SOURCE: iStockphoto

A father plays with his son.

As we celebrate Father’s Day on Sunday, it is worthwhile to reflect on the importance of fathers who too often go unrecognized in family and social policy: low-income fathers of color, who are frequently dogged by negative stereotypes.

More than two-thirds of Latino fathers reside in the same household with their children, cohabitating at rates on par with the national average of 68.6 percent. Although black men are the demographic group least likely to live with their children, noncustodial black fathers participate in their children’s upbringing at rates nearly double that of noncustodial white and Latino fathers, and their children are more likely to report positive contact and relationships with their fathers.

Improvements in a father’s economic security better prepare him to provide financial support to his children, who need to be lifted and kept out of poverty. Leaders from across the country, including President Barack Obama, are supporting efforts such as the Center for Urban Families, or CUF, in Baltimore, Maryland, which offers low-income fathers parenting and workforce-development services. These valuable community assets are providing ladders of opportunity, generating significant progress in helping low-income fathers improve their economic standing, and shifting the narrative on fathers of color.

More policy attention, however, must be paid to their needs and those of all low-income fathers. In terms of employment, health, housing stability, incarceration, and mental health, low-income fathers fall far behind other fathers, as the data presented below demonstrate.

Employment

• 13.7 percent: the nationwide unemployment rate for black men, compared to 8.6 percent for Latino men and 6.6 percent for white men in April 2013
• 4 million: the number of private-sector jobs lost between 2006 and 2012 for workers with only a high school diploma, an educational-attainment level in which Latino and black men disproportionately fall

Despite steady declines in the overall unemployment rate, disproportionate joblessness persists in low-income communities and communities of color. To avoid the long-term consequences of disparate economic distress, investments in jobs, as well as education and training, are critical supports for communities currently being left behind in the recovery. Assistance and services that improve work opportunities for disconnected men also support the well-being of children, women, and families.

President Obama’s proposed Pathways Back to Work Fund includes $8 billion for subsidized employment, as well as $2 billion to provide job training for low-income people and the long-term unemployed. CAP’s recently released report, titled “It’s Time to Hit the Reset Button on the Fiscal Debate,” includes this fund as a critical approach to faster long-term growth.

Health

• 53 percent: the percentage of men among the 15.1 million adults lacking health insurance who could gain coverage under Medicaid if all states expand eligibility
• 7 million: the approximate number of people without health insurance who qualify for the Supplemental Nutrition Assistance Program, or SNAP, but are not enrolled
• 40 percent: the rate of African American men who die prematurely, compared to 37 percent of Latino men and 21 percent of white men

The Patient Protection and Affordable Care Act, or ACA, will significantly improve access to health care coverage for millions of low-income men. Even when black and Latino men have coverage, however, they are less likely to receive consistent quality care and preventive services.

Sick fathers or fathers who die prematurely are unable to provide for their families. Low-income men of color could benefit from greater community-based outreach to boost enrollment and eliminate barriers to treatment. The ACA’s Prevention and Public Health Fund, if fully implemented, will reduce health care costs through improved detection and management of chronic conditions and the promotion of wellness in underserved communities.

Housing stability

• 8.48 million: the number of low-income renters spending 50 percent or more of their household income on housing in 2011
• 104 hours: the number of weekly hours a minimum-wage worker must earn to rent a two-bedroom apartment in 2013
• $18.79: The minimum hourly wage one must earn in order to afford the average cost of rent in the United States
• 60 percent: the proportion of the largely male sheltered-homeless population that is a racial minority, a population that is composed mostly of African Americans (38.1 percent) and Latinos (16.4 percent)

Because men of color face high levels of homelessness, unemployment, underemployment, and wage gaps, housing affordability is critically important. Housing instability negatively impacts health outcomes, recidivism, employment opportunities, and family stability, as well as the ability of fathers to be present in their children’s lives. “Making the Mortgage Market Work for America’s Families,” a recent joint report by CAP and the National Council of La Raza, outlines opportunities to improve housing affordability, including investments in the construction and preservation of affordable rental units and the launch of a Market Access Fund to provide targeted lending to communities of color and low-income people.

