the disparities in poverty risk. In 2013 white households had about $141,900 in
assets compared to just $11,000 for African Americans and $13,700 for Hispanics (Sullivan and Meschede,
2016). In the following sections, we examine some of the causes of these disparities.

Racial and Ethnic Variations among the Aged

There are significant differences in economic security in old age between minority groups and also between
individuals within minority groups. In the following sections, we analyze the distinctive historical patterns
among various minority groups that have created similar outcomes for their elderly members.

The African American elderly African Americans are the largest minority group in the U.S. The economic
position of older blacks today can be understood only from a life course perspective of cumulative
disadvantage. Because of racial discrimination, African Americans have always experienced higher rates of
unemployment than whites, more sporadic employment, and lower wages. In 1960, black men earned only 58
percent of what white men earned, and most black women were employed as domestic servants (see Chapter
10). African Americans seldom worked side by side with whites in the same job and seldom received the same
pay if they did (Farley, 1996). Significant racial disparities in income still exist. In 2014 the median household
income for non-Hispanic whites was $56,866 compared with $35,398 for blacks (U.S. Census Bureau, 2015).
Lower earnings during their working years means
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lower Social Security benefits in retirement. Sporadic employment also means less opportunity to become
vested in private pension systems and less opportunity to accumulate pension savings.
Racial discrimination has also impeded the accumulation of wealth by blacks. In 2013 the average net
worth of whites was $141,900 compared with just $11,000 for blacks (Veghte et al., 2016). That represents an
increase in the black-white wealth gap since 1983. Part of the racial disparity in wealth is due to differences in
home ownership. The home is the single most important asset of most Americans. Although home ownership
rates have increased for all people in the past decade, significant racial and ethnic differences in home
ownership remain. As Table 15-5 shows, 74 percent of non-Hispanic whites owned their own homes in 2010
compared with 45 percent of African Americans, 59 percent of Asians, and 47 percent of Hispanics (U.S.
Census Bureau, 2010). The value of homes owned by blacks and Hispanics is also lower.

Table 15-5 Home Ownership Rates, by Race and Ethnicity, 1996–2010

1996 2016

White, non-Hispanic 72% 74%

African American 44 41

Asian 51 59
Hispanic 43 45

Source: U.S. Census Bureau (2016).

Why is housing wealth so much lower for African Americans? The answer lies in a legacy of racial
discrimination by real estate agents, white neighborhoods, and the federal government. For most of the
twentieth century, African Americans were relegated to racially segregated neighborhoods. Racial segregation
became part of official federal housing policy in 1934, when Congress established the Federal Housing
Authority (FHA) to enable people to buy homes by insuring banks against defaults on mortgage loans. FHA
policy encouraged redlining: Red lines were literally drawn on maps around areas of cities where loans were
considered risky for economic or racial reasons. Redlining meant that most black families were ineligible for
federally insured loans. Until 1949, the FHA also encouraged the use of restrictive covenants banning African

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Americans, Asians, Hispanics, and in some cases, Jews and Catholics from white Protestant neighborhoods;
the FHA also refused to insure mortgages in integrated neighborhoods (Conley, 1999). Many blacks and
other minorities who are now old were victims of these practices.
Although now illegal, racial discrimination in access to housing remains embedded in the practices of
private lenders (Myers and Chung, 1996). There is also evidence that racial and ethnic discrimination
occurred during the recent crisis in the housing industry. In 2010 Countrywide Financial, which is owned by
Bank of America, was ordered to pay $335 million to more than 200,000 people who were discriminated
against on the basis of race. The Department of Justice found that, between 2004 and 2008, Countrywide
Financial had charged African Americans and Hispanics higher interest rates and steered them into riskier
loans.
FHA policy and continuing racial discrimination in lending practices have had a lasting impact on the
asset accumulation of African Americans. One consequence, already noted, is that fewer blacks own their own
homes. Another consequence is that because of housing segregation, most blacks who purchased homes did so
in central cities. Instead of benefiting from the housing boom of the 1980s, when real estate prices rose
dramatically, their investments often declined in value (Oliver and Shapiro, 1995).
The unequal distribution of wealth perpetuates cumulative disadvantage. Because older African Americans
have less wealth than do whites, most have less income security for their own old age and no fail-safe system if
an emergency depletes their resources. They also have less to pass on to their children. As a result, racial
inequality in wealth accumulation is transmitted to the next generation.
Since 1965, there has been significant progress in the economic and social status of African Americans on
many fronts. As civil rights laws ended segregation, the number of blacks and whites attending college
reached near parity, the number
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of black elected officials increased, there was a sizable increase in the number of black men and women
holding professional positions, and the income gap between blacks and whites declined (Conley, 1999).
Despite these gains, the median income of black elders relative to white elders actually fell in the past decades,
from 70 percent in 1967 to only 60 percent in 2000 (Hudson, 2002). Persistent inequality of opportunity over
the life course means continuing inequality in old age.

