The last few months I’ve been struck by the number of women friends who have expressed profound fears of ending up on the streets as “bag ladies.” This is my own nightmare, despite my respectable net worth. We are women in our 50s and beyond, and we tend to be single or in rocky relationships. As Halloween nears, I can’t help but think of the silent community of women who fear they’ll end up in a permanent costume of despair and poverty. So today, I’m focusing on the social structure of our society that feeds into this nightmare.
There’s actually a term called “bag lady syndrome,” which is remarkably common among women in America. The data is astounding: in 2013, Allianz Life Insurance Company published results from a survey on Women, Money and Power. And here’s the headline:
49% of women fear ending up broke and homeless.Survey on Women, Money and Power
The fear of ending up as a bag lady is especially predominant among single women, divorced women, and same sex couples (55% to 57% fear being homeless). And it’s not just a theme among low-income earners – 27% of women with incomes over $200,000 worry about becoming a bag lady. Even well-known celebrities (Lily Tomlin, Gloria Steinem, Shirley MacLaine) admit their fear of ending up on the streets. It’s a widespread concern among women in American society.
Bag lady nightmares represent real fears and anxieties. I survived absolute poverty in my early 30s, so it’s easy for me to imagine how one disaster could lead to the loss of everything. Here’s what homelessness, especially at an older age, represents to me.
The thing is, if I could claim this nightmare as my very own, then it would be my personal issue. But I’m far from being alone. That fact that the majority of single and divorced women share this fear is proof that we are dealing with a social problem. And perhaps this problem is unique to our capitalistic paternalistic society? So let’s explore why these anxieties are so deeply ingrained in our culture. Here are four structural factors that contribute to our fears.
It’s not an even playing field for women. A recent gender pay gap study found that women earn 78 cents for every dollar earned by a man. While this is an improvement from the past, it means women have a median salary 22% lower than men. While the gap narrows when comparing salaries for similar jobs, too few women are represented at the top leadership levels of industry and government.
The Department of Labor tracks the most popular occupations by gender. The top three occupations for women are school teachers, registered nurses, and administrative assistants. Within each occupation, women earn less than men. In 2015, women school teachers earned 89% of men’s teacher salaries; women registered nurses earned 90% of male registered nurses’ salary; and women administrative assistants earned 87% of male administrative assistant earnings. Women earn less money than men, so the amount we can tuck into savings and retirement is less.
The pay gap study found that those who were unemployed at the time of receiving a job offer make 4% less than someone who did not have a recent career disruption. The longer a person is unemployed, the heftier the price – someone who has not worked in over a year experiences a 7.3% penalty. Women are more likely than men to leave the workforce to care for a child or another family member, and because those breaks often last longer than a year, women who return to the paid work face a hefty unemployment penalty.
Increasingly, family members are taking care of elderly parents and relatives – 65% of older persons with long-term care needs rely on family and friends. And two-thirds of those caregivers are women – the average caregiver is a 49 year-old woman who works outside the home and provides 20 hours per week of unpaid care to her mother. The dual demands of working outside the home and caring for family often results in women putting their own needs last. And it impacts women’s ability to work longer hours and save for retirement.
Divorce has a deep financial impact on women, especially as they age. About one in five women fall into poverty after divorce. And in a study of long-term impact, Couch found that divorced women who never remarried lost out on substantial Social Security benefits (about half of what a remarried woman earned). And here’s the scariest fact of all – 37% of all those in poverty in the United States are single, divorced, or separated elderly women – more than any other developed country. Yes, the bag lady nightmare is all too real for many women.
America’s health care system is broken – medical bills are the biggest cause of bankruptcies. Older women are doubly disadvantaged. Not only do they spend a lifetime earning less than men, but they can expect higher medical costs in retirement. The latest data show that women face 20% higher health care costs than men in retirement. Women tend to live longer and suffer from chronic conditions that require long-term care. Even those with health insurance or Medicare are skipping health care because of its costs – one in four people over the age of 60 went without needed health care due to its cost. The high costs of health care feed into bag lady syndrome.
Bag lady nightmares are a reflection of a society that has weak social safety nets. While I try to eschew politics, let’s be clear: attacks on the Affordable Care Act, Social Security, Medicaid, Medicare, and poverty programs are attacks on women. Tax cuts for the wealthy at the expense of social programs further weaken what little safety net exists. We need to reverse our priorities and level the playing field.
There is power in the knowledge that you are not alone. Your nightmare is shared by millions of women. And if it can help you earn more, save more, and learn more about finances, then perhaps your nightmare can fuel greater personal wealth and a new wave of forward-thinking leaders. Hope is not lost…yet!