 Incarceration

• One in nine: the number of black children who have an incarcerated parent, compared to 1 in 28 Latino children, and 1 in 57 white children
• 54 percent: the number of incarcerated fathers who were primary providers for their families
• 21 percent: how much slower wages grow for formerly incarcerated black men, compared to their white counterparts

Given persistent incarceration disparities and the deep effect it has on communities of color, more should be done to support alternatives to incarceration and to improve community re-entry services. The removal of fathers and the wage gap they encounter upon return affects entire families. Due to workplace discrimination, returning fathers often face limits to their ability to support their children. Often in order to make ends meet, fathers will repeat the very crimes that led to their initial incarceration.

Social impact bonds provide a source of funding to support programs that lower recidivism through family planning, drug treatment, employment, and mentoring services. President Obama’s fiscal year 2014 budget includes a request for $500 million to support this innovative funding approach.

Mental health

• 4.1 times: the rate at which Latino men face post-traumatic stress disorder when compared to white men, while black men face rates 2.5 times greater than white men
• 1 in 10: the number of men of color who will face major depression, and the number of depressed men who will receive adequate care for their condition

Most Americans with a mental illness remain untreated or receive poor treatment, and this is especially true for men of color, who are less likely to be connected to mental-health services. One significant but particularly overlooked cause of mental illness in men is sexual violence, including rape. Male victims suffer from similar mental-health disorders as women who are sexual assault victims, but men are far less likely to disclose the assault. Consequently, it is highly likely that they must cope with the psychological impact on their own.

Untreated mental illness in fathers means the whole family is likely to suffer, as fathers are severely incapacitated in their ability to parent when dealing with mental trauma. The president’s requested $235 million provides critical resources to improve mental-health detection and train and expand the mental-health workforce.

Conclusion

Fathers of color need increased access to vital wraparound services. Programs such as the Center for Urban Families in Baltimore are critical to addressing the challenges mentioned above and should be supported on a much greater scale. Additionally, to ensure progress for our nation’s fathers of color, policymakers and program directors must eliminate systemic barriers that actively prevent fathers from supporting their families.

A number of proposed policies offer significant opportunities to improve the circumstances of fathers of color and low-income fathers. This Father’s Day, our leaders should seize the opportunity to move beyond the stereotypes and protect and strengthen economically vulnerable fathers, their children, and their families.

Zach Murray is a Bill Emerson National Hunger Fellow with the Poverty and Prosperity program and Progress 2050 project at the Center for American Progress.

SOURCE: AP/Jim Cole

In this April 4, 2012, file photo, Scott Richards of Saint Anselm College looks over possible jobs during a career fair for college students in Manchester, New Hampshire.

Endnotes and citations are available in the PDF version of this issue brief.

Young Americans today are confronted by an unemployment crisis unlike any we have seen in recent times. To say that these Americans are having a difficult time entering today’s labor market is an understatement. As recent reports have documented, the unemployment crisis facing young Americans takes many forms, including high school students who are having a harder time finding afterschool jobs, twenty-somethings who are increasingly stuck in unpaid internships instead of paying jobs, and college graduates who are settling for low-wage, low-skill jobs such as waiting tables or serving coffee.

While each of these is evidence of the troubles facing young workers, none lays out the full scope of the nation’s youth-unemployment crisis. The reality is that youth unemployment is a much bigger problem than lawmakers have acknowledged. According to our analysis, there are more than 10 million Americans under the age of 25 who are currently unable to find full-time work—a number greater than the population of New York City, a city of about 8 million people.

As we have written before, America’s youth-unemployment crisis will have serious, enduring costs for individuals, society, businesses, and all levels of government. At 16.2 percent, the unemployment rate among Americans ages 16 to 24 is more than twice the unemployment rate for people of all ages. These young people are facing significantly higher rates of unemployment than any other age group, as Figure 1 below shows.

Some of the negative impacts of high youth unemployment are already clear: Young people are increasingly failing to make payments on their student loans, delaying saving for retirement, and moving back home with their parents. Other consequences will be felt long into the future. According to our analysis, a young person who experiences a six-month period of unemployment can expect to miss out on at least $45,000 in wages—about $23,000 for the period of unemployment and an additional $22,000 in lagging wages over the next decade due to their time spent unemployed.

Businesses will consequently suffer from reduced consumer demand, and taxpayers will feel the impact in the form of lost revenues, greater demand for more government-provided services such as health care, increased crime, and more welfare payments. There is no question that lawmakers must enact broad job-creation measures to reduce overall unemployment and get our economy back on track. But because youth unemployment is disproportionately high and its consequences especially long lasting, any such measures should emphasize getting young people back to work.

