Women’s Pensions and Poverty -
A European Issue
Jasna A. Petrovic – President of the Women’s Committee
of FERPA/European Federation of Retired and Elderly People
NPC Conference, London, 27 September 2008
1
TRUTH
Europe is one of the most wealthy regions
in the world. Nevertheless, recent Eurostat
data on income poverty highlight the fact
that wealth continues to be unevenly
distributed among the EU Member States
and – within those countries – among its
citizens.
2
The worning facts
• By 2050 the proportion of people aged
over 75 living at risk of poverty could
be 30% or more in all but a handful of
EU Member States, with older women
worse off than men.
3
Why are women poorer?
1. This applies particularly to women due to their
traditional lower representation within paid work
and to the fact that their opportunities to accumulate
full pension rights have often been much lower.
In the EU15, 10% of those working less than 30 hours a week are at risk
of in-work poverty, whereas the number declines to 5% for those
working longer than 30 hours a week. It is well-known that part-time work
is predominantly a characteristic feature of female employment: 36.2% of
women in the EU15 worked part time in 2005, compared with 7.7% of
men. It is later reflected in their pensions…
4
Why are women poorer?
2. This reflects societal gender roles and is
compounded by a lack of opportunities in both
training and education, contributing to lower
incomes in work and higher levels of poverty in
retirement amongst women.
Motherhood and other unpaid caring work
- breaks in employment
- gender pay gap
- part time hours
- occupational status
5
Cruel facts: differences
Difference in work patterns:
•
•
•
•
80% of part timers are female
60% of mothers work part time, vs. 4% of fathers.
More than ¼ of women aged 45-64 provide unpaid care for elderly or
disabled people.
Almost 1/3 of women reduce their labour market activity as a direct result
of caring.
Women are likely to live alone during retirement:
•
•
•
•
•
Over 40% of women aged 65+ are widows
More than 2/3 of women aged 80 or older are widows.
60% of women over 75 live alone.
High probability on reliance on survivor benefits.
Increased risk of dependence on means tested benefits
6
At highest risk?
At-risk-of-poverty rate after social transfers
65+
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Romania
Slovenia
9
21
6
16
8
26
19
20
Slovakia
Finland :
Sweden
UK
Turkey
Iceland
Norway
8
22
12
28
21 /2003/
10
18
7
It is about social model…
• 16% of EU citizens are at risk of poverty, say the latest
Eurostat figures, but only after social transfers /15% men, 17%
women /. Before social transfers there are 26% EU citizens at
risk /25% men, 27% women/.
• Half the countries that joined the EU in 2004 do a better job protecting their
• citizens from poverty than the average for the EU-15 /especially in Czech
Republic, Hungary and Slovenia/.
• In the majority of countries, the poverty risk is clearly higher for
elder women: in EU15 - 21% and in NMS10 - 10%!
Higher differentials: Sweden, Austria, Germany, Finland, Ireland; Latvia, Lithuania,
Estonia, Slovenia and Cyprus. Low differentials: Netherlands, Luxembourg, Denmark,
Portugal and Slovakia.
8
UK hidden poverty?
• One in five of the UK's population lives below the
poverty line - generally defined as living on an income
which is less than 60% of the national average.
• Of the 12.5 million people living in poverty, just under a
third were single, working-age people without children,
29% were children, 22% were adults with children among them 900,000 single parents - and 18% were
pensioners.
• The report, Poverty in the 21st Century, concluded the
nature of poverty was becoming more complex with
extremely poor people now more likely to be female
and either divorced, widowed or separated.
9
But…
In UK:
The proportion of pensioners living in low
income households has been falling
throughout the last decade, from 29% of all
pensioners in 1996/97 to 17% in 2005/06.
Congratulations!
Still: Single female pensioners and older
pensioner couples are the most likely to be
in low income.
10
Worning!
Some figures for thought
• The UK has a higher proportion of its
population in relative low income than most
other EU countries: of the 27 EU countries,
only 5 have a higher rate than the UK (Latvia,
Greece, Spain, Lithuania, Italy)
• The proportion of people living in relative low
income in the UK is twice that of the
Netherlands, and one-and-half times that of both
France and Germany.
• Mothers’ employment rate is 29% less. Mothers’
full time employment rate is 60% less.
11
UK /and many other countries’
Sad Side Story
The poor remain unseen because many
come from backgrounds where we
don't often expect poverty to exist and
don't come forward to ask for help.
The complexity of the means-tested pensions support is
such that people are not claiming what they are owed.
It has been estimated that only around 2.7
million of the 4 million pensioner households who are
eligible for these easy-to-understand benefits actually
bother to claim them.
