TRending Financial Topics
This is Why Helping Women in the Sandwich Generation is Good for the U.S. Economy
When my mother said those three words, it catapulted me into the “sandwich generation,” a term used to describe middle-aged adults who care for both elderly parents and children.
I knew what I was expected to do when I received the news of my mother’s cancer. The narrative says that I, a woman, should take off work to care for an elderly parent. But I’m a CEO and the breadwinner of my family. When I got that call from my mom, my company was in the middle of a capital raise. There was no “taking off” work.
I’m not the only woman caught between the work front and the home front. In the U.S., 71% of families rely on mom’s earnings for their economic well-being, and 40% of families have a breadwinner mom. The belief that women can simply step away from their jobs to take on caregiving responsibilities assumes that most women can afford to take off work in the first place.
And now, as the number of individuals in their forties and fifties who support at least one child and parent over the age of 65 is increasing, the burden for women in the sandwich generation is becoming heavier. A collision of demographic changes, labor force participation, and gender inequity has fueled this situation that has, in effect, brewed a perfect storm for middle-aged women and our economy.
We have an increasing elderly population on one end of the spectrum and a generation of children on the other. Sandwiched in the middle are the 40-to-59-year-old Americans who are responsible for both their parents’ and their children’s well-being. This middle cohort is growing. Nearly half (47%) of adults ages 40 to 59 care for an elderly parent while supporting a child—and there’s no slowing down. Between 2016 and 2060, we expect the number of Americans ages 65 and older to increase by 92%, or by 46 million people—nearly equivalent to the entire population of Spain.
Who provides care to this growing elderly population? According to the AARP Public Policy Institute, family members are “the single largest source” of support. That care falls into three categories: financial support, domestic support, and emotional support.
Raising children while looking after aging parents weighs on the pocketbooks of adults in the sandwich generation. A full 74% of dual caregivers agree with the statement, “Caring for my parent/relative causes financial strain.” Approximately 30% of dual caregivers spend at least $3,000 each month caring for an aging family member. Another 34% spend between $1,000 and $2,999 each month and 35% spend less than $1,000. Moreover, the average family caregiver shells out $6,954 annually to cover out-of-pocket caregiver expenses such as home modifications or gas to visit long-distance parents.
Dual caregivers employ various methods to afford these expenses: 72% reduce spending on non-essentials, 53% move closer to their aging parents, and 62% delay major life decisions such as getting married.
Even if elderly parents do not depend financially on their children, they still might depend on them to manage the bills. MassMutual’s State of the American Family report found that 49% of adults are responsible for managing their parents’ finances. This type of support falls into the second category of care: the everyday domestic duties.
Middle-aged adults must also attend to their parents’ day-to-day responsibilities such as washing laundry, shopping for groceries, or providing transportation to healthcare appointments. In fact, 30% of adults with one or more parents over the age of 65 say their parents cannot handle these daily affairs and activities alone.
In addition to financial and domestic care, 38% of the sandwich generation have both elderly parents and children who rely on them for emotional support. Because of our fundamental human need for emotional support, this type of care is by no means insignificant. Dual caregivers must ensure their family members receive quality attention, connection, and psychological security.
Attending to the financial, domestic, and emotional needs of parents and children places dual caregivers under an immense amount of stress. Between work and home responsibilities, these individuals are burning both ends of the stick. And for women, the ends of the stick are burning faster than ever.
Women in the sandwich generation are disproportionately burdened by the financial, domestic, and emotional dependencies of their family members. To explain why that is, we need to apply the gender lens to three contributing factors: pay equity, unpaid labor, and labor force participation.
The gender pay gap renders women less able to financially provide for aging parents and children. Women, in aggregate, earn 80 cents for every dollar men earn. That 20-cent pay gap accumulates to $406,760 in lost wages over the course of a woman’s 40-year career. Women of color stand to lose even more. Black women lose $946,120 in lifetime wages, Native American women lose $977,720, and Latinas lose $1.1 million compared to white, non-Hispanic men. The gender pay gap also makes women more likely to need help as elderly adults because they have less economic security in retirement. In fact, regardless of race, educational background, and marital status, elderly women are twice as likely to be poor than elderly men.
Second, the bulk of household labor still falls on women’s shoulders. On average, women perform 241 minutes of unpaid work each day compared to 145 minutes for men. This second shift of unpaid labor might include washing dishes, cooking dinner, and, yes, caring for family members. Women are not only more likely to be caregivers (55% of women versus 45% of men), they are also more likely than men to take on the majority—more than 21 hours per week—of caregiving duties.
Third, time spent on unpaid domestic labor limits women’s economic potential. Fifty-four percent of female family caregivers work full time outside of the home and 40% of U.S. households with children are supported by breadwinner moms. As today’s sandwich generation demonstrates, the dependence on female labor both at home and at work is bringing our economy to a tipping point. We cannot afford for women to continue shouldering the caretaker burden.
We cannot disregard the economic costs associated with the rising demand for family caregivers. Americans miss out on $28.9 billion in wages every year to care for family members. Over a lifetime, women lose approximately $274,044 in wages and Social Security benefits as a direct result of leaving the labor force to take on more caregiving duties. Men lose approximately $233,716 in lifetime wages. And think, those dollars are lost wages only. They don’t take into account the monetary value of dual caregivers’ unpaid labor, which was estimated to cost $470 billion in 2013. That’s less than what the U.S. spent on Medicaid during the same year.
A Labor Department analysis found that if American women in their prime working years participated in the 2015 labor force at rates equal to their counterparts in countries with more generous family care policies, we could increase GDP by 3.5%. Today, with more women in the labor force holding bachelor’s degrees or higher than men, 29.5 million versus 29.3 million, respectively, perhaps borrowing the policies of countries such as Canada and Germany isn’t a bad idea.
In 2019, 7.6 million jobs went unfilled, according to the Bureau of Labor Statistics. Freeing women from the growing pressures on the home front would alleviate this workforce shortage and benefit our economy. Achieving gender equity in labor force participation would strengthen the U.S. economy by $798 billion.
We don’t have to weather this perfect storm of labor economics, demographics, and gender inequity. We can use data to inform our plans for a better future—starting with paid caregiver leave.
As it stands, only 13% of private-sector workers have access to employer-provided paid family leave. For the workers whose companies offer paid leave, most remain exclusive to new parents. Caring for ill family members doesn’t count.
The dearth of caregiver leave policies seems incompatible with the related economic data. For instance, access to paid caregiver leave reduces employee churn, helps workers stay in jobs that are a good match, improves employee productivity and satisfaction, and boosts labor force participation. So how can elected officials and business leaders create equitable caregiver leave policies? Here are a few requirements to get started:
Middle-aged women are burning both ends of the stick. Their children, their parents, our economy, and our country can’t wait another generation to douse the flame. Let’s show up for the women in the sandwich generation and in doing so, achieve equity for all.
The contents in this article are being provided for educational and informational purposes only. The information and comments are not the views or opinions of Union Bank, its subsidiaries or affiliates.