The Hispanic elderly The term Hispanic refers to individuals who identify themselves as Spanish in origin.
Hispanics have migrated to the U.S. from Mexico, Cuba, Puerto Rico (a U.S. territory), Central and South
America, and Europe. Of the more than 55 million people of Hispanic origin in the U.S., the three largest
groups are from Mexico, Puerto Rico, and Cuba (Pew Research Center, 2016). Thus, it’s important to
recognize that the term Hispanic includes people who differ significantly in cultural beliefs, race, education
level, and income.
Many people of Mexican origin have lived in the U.S. for centuries. Their ancestors lived on land that
belonged to Mexico until it was annexed by the U.S. in 1850. Others came during and after World War II
under a program to bring in guest workers. The most recent Mexican immigrants are relatively young and
heavily concentrated in a few states, especially California and Texas. Many Mexican Americans have worked
as migrant laborers, toiling in the fields, moving from job to job, and receiving no benefits.
Cuban Americans immigrated to the U.S. in two waves. The first, during the 1960s, was a political
migration of people fleeing Fidel Castro’s communist government. Most of these early migrants were drawn
from the Cuban upper and middle classes, and they arrived with high levels of education, skills, and capital.
These Cubans formed tight-knit ethnic enclaves in the cities where they landed, especially in Miami. They
used the wealth they brought with them to build businesses, and many have prospered. A second wave of
Cubans arrived in 1980 when Fidel Castro allowed a flotilla of small boats to depart from the port of Mariel.
The Mariel Cubans were less educated than the first wave, came from lower social classes, and have not fared
as well.
Of all groups of Hispanic origin, Puerto Rican families are the most disadvantaged. Many who left Puerto
Rico for the mainland dwell in segregated enclaves in large urban areas. They left the island because they were
very poor but found few opportunities for good jobs and adequate housing when they arrived. Among all

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Hispanic groups, they have the lowest rates of labor force participation and the lowest levels of education
(Sandefur and Tienda, 1988).
The differences among the Hispanic-origin groups are reflected in income. Cubans as a group have higher
income than others classified as Hispanic. In 2005 the median income for Cubans was $43,621, compared
with $25,788 for Mexican Americans and $23,296 for Puerto Ricans. Poverty rates among Hispanics follow
the income patterns for the three groups. In 2005 poverty was highest among Puerto Ricans at 32 percent, in
the middle for Mexicans at 22 percent, and lowest for Cubans at just 10.9 percent (U.S. Census Bureau,
2005a). Overall, the median income for Hispanic households in 2014 was $42,200 compared with $61,317 for
non-Hispanic whites (Pew Research Center, 2016; U.S. Census Bureau, 2014b). There is also a significant
wealth gap between whites and Hispanics. In 2013, the average Hispanic household had just $13,700 in
wealth on average (Veghte et al., 2016).
Because many older Hispanics worked in occupations not covered by Social Security, they are ineligible for
Medicare. A barrier that prevents many Mexican Americans from participating in Social Security is that they
never became legal residents of the U.S., even though they may have lived and worked in this country for
decades (Angel, 2003). Many younger people of Hispanic origin also lack health insurance for the same
reason that older Hispanics are ineligible for Medicare. In 2014, 20 percent of Hispanics were uninsured,
compared with 12 percent of African Americans, 9 percent of Asian/Pacific Islanders, and 8 percent of whites
(U.S. Census Bureau, 2015e). On a more positive note, health insurance coverage has improved for all groups
since the Patient Protection and Affordable Care Act of 2010 has been passed.
Older Hispanics and African Americans have had irregular patterns of work because they typically
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worked in sectors of the labor force where layoffs are common or work is seasonal. A lifetime of work in
low-status jobs characterized by sporadic work patterns, high turnover, and low earnings has cost older
minorities pension income. Unstable, poorly paid work translates directly into less access to private pensions
for older African Americans and Hispanics. This helps to explain why a higher percentage of their income is
from earnings than is the case for whites. The lack of pension benefits often forces minority group members
to continue working even after they reach age 65.

