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Antwort in : /alt/activism/d Absender : institute@igc.apc.org (Institute for Public Accuracy) Betreff : Women and Social Security: "Preposterous" Claims Datum : Mo 20.07.98, 22:26 (erhalten: 22.07.98) Groesse : 5719 Bytes ---------------------------------------------------------------------- Institute for Public Accuracy (202) 347-0020 * http://www.accuracy.org 915 National Press Building, Washington, D.C. 20045 ___________________________________________________
For Immediate Release: Monday, July 20, 1998
CLAIMS FOR PRIVATIZING SOCIAL SECURITY CALLED "PREPOSTEROUS" AS CRITICS SAY SCENARIO WOULD HARM WOMEN, NOT HELP THEM
WASHINGTON -- While a prominent think tank claimed Monday that privatizing Social Security would help American women, a past president of the American Economic Association called the conclusions "preposterous." Robert Eisner said the plan would actually harm women and severely damage Social Security as a system of social insurance.
The Cato Institute -- whose major contributors include American Express, the Chase Manhattan Bank, Citicorp, Fidelity Investments and other private firms -- asserted that women would be better off under a system of privately owned retirement accounts. But a number of specialists quickly disputed the claim and said that privatization would undermine Social Security as a dependable source of economic security.
Among those available for interviews are:
ROBERT EISNER
Eisner, a former president of the American Economic
Association, responded to the Cato Institute's call for Social
Security privatization Monday. "The conclusions strike me as
preposterous," Eisner said. "In the first place, they quite
ignore the fact that current Social Security is a system of
social insurance which insures that people get a minimum benefit
that hopefully keeps many out of poverty. It is set up so that
those at the bottom get in retirement a much larger proportion of
their earnings while they were working than those at the top."
But, Eisner said, "if you have private investment, those who
are earning a lot and investing a lot will get much more and
those who have little to invest will get much less. And women
actually earn much less, on the average -- so, to begin with,
since they're investing much less, they'll get much less."
In addition, Eisner said, "when you invest privately, all
you get at some point is a lump sum. Then you have the problem of
getting an annuity that will last you the rest of your life. The
private companies don't give you actuarially fair annuities. And
in a private system, you don't get an automatic cost-of-living
adjustment, which Social Security automatically provides."
GWENDOLYN MINK
"It is hard to imagine that any but the highest-paid women
workers could benefit at all from fully or partially privatized
Social Security," said Mink, author of the 1998 book "Welfare's
End" and a professor of politics at the University of California
at Santa Cruz. "Most women are not highly paid; in fact, women's
incomes are disproportionately low. If Social Security were
partially privatized, its funding base would be depleted. This
would eliminate `security' in Social Security and leave low-
income workers who must depend on public benefits extremely
vulnerable in retirement."
Mink added: "Fully privatized Social Security might be a
boondoggle for brokerages and investment counselors, but it will
leave low-income workers in an even more precarious position --
preyed upon by bad investment tips and unprotected against the
vagaries of the stock market. Social Security is supposed to
provide a safety net for the elderly, not an opportunity for the
rich to get richer and the poor to have even less to fall back
on. While there are gender inequities in the benefits structure
of Social Security, it nevertheless provides important basic
guarantees for women. We should improve Social Security, not
destroy it."
FRANCES FOX PIVEN
A scholar whose books include "Regulating the Poor" and "The
Politics of Turmoil," Piven responded to Monday's pronouncements
by Cato this way: "`Data' is being thrown in our eyes like sand.
A study that looks only at a boom period in the financial markets
doesn't tell us what happens to privatized pensions when the
markets go down. It also ignores the huge transition costs
entailed by diverting money into private plans, or the costs of
providing retirement security to at-risk groups like the
disabled."
Piven, who is Distinguished Professor of Political Science
and Sociology at the Graduate School and University Center of the
City University of New York, added: "In fact, the Social Security
program is an example of successful -- and popular -- government,
and conservatives are determined to demolish it. Cato is no doubt
inspired by the crazed conviction that markets should control
everything. Perhaps it is also influenced by the exciting
prospect that Wall Street could soon be raking in the profits
yielded by millions and millions of private pension accounts?"
DIANA ZUCKERMAN Zuckerman, director of research for the Institute for Women's Policy Research, said: "Virtually all of the privatization proposals that are under consideration include cuts in benefits that would pay for the costs of changing to a privatized system. Those cuts tend to be disproportionately harmful for women retirees.... By correctly describing the reasons that women are more dependent on Social Security, and then painting rosy forecasts that are apparently totally removed from the fiscal realities of policy making, the Cato reports do a tremendous disservice to women retirees."
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For more information, contact: Theresa Caldwell or Sam Husseini, Institute for Public Accuracy, (202) 347-0020.
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