In order for lawmakers to craft policies to do so, it is important to understand the different categories of young people that make up America’s unemployed youth. A high school student in need of a part-time job is in a very different position than a college graduate stuck in an unpaid internship, and this variation in circumstances will likely require different policy approaches to get both young Americans back to work.

In this brief we analyze data from the U.S. Bureau of Labor Statistics’ Current Population Survey and find that there are 10.6 million Americans under the age of 25 who are not fully employed—more people than live in the most-populated city in the country. Specifically, this brief will explore the two groups of people who make up America’s young unemployed demographic:

• 2.5 million teens ages 16 to 19 who are either out of work or underemployed
• 8.2 million young adults ages 20 to 24 who are either out of work or underemployed

Finally, this brief will explore the challenges facing young college graduates, who are experiencing high unemployment, low-quality jobs, and declining wages.

2.5 million teens are out of work or underemployed

There are 2.5 million Americans ages 16 to 19 who are out of work or underemployed. This group includes teens who are employed part time when they would rather be working full time, teens who are enrolled in school while actively seeking employment, and teens who are neither working nor enrolled in school. (see Figure 2)

Of these 2.5 million teenagers, nearly 300,000 are employed part time but are seeking full-time work. This means that they want a full-time job, but are not working full time because their employer cut back their hours or they could only find part-time work. This group is not included in the official unemployment rate, but because they are not working to the full extent that they desire, it is also an indicator of just how difficult the labor market is for teens today.

Another 728,000 teenagers are enrolled in school but are unemployed and actively seeking employment. Members of this group could include a 16-year-old high school student looking for an afterschool job at the mall, or a 19-year-old single mother who needs a full-time job during the day while attending community college at night. Unemployment is clearly a problem for the latter because she would need to provide for her family while also bolstering her education credentials, but it is also a problem for the former because afterschool jobs can play an important role in teens’ development. More than just providing teens with spending money, afterschool jobs can also help teens develop soft skills such as interacting with co-workers and time management, along with helping them explore career options.

Finally, 1.4 million teens encompass a group that social scientists sometimes refer to as “disconnected,” which means they are neither enrolled in school nor working. This group is particularly worrisome because these teens are not accumulating human capital in the form of either education or work experience, the loss of which will hinder their employment opportunities, social mobility, and income in the future. Without school or work, research has demonstrated that teens are more likely to become involved in crime and to rely on public assistance and government health care.

About half of disconnected teens have dropped out of high school without making the transition to a job. Another half have completed high school but have not been able to translate their education into work or further schooling. These facts suggest that addressing unemployment among teens may require efforts to keep teens in school, as well as measures to improve the transition from high school to employment and training.

Most of America’s disconnected teens are white, but black and Latino youth are overrepresented compared to their share of the youth population. Black teens, for example, make up 15 percent of the total population of Americans ages 16 to 19, but are 20 percent of disconnected teens. The fact that young black and Latino Americans are disproportionately affected by unemployment is also reflected in the higher unemployment rates for those groups: Black and Latino teens are unemployed at rates of 36 percent and 28 percent, respectively, while white teens are unemployed at a rate of 21 percent.

8.2 million workers ages 20 to 24 are out of work or underemployed

There are 8.2 million young adults ages 20 to 24 who can’t find full-time employment, including 4.1 million who are disconnected from both work and school and another 3.6 million who are working part time when they want to work full time.

As with teens ages 16 to 19, the largest group of unemployed young adults are disconnected. This includes both those young adults who are unemployed and searching for a job, as well as those who have dropped out of the labor force, many of whom have given up their employment search even though they want a job. Again, these are 4 million young adults who are not engaged in any sort of activity to develop their human capital; they are not gaining education in school, nor are they learning skills or getting experience through work. Failure to build these skills as a young adult is likely to seriously hinder their ability to join America’s middle class in the future and contribute to the economy as productive workers and taxpayers.

The majority of these disconnected young adults do not have a college education. Nearly 1 million have not graduated from high school, while 1.9 million have a high school diploma. Another 790,000 have dropped out of college without gaining a degree, which places these young adults in a perilous financial situation if they took out student loans to pay for their education—researchers have found that borrowers who drop out of college are four times more likely than graduates to default on their student loans.

