by Janine G. Bauer
U.S. 1’s 2009 Women in Business Issue is an important forum for so many issues women face every day in their personal and professional lives. The economy impacts all of us, and women are especially vulnerable to layoffs and other cost saving measures businesses take to remain solvent. No issue is more important right now than financial security, so let’s take a few minutes to discuss it.
We don’t want to burden our children when we are older. We want to be independent now, and as we age. With the divorce rate at 50 percent, a husband is not a financial plan.
Financial security will best come from some kind of rough equality in pay and retirement savings. Except for a small sliver of professionals, most women still make about 76 cents on the dollar, compared to men’s wages and salaries. That means we’re paying less into the 401K or pension, and Social Security. Because we live longer, those savings won’t stretch as far later (say, from age 65 to 85).
Is your pay fair and equal? Remedying pay discrimination is a good place to start building financial security. New Jersey has a state law against gender discrimination, and Title VII of the federal Civil Rights Act prohibits pay discrimination. Women rarely use them, however, and they are often inadequate even when used. In a recent case that says it all, it took an act of Congress to overturn a Supreme Court decision to get Lily Ledbetter fair wages after Goodyear Tire & Rubber Co. discriminated against her for almost two decades. Lilly Ledbetter discovered she was being paid much less than all of her male counterparts after 19 years. A jury awarded her $223,776 in back pay, and punitive damages. Appeals followed. Then the U.S. Supreme Court took away every penny of her back pay and damages, because a claimant must file within 180 days. In the Fair Pay Act, Congress reinstated the rule that each discriminatory paycheck is a new wrong. The Fair Pay Act doesn’t eliminate the “cap” on damages, so employers are immunized from liability for past discrimination, however. There’s still no federal Equal Rights Amendment guaranteeing non-discriminatory wages, and the arguments that doomed the ERA in the 1980s (same sex bathrooms, etc.) seem ridiculous now.
Until we unite to pass a stronger law, you have to protect yourself by making wise decisions. If you stay at home, have come in and out of the workplace, or interrupted your career for reasons of family-raising or elder-caring, whether single, married or civilly-united, your savings, pension or Social Security will be even smaller, so you must take advantage of every benefit there is. A lawyer and an accountant can help you research them.
For instance, federal law now defines full-time employment as working 1,000 hours, so you don’t have to worry as much about a “break in service” when retirement benefits are calculated. (A break occurs when an employee works fewer than 500 hours in a year, however. Now, up to 501 hours of child-rearing must be counted as service.) That provides some flexibility if you’ve started your own business or work from home. Think about these factors when you decide whether the kids’ braces, the new couch or your vacation will be paid for from your income, or from your spouse’s. Make sure you have an IRA, even if you don’t work. You should ask your significant other to contribute to your own IRA, too, especially if you don’t work.
Take advantage of free information on the Internet concerning financial security, including the websites of the League of Women Voters of New Jersey, AARP, Kiplinger’s and the US Government Accountability Office (GAO). Protect yourself and your financial security; and share this important information with your friends and family.
Janine G. Bauer, a partner at Szaferman, Lakind, Blumstein & Blader, P.C., of Lawrenceville, focuses primarily on environmental, transportation and infrastructure matters. She can be reached at email@example.com or by phone at 609-275-0400.