12
Older - poorer!
• In all countries women aged 75+
had a notably higher poverty risk.
• One out of every three women aged 75+
had experienced a poverty risk in Austria,
Finland, Belgium, UK, Greece, Portugal
and Ireland.
• Germany and Italy had little or no poverty
differential for women in two age groups.
13
Legal minimum pension
1600
1400
1200
1000
800
600
400
200
UK
Ita
Lu
ly
xe
m
bu
Ne
rg
th
er
la
nd
s
Po
la
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*
Po
rtu
ga
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ai
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Au
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*
Be
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Cr
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us
Fr
an
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G
er
m
an
y*
G
re
ec
e*
Hu
ng
ar
y
Ire
lan
d
0
*source SPC Special Pension Study, minimum income provision for older people and their
contribution to adequacy in retirement, December 2006, EC Social protection website
14
s
Be tria
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et
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U
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Au
Average wages
4500
4000
3500
3000
2500
2000
* Source EUROSTAT, gross data
** Gross data
m
f
gen
1500
1000
500
0
15
* Gross
**Net
Ita
Lu
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B
Average pensions
2000
1800
1600
1400
1200
1000
800
600
400
200
0
m
f
gen
16
65+living below the poverty line
 BELGIUM: 24% of retired 65+ women live in poverty
 AUSTRIA: 230 000 65+ people
 SPAIN:149 000 men, 1 697 000 women
 CROATIA: 40% of the population living in poverty risk
zone (10% bellow poverty line), as earning less than
260 Euro
 HUNGARY: 50% of the retired people, as receiving
less than 244 Euro per month
 IRELAND: 27.1% of the retired people, 3.3% in
constant state of poverty
 UK: forecast by 2050: 50% of future pensioners may
receive incomes below the official poverty level
 ITALY: 5 million at risk of poverty, of which 3 million
women
17
Retired 65+ people
at risk of poverty
70
60
50
m
40
f
30
gen
20
10
0
l
y
*
s
y
y
rt ia ium atia rus nce an ece gar land Ital urg nd nd uga ain
s lg ro
b rla
p
la rt
yp ra rm re un Ire
u
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m
o
e
o
A B
C
F
e
e t he P
C
G H
P
x
G
Lu N e
U
K
18
Percentage of 65+ retired persons at risk of poverty. Data Integration 2007 EC, EUROSTAT
Key findings
1.Labour market conditions and the final outcomes of pensions
systems are clearly related.
2.Especially in the case of women’s poverty, the issue of ‘care credits’
(recognition of periods of time out of paid work for caring
responsibilities – such as looking after children or elderly
relatives) is becoming increasingly important.
3.The wage gap between genders is something that should be looked
at, as is gender segregation of the labour market.
4.There appears to be a trend towards providing less generous basic
pensions, but covering a higher percentage of the population.
19
What is “guilty”
WAGE GAP leads to PENSION GAP
• The main factor behind the current
pension gender gap is the lower
remuneration of female workers, due to
widespread sectoral and occupational
segregation. Women’s average insurable
income is 85% of men’s and about 89% of
the national average.
20
Food for thought
• Retirement age and length of pension contributions gradual increase in retirement age reached 63 years
for men in 2006 and will reach 60 years for women in
2009 – to be challenged!
• Pension formula – pension reforms widen gender
pension gap – to be challenged!
• Gender wage gap – part-time working, career
patterns and discriminating types of occupation and
employment – to be challenged!
• Women represent in the EU 59% of all tertiary
graduates but they still do not reach the best
positions in the economy for several reasons!
• Work/life issues: women still take the burden on
private and family responsibilities. – to be challenged!
21
Remember. Act.
1 October - International Day of Older
Persons
What you are going to do?
17 October – International Day for the
Eradication of Poverty
What you are going to do?
22
THANK YOU!
23
REPRESENTATION OF WOMEN
IN FERPA AFFILIATES
PYRAMID OF DISCRIMINATION
•
•
Out of 10 surveyed organisations from 8
countries, 8 of them have a women's
structure and responsible person. As
majority of the organosations did not reply,
it is possible that majority of these
organisations have no women's structure
and lack of gender sensitivity.
On average women make 46% of the FERPA
membership.
24
REPRESENTATION OF WOMEN
IN FERPA AFFILIATES
•
•
Pyramidal phenomenon is visible: women
make almost half in the membership, but only
28% in the „parliament-like“ highest body and
only 22% in the „government-like“ decision
making body.