As with disconnected teens, disconnected young adults are primarily white, with black and Latino youth overrepresented relative to their shares of the youth population. Black youth make up 16 percent of Americans ages 20 to 24, but they are 23 percent of disconnected young adults. And Latino youth make up 21 percent of Americans age 20 to 24, but they are also 23 percent of disconnected young adults.

College graduates are underemployed and in debt

A college degree has long been viewed as the ticket to a good job and social mobility, but many recent college graduates are finding that their investments in education are not paying off. It is true that young people with a bachelor’s degree are more likely to find a job than their less-educated peers, but recent graduates today suffer from high unemployment rates, declining wages, lower-quality jobs, and few opportunities for advancement. At the same time, student debt in America has ballooned to more than $1 trillion, and one in four student-loan borrowers is delinquent on their loans.

In addition, unemployment rates among college graduates under the age of 30 are high relative to older college graduates. The unemployment rate for the youngest college graduates is 7.4 percent—twice the unemployment rate for college graduates in their 30s and early 40s, who experience an unemployment rate of 3.4 percent.

Moreover, the quality of the jobs available to recent college graduates today is much lower than in the past. In a new analysis, the Economic Policy Institute found that real wages for young college graduates have declined by 8.5 percent since 2000, and the share of young college graduates receiving employer-provided health insurance or pensions has also dropped in recent years.

Underemployment remains a persistent challenge for young college graduates today, as many are working jobs that don’t require a college degree. A study by the Center for College Affordability and Productivity found that half of all college graduates are working a job that the Bureau of Labor Statistics suggests requires less than a four-year degree such as retail salespeople, cashiers, and restaurant servers. More than one in three are working a job that requires no more than a high school diploma, including taxi drivers and parking-lot attendants. And the authors of the study suggest that younger college graduates are more likely than older college graduates to be working a job that doesn’t require a college degree.

We have not estimated exactly how many of today’s recent college graduates are underemployed given their level of education. But it is clear that even after a young American walks across a stage to collect a diploma, he or she will not be spared the impacts of the dismal job market. And even as he or she struggles to find full-time work commensurate with that college degree, he or she faces an average student-debt burden of more than $25,000. This combination of underemployment and college debt is a dangerous one—it puts young graduates at risk of poor credit ratings, wage garnishment, and failing to save adequately for retirement. It also forces the government to spend money recovering defaulted loans, and the resulting reduced consumer demand due to lower wages and less income to spend throughout the economy can severely hold back economic recovery.

Conclusion

Four years after the official end of the Great Recession, the pace of job creation remains too slow, and too many Americans are out of work. The slow economic recovery has hit America’s youngest workers especially hard, and while the unemployment rate has fallen from its peak, more than 10 million young people under the age of 25 are not fully employed.

This brief provides policymakers with a detailed understanding of just who these young Americans are so that they can begin to develop and enact smart, targeted policy interventions to put these young Americans back to work and address the youth-unemployment crisis head on. We have long argued that policymakers must do more to create jobs and hasten the pace of our economic recovery. Our country needs broad-based job-creation measures, but targeted policies to address youth unemployment are especially crucial. Due to the severity and long-term economic costs—$20 billion in lost wages alone—of high youth unemployment, the United States can ill afford to let an entire generation of young people lose out on the earnings, wealth building, experience, and skills development that come from working.

Sarah Ayres is a Policy Analyst in the Economic Policy department at the Center for American Progress.

SOURCE: AP/Kevin Frayer

Indian laborers work at a construction site near the Noida Extension on the outskirts of New Delhi, India, September 26, 2011.

“Working Toward Shared Prosperity Through Just Jobs”—a conference organized by the Just Jobs Network and co-hosted by the Norwegian Embassy in New Delhi, India, Friedrich Ebert Stiftung, and SAATH—focused on one of the most pressing challenges of our time: how to create good jobs to drive employment-based, inclusive, and sustainable economic growth. This conference, held on April 20 to 21, 2013, was an important step toward building dialogue among a global cohort of high-level policymakers, academics, grassroots practitioners, and private-sector and workers’ representatives.

The two days of discussions culminated in the six conclusions outlined in this column. In the coming months the Just Jobs Network will work with partners across the globe to conduct research and advocacy around these themes to capitalize on the momentum that this conference generated.