The Asian elderly Asians are the fastest growing minority group in the U.S. They have the highest incomes
and are the best educated. In 2011 there were 18,205,898 people in the U.S. classified as Asian American
(Pew Research Center, 2015b). Like Hispanics they come from many different countries including Vietnam,
China, Japan, the Philippines, Korea, Hawaii, and the Pacific Islands.
Among elderly Asians there are a small number of surviving Chinese men who immigrated to the West
Coast early in the twentieth century to build the railroads. Because there were so few women immigrants,
many of these men never married. As a result, they faced old age with no family support system. Some of
today’s Asian elderly are the children of these first immigrants. They tend to be less educated and more
economically deprived than later Asian immigrants. When the Chinese immigrants arrived in the U.S., whites
who lived on the West Coast feared their culture and lobbied to ban more Chinese from entering. In 1917,
the U.S. closed its borders to Asian immigrants.
Many of the Japanese who are now old lost all their property during World War II when they were placed
in prison camps. More numerous are Asians who began arriving in the U.S. in 1952 after the long-standing
prohibition on immigration from Asia ended with token quotas of 100 a year from China and Japan. These
immigrants were subject to laws that prevented them from buying property or holding public jobs. In 1965, in
the wake of the civil rights movement, Congress allowed 290,000 immigrants to enter the U.S. each year,
although no more than 20,000 were allowed from any one country. Following this loosening of immigration
restrictions on Asian immigrants, a new wave began arriving. Many from Vietnam and Cambodia came to the
U.S. in the 1970s as political refugees. More recently, immigrants have come from China, Japan, and Korea to
obtain educations. Many receive advanced degrees (Farley, 1996).
Despite a history of discrimination against them, many Asian Americans have transcended the barriers
placed before them. Asian Americans are the most prosperous group of immigrants. In 2011 median income
for Asian Americans was $62,000 compared to $49,800 for the rest of the country (Pew Research Center,
2015b), and rates of home ownership were 54 percent (U.S. Census Bureau, 2011a). Their prosperity can be

356
explained in part by the high value many place on education. Asians remain in school the longest among
minorities and are most overrepresented among those getting college and professional degrees (U.S. Census
Bureau, 2011b). Among recent Asian immigrants, 61 percent have a college degree (Pew Research Center,
2015b). Due to all these factors, Asians as a whole have the lowest rates of poverty in old age of any minority
group. Indeed, older Asian women have lower poverty rates than older white women.

The Native American elderly In 2014 there were slightly over 5 million people classified as American Indians
or Eskimos in the U.S. (Peralta, 2014). The largest Native American groups, in descending order, are the
Cherokee, Navajo, Chippewa, and Lakota. In 2005, 51 percent lived on reservations or tribal lands; the others
lived in rural and urban areas (U.S. Census Bureau, 2005a).
American Indians Native Americans have the highest unemployment rates and the highest mortality rates
of any minority. In 2014, more than one quarter of Indians lived below the poverty level (Peralta, 2014), and
median household income of those working full-time year-round was substantially lower than that of other
groups. The high levels of poverty among elderly Native Americans reflect the outcome of more than a
century of federal policy toward indigenous people. In the late nineteenth century, the federal government
created the reservation system in remote and often destitute settings, where tribes
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languished in isolation with little prospect for development or economic growth. Indian education has
been the responsibility of the federal government, which operated day schools on the reservations in the
nineteenth century and then established boarding schools for Indian youth in the twentieth century to
acculturate Indians to the dominant society (Nagel, 1996). Many of these schools were poorly equipped and
poorly run. As a result, American Indians are the most poorly educated of all minority groups. According to
the 2005 Census, only 7 percent of all Native Americans had college degrees.

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 Many older Native Americans live far from any source
of health care.

© Bob Cross/Getty Images

During World War II, many Native Americans left the reservations and many never returned to live
permanently. Federal Indian employment and urban relocation programs established in the 1950s and 1960s
were designed to end the era of reservation life, train Indians for wage labor jobs, and relocate trainees to
urban areas. Between 1952 and 1972, more than 100,000 Native Americans were relocated to urban areas.
Some returned to the reservations, but many stayed in the cities. As a result of the outflow of young people,
many Indian elderly were left isolated on reservations.
In the 1970s and 1980s, the federal government settled hundreds of claims for land that had been
confiscated a century earlier. Some tribes received as much as $40 billion. The new resources created a
resurgence of people claiming their Indian heritage (Nagel, 1996). Although land-claim settlements and
legalized gambling have made some tribes prosperous, the benefits have not been evenly distributed. On many
reservations, the elderly remain impoverished.
In 2000, only a small number of Native Americans, 7.2 percent, were 65 or older (U.S. Census Bureau,
2004a). High mortality has reduced life expectancy and decreased the number of Native Americans who
survive to old age. The federal government has the responsibility for providing health care for all Native
Americans who align with or are members of tribal organizations. The legal foundation of the Indian Health