Average representation level indeks for the
surveyed organistions - which could be
considered gender-sensitive /as they have
replied to the questionnaire/ - is only 54, which
means that out of each ten seats for women,
male colleagues take almost five, plus their ten
seats.
25
REPRESENTATION RANKING
1
2
3
4
5
6
7
8
FNVNetherlands
SPI/CGILItaly
SUH/UATUCCroatia88
FGTBBelgium
UILP/UILItaly
NPCUK
CFDTFrance
FNP/CISLItaly
107
88
63
36
36
35
25
26
Resolution:
Pension gap and poverty
The FERPA Women’s Committee meeting on
11 July 2008 in Brussels adopted the following
resolution:
• Older people are often at higher risk of
poverty than their younger counterparts. applies
particularly to women; their opportunities to
accrue full pension rights have often been much
lower because of their traditional lower
representation within paid work.
27
• Pension systems alone cannot be expected to solve
the problems of elderly poverty if the origins of the
problems are within the labour market itself. Given the
issues of gender segregation and part-time working in
the labour markets of various countries, a high
employment rate will not per se resolve the problems
related to pensions and poverty in old age.
• There is large difference between men and women’s
working patterns: While the number of women
completing higher education now exceeds men in EU
Member States, their employment rate remains 15
percentage points lower than men’s and they continue to
face an average pay gap of 15%. At the same time, the
unemployment rate for women is still higher than the
male rate, and long-term unemployment is still much
more common among women than men.
28
• Women are also more likely to work part-time: 32% of
the female labour force is part-time, compared with only
7% of men, and governments have not yet come to
terms with validating this and other atypical forms of
working through pension entitlements. 60% of mothers
work part-time versus 4% of fathers; more than onequarter of women aged 45-64 provide unpaid care for
elderly or disabled people.
• Almost one third of women reduce their labour market
activity as a direct result of caring. Women are likely to
live alone during retirement: over 40% of women aged
65+ are widows; more than two-thirds of women aged 80
or older are widows; 60% of women over 75 live alone.
All these parameters reflect on the poverty risk of women.
29
The FERPA Women’s Committee therefore calls on the
ETUC (European Trade Union Confederation) to
make serious efforts to demand that the EU
institutions strengthen the role of the EU in reducing
poverty, especially of older women, across the
continent.
Preventing older people from slipping into poverty and
social exclusion and providing adequate welfare for them
is becoming a growing concern for the European Union.
Some Member States have recognised this and have
introduced a number of reforms to strengthen their
minimum pension systems by increasing their financing
or by introducing or improving benefits. The ETUC
should strengthen its policy on older and retired
workers.
Women’s poverty and social exclusion in Europe
requires specific, multiple and gendered policy
responses.
30
The FERPA Women’s Committee calls on the ETUC to
make a stronger effort to develop a new trade union
response to tackling poverty among older women, based
on the following objectives:
1. Greater employment during working lives
2. Better indexation of pensions in payment
and also adequate survivors’ benefits
3. Strengthening of social safety nets
4. Better pension crediting for genuine
absences from the labour market
5. Altering of social insurance rules and
qualifying conditions to benefit women
6. Fixing a minimum living pension for all
older women.
31
The FERPA Women’s Committee calls on all its and
the ETUC affiliates to alert their governments to the
risk of poverty among older women and to undertake
a study on the impact of pension reforms on
women’s lives in their countries, bearing in mind that
the individualisation of pension rights (and social
security and taxation systems overall) should
encourage women and men to engage in paid work,
and thus earn individual economic security; and that
mechanisms should be developed which
accommodate the employment patterns linked to
society's need for the care of children and other
dependant persons so that career-breaks or parttime work are considered as full-time work in the
calculation of pension benefits.
32
CONCLUSIONS
1. The best policy instruments for tackling older
women’s vulnerability to poverty are active labour
market policies for women, aimed at improving their
employment, reducing gender pay gaps through the
introduction of equal pay and also supporting their
working careers.
2. For those women in employment, access to a decent
occupational pension scheme must also be on an
equal basis. However, those in part-time, low-paid
employment or working at home often have no
access to any occupational pension. Private savings
schemes offer no guarantee or financial security.
This can best be provided by the state.
33
CONCLUSIONS
3. Active labour market policies for women should be
accompanied by an improvement in the universality
of pension rights (e.g., by offering flat-rate
residence-based minimum pensions for all women,
which are set above the official poverty level).
4. Poverty risks for older women should be specifically
targeted, by providing more adequate survivors’
benefits for all widows, and by improving indexation
of state pensions and minimum pensions.
5. More research shouldd be undertaken to study the
impact of generous childcare credits and of
minimum income guarantees on women‘s labour
market participation.
34