Employment-based economic growth strategies

Policymakers, academics, and practitioners must reconsider the prevailing attitude that economic growth will automatically lead to job creation. It may not be possible to create jobs without economic growth, but it is possible to have economic growth without creating enough new jobs or improving working conditions. “Jobless growth” in many countries, even in the years preceding the Great Recession, widened the chasm between the rich and the poor that ignited the political and social upheaval extending from the Arab Spring to the wave of Occupy Wall Street protests.

India is one nation experiencing jobless growth. Dr. Santosh Mehrotra, director general of the Institute of Applied Manpower Research, shared data in the first hour of the conference that sparked a national discussion in India over the following days. From 2000 to 2005, he said, India’s economy added 60 million jobs. But from 2005 to 2010, the economy only added 2 million jobs despite high levels of gross domestic product, or GDP, growth that averaged more than 8 percent per year, nearly 2 percentage points higher than during the first half of the decade.

Countries around the world must emphasize employment-based growth that provides more people with the opportunity, incentive, and ability to create better lives for themselves and their families. Creating more and better employment will, in turn, stimulate inclusive, stable, and sustainable economic growth.

The value disconnect

As more countries integrate into the global economy and competition intensifies, countries are tempted to exploit low production costs in pursuit of higher profits and growth. In many cases, workers toil for long hours in factories but see little more than subsistence wages, even when there is rising productivity.
Poor working conditions, discrimination, and exploitation, for instance, frequently mark the new jobs that accompany more open trade. These precarious jobs saddle workers with poorly defined employment contracts—if there is any contract at all—and a high level of insecurity.

A Just Jobs Network and Worker Rights Consortium study previewed at the conference, “Global Wage Trends for Apparel Workers, 2001–2011,”[1] discusses the prevalence of declining real wages and persistent poverty for garment workers in a majority of the world’s leading apparel-exporting countries. These poor conditions cast doubt that export-led development strategies that start with lower-value-added manufacturing necessarily create a rising tide that lifts all boats in countries pursuing these strategies. Poor-quality jobs and bad working conditions erode worker productivity, which ultimately also reduces business profits.

The study notes that garment workers in many of the leading apparel-exporting countries earn little more than subsistence wages for their long hours of labor. And in many of these countries, the buying power of these wages is going down, not up: The average pay for garment workers in apparel-exporting countries is just 36.8 percent of a living wage.[2]

There is an urgent need for policies and programs that will ensure that more people can benefit from an expanding economic pie. Protections for workers, ranging from the implementation of existing labor, health, and safety regulations to ensuring that workers are appropriately compensated for their work and production, are essential to rectifying the current imbalance.

At the same time, measures to foster increased job creation through incentives for the private sector must be complemented with investments in education, skills training, and job-search assistance, especially for youth. But this isn’t a task for government alone. The private sector must also do its share to help create jobs and equip workers with the skills and protections they need to be productive.

Responsible capitalism and corporate social responsibility

Corporations must take on the idea of responsible and sustainable capitalism—the alternative is a world with depleted natural resources, where workers lack both the skills for a 21st century economy and the purchasing power to create new sources of demand.

Adopting socially responsible practices where corporations invest in training workers, ensure appropriate remuneration to boost purchasing power, and therefore create new markets will drive more business opportunity and create more dynamic economies.

Companies must mainstream corporate social responsibility, or CSR, strategies throughout their operations, and they must work with the public sector and civil society to this end. Mainstreaming CSR means embedding values and foresight into every business decision. It means thinking and planning for the long run. It leads to considering positive and negative externalities from actions in the present that will affect profits and strategies in the future. It is about “making the business case” for moral and sustainable practices.

Fostering more and better employment opportunities and more equitable outcomes in trade

The multilateral trading regime will have to reinvent itself to keep pace with changes in the global economy. As a new leader, Roberto Azevedo, prepares to take the helm of the World Trade Organization in September, this will hopefully prompt a fresh look at the multilateral trading regime and new ways of updating it to meet the needs of a more closely integrated global economy. A discussion on the quantity and quality of employment in the context of multilateral trade must be part of this discussion.

Three key questions emerged from this conference:

• Are the linkages between trade and employment and labor better dealt with in the multilateral arena, or do multilateral rules restrict the national space to deal with these issues effectively?
• If one concedes that multilateral rules on trade and employment and labor are necessary, then what is the right forum in which to deal with these issues—the World Trade Organization or the International Labour Organization?
• Are there lessons in how trade can be harnessed to generate more and better employment?