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Service (IHS) is defined in federal treaty obligations, stipulating that health care be provided Native
Americans at no cost as reparation for tribal lands stolen from them. Since health care became the
responsibility of the federal government, the general health of the majority of Native Americans has
improved, life expectancy has increased, and mortality rates have dropped. On the negative side, IHS-funded
services for the Indian elderly provide few chronic and long-term-care services. Another problem is that many
older American Indians who live on or near reservations are unable to obtain health care on a regular basis
because they lack transportation (Boccuti, 2015). Even those who are eligible for Medicare often cannot pay
the out-of-pocket costs that Medicare does not cover. Thus, many health care needs of the Native American
elderly remain unfulfilled.
The cumulative disadvantages that people of color face over the life course makes it more difficult for
them to prepare for retirement. The “Diversity in the Aging Experience” feature explains why minorities are
likely to be less financially secure in old age compared to whites.
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Diversity in the Aging Experience

© Bob Cross/Getty Images

RETIREMENT SECURITY FOR PEOPLE OF COLOR

Having access to a pension and being able to save for retirement early in life is critical for income security
in old age. Yet workers of color, especially Latinos, are significantly less likely than white workers to be
covered by an employer-sponsored retirement plan of any type, either a defined benefit or a defined
contribution plan. In 2012 only 54 percent of Black and Asian employees and 38 percent of Latino
employees age 25–64 worked for an employer that offered a retirement plan. By contrast, 62 percent of
white employees were covered by employer-sponsored pension plans. Those minorities that do have a
retirement plan are much less likely than whites to be offered a defined benefit plan that guarantees a
lifetime retirement income.
Personal savings are also a source of income security in later life, and minorities are much less likely to
have retirement savings than whites of the same age. A substantial majority of Black (62 percent) and
Latino (69 percent) working-age households have no funds in a retirement account compared just 37
percent of white households. Minorities that do have money saved for retirement have much lower savings
than whites. Seventy-five percent of Black households and eighty percent of Latino households age 25–64
have less than $10,000 in retirement savings. Among those nearing retirement (age 55 to 64), Blacks have
an average of just $33,000 saved compared to $206,000 for whites (Rhee, 2013b). Table 15-6 shows
average retirement savings by age and race/ethnic origin. The lack of access to a pension plan and difficulty
saving for retirement perpetuates inequality in old age.

Table 15- Mean Retirement Savings of Working-Age Households, (by race and age group,
6 2010)

Age of Head of Household

Race of Head of Household ALL 25–64 25–34 35–44 45–54 55–64

White $111,749 $17,771 $57,822 $129,500 $206,400

Black $20,132 $4,792 $16,508 $24,606 $34,365

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 Latino $17,00 $5,330 $12,048 $29,651 NA

Source: Rhee (2013b).

What Do You Think?

1. Have you started saving for retirement?
2. How important is it to have a job that provides pension benefits?

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Minorities in Canada and Europe Inequality in old age because of race or ethnicity is not unique to the U.S.
Minorities elsewhere also suffer the consequences of cumulative disadvantage.
In Great Britain, waves of immigration occurred at different times and under different circumstances for
each ethnic group. The decade of great immigration was the 1950s; thus, an increasing number of ethnic
minorities are now British-born. The early 1960s brought an influx from the Caribbean; the early 1970s, one
from India and Pakistan; and the 1980s, another from Bangladesh and Hong Kong. Wars in the Middle East
have brought an influx of immigrants from Serbia, Iraq, and other Muslim countries in the 2000s. The
income of older men and women in these minority ethnic groups reflects their employment and earnings
history since their arrival in Britain. Their main sources of income are government pensions, earnings, private
pensions, and interest on savings and investments. Minority elders are more likely than white elders to depend
on means-tested benefits for their income, and less likely than whites to receive income from private pensions.
Although income from pensions varies by ethnic group, all racial and ethnic minorities in Great Britain have
less pension coverage and receive lower pension income than their white counterparts (Ginn and Arber,
2000).
In analyzing systems of stratification, the object of study is the social institutions that penalize certain
groups for having a fixed range of options and restricted opportunities. Inequality in outcomes is not random
or accidental. Rather, it is the result of political decisions made by some people who have the power to limit
opportunities for other people.
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Chapter Resources

LOOKING BACK
1. What is the theory of cumulative disadvantage, and how does it explain gender, racial, and ethnic
differences in material well-being among the aged? The basic sociological approach to stratification views
inequality as a product of social processes, not innate differences between individuals. The central question in the
study of stratification is how social inequality is produced, maintained, and transmitted from one generation to
another. According to the theory of cumulative disadvantage, inequality is not a static outcome but rather is a
cumulative process that unfolds over the life course. Women and members of racial and ethnic minorities have
lower incomes and higher rates of poverty in old age than do white males because of earlier experiences and
opportunities.
2. How do gender and marital status affect a person’s eligibility for Social Security benefits? Social Security is
an important source of income for nearly all older people. Those at the lower end of the income distribution—
women and minorities—depend most on this program, yet their average benefits are lower than those of white
men. Women and minorities receive lower Social Security benefits than white males because the eligibility rules
reward workers who have had continuous work histories and high-paying jobs. Women and minorities have more
sporadic records of labor force participation and receive lower wages than white men. As a result, their benefits
tend to be lower. The gender disparity in Social Security benefits may diminish in the future. One reason is that
women are working more steadily than in the past; when they reach retirement age, they will have had more
continuous work histories. Another reason is that the job stability of white males has declined. Also, the pay gap
between younger men and women has declined.

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3. How does the Social Security benefit for spouses operate? The spouse benefit supplements the retirement
income of a married couple by providing one-half of the retired worker’s benefit. When the worker dies, the widow
or widower loses the spouse benefit but retains a survivor’s benefit equal to 100 percent of the worker’s benefit. A
former spouse is eligible for one-half of the worker’s benefit but not until she or he reaches age 60.
4. How do gender and marital status affect a person’s eligibility for employer pensions? The same factors that
reduce Social Security benefits for women and minorities also affect their access to employer pensions. Low wages
and discontinuous work histories make many people ineligible for these pensions. The advantage of Social Security,
however, is that nearly 99 percent of older people (as mentioned in Chapter 5) receive some income from it. By
contrast, less than half of retirees receive income from employer pensions.
5. How do racial and ethnic groups vary in terms of their economic security in old age? Compared with
whites, African Americans have had higher rates of unemployment, more sporadic employment, and lower wages.
Lower earnings during their working years mean lower Social Security benefits in retirement. Sporadic
employment also means less opportunity to become vested in private pension systems and less opportunity to
accumulate pension savings. Because of past and continuing discrimination in the sale of housing, older blacks and
Hispanics are less likely than whites to own a home. Further, because of segregated housing patterns, the homes
owned by blacks are less valuable than those of whites.
Among the Hispanic aged, poverty rates vary by country of origin. They are highest among Puerto Ricans,
relatively high among Mexicans, and just slightly higher than whites’ rates among Cubans. The Asian
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American aged are the most prosperous group of immigrants. They have the highest median family income,
lowest poverty rates, and highest rates of home ownership. Native Americans have the highest unemployment rates
and the highest mortality rates of any minority. The high levels of poverty among elderly Native Americans reflect
the results of more than a century of federal policy toward indigenous peoples. The federal government has the
responsibility for providing health care for Native Americans, which has improved health care for this group.

THINKING ABOUT AGING

1. Which do you think has a more powerful effect on an aged person’s economic well-being: gender or race
and ethnicity?
2. From a purely economic point of view, would a young woman be better off in old age by marrying or by
staying single and working?
3. Why haven’t women’s organizations or retired people’s associations made the problem of poverty among
elderly women a priority? Should they be doing more to solve it?
4. What can government do to increase the economic security of minority group members in their old age?
5. Can you think of a way to increase the well-being of minority groups in their old age that does not involve
the government?

KEY TERMS
dual entitlement 336
gender neutrality 336
gender recognition 336
joint and survivor annuities 341
pension-splitting 341
redlining 343
restrictive covenants 343
Retirement Equity Act of 1984 (REA) 341
spouse benefit 336
survivor’s benefit 336

EXPLORING THE INTERNET

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1. Go to the website of the Social Security Administration (http://www.ssa.gov/) and click on Apply for
Retirement. Then click on Benefits for Your Spouse and then Divorced Spouse.
a. If you are the divorced spouse of a worker who dies, how long do you have to have been married to
receive benefits?
b. How old must your ex-spouse be before you can start collecting benefits?
2. The National Academy of Social Insurance (http://www.nasi.org/) contributes to the debate over the
future of Social Security by presenting information and briefs on the retirement program. Go to the
website and click on the link Devolution and the Social Welfare of Elderly Immigrants: Who Will Bear
the Burden? and answer these questions:
a. How many funds are part of the Social Security system?
b. What are the three forms of insurance provided by the Social Security system?
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351

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