In the coming months, the Just Jobs Network, in partnership with other organizations, hopes to undertake research to answer these questions.

Finding a new balance between livelihood generation and markets

Globalization, urbanization, and technological advancement are all upending traditional employment models. Rural workers face pressure from automation. Rural-to-urban migration changes social networks, frequently leads to overcrowding in cities, and can fuel informality even in the organized sector. As more workers flood an already-saturated urban labor market, workers become inclined to accept work without a contract or benefits—or they choose to be self-employed, often in the informal sector, bypassing the traditional employer-employee relationship.

These trends, along with a new set of challenges confronting the globe—the voyeuristic consumption of energy and natural resources, free riders willing to take advantage of a closely integrated global economy without sharing the costs, strain on infrastructure, and the production and distribution of food—call for new regulations and institutions to govern the 21st century economy. These new regulations and institutions must be geared toward creating jobs and skilled workers in new sectors such as clean energy. They must safeguard the rights, health and safety, productivity, and consumption power of workers so that they can fuel a 21st century global economy.

The Just Jobs Index

The conference featured the launch of the Just Jobs Index, which identifies and ranks the countries that are the best in providing employment opportunities, income and employment security, safety at work and healthy working conditions, and equality of treatment and opportunity.

The Just Jobs Index is a comprehensive, data-driven approach to measuring the quantity and quality of jobs around the world. It provides an aggregate measure of one of the most important questions facing global economic policymakers: Are we creating enough just jobs? The Just Jobs Index will help researchers and practitioners evaluate the effectiveness of countries in providing just jobs.

The Just Jobs Index will be valuable to policymakers, researchers, and field practitioners. Currently, there is no single measure of just jobs. Other global economic indices—such as the World Bank’s Doing Business project or the World Economic Forum’s Global Competitiveness Report—tend to focus on the corporate side of the global economy. The Just Jobs Index fills a gap, allowing researchers to address labor and employment along with the business side.

The top five performers in 2009, the latest year for which data were most available, were Iceland, the Netherlands, Norway, Australia, and Denmark. Why? Because these countries put workers first, a paradigm not often pushed at the International Monetary Fund, the World Bank, or the G20, where profits, donors, and shareholders often come first.

The Just Jobs Network and Fafo Institute are humble about our approach to the Just Jobs Index.  We acknowledge that this is Version 0.1 of the index and that it will be improved upon. At this point, however, the current version of the index goes a long way in laying out the methodology for constructing this innovative index, highlighting existing data gaps, and recognizing the immense value of creating such a tool for comparison.

Conclusion

Our hope at the Just Jobs Network is that by working with a diversity of stakeholders to address these issues in greater detail over the coming months, we can together build a new doctrine of inclusive and sustainable economic growth with quality employment at its heart.

The diversity of attendees was one of the most powerful contributions of this conference. Those engaged in policymaking in parliaments and central governments had the opportunity to hear from grassroots activists and entrepreneurs who are crafting livelihood opportunities at the community level. And those working on the ground were able to situate their community-based work within a platform seeking change at the national and international level. Fresh research gave both groups new information to guide their agendas.

The impact of these two days in New Delhi will be determined by our collective ability to maintain this dialogue and communicate between the grassroots and policy horizons.

Sabina Dewan is Director of Globalization and International Employment at the Center for American Progress, where she also directs the Just Jobs Network.

Endnotes

SOURCE: AP/Akira Suemori

Demonstrators march in central London, Saturday, March 28, 2009.

Endnotes and citations are available in the PDF version of this report.

Jobs have taken center stage in the development agenda since the financial crisis of 2008. The Just Jobs Network works to promote just jobs—those complete with appropriate compensation, social protections, labor rights, and opportunities for economic mobility—as the basis for broad-based, sustainable economic growth.

As part of that effort, we have developed a new international measure of fair jobs—the Just Jobs Index—to broaden the global discourse on employment beyond the common emphasis on unemployment and to address job quality.

The Just Jobs Index, or JJI, illustrates that an initiative to examine the relative availability of just jobs in countries at different stages of development is not only possible but also insightful. At the same time, our efforts show just how far there is to go in filling in the data gaps for developing and developed countries alike.

The JJI assesses the nature and extent of fair jobs at a country level and creates a vivid picture of work opportunities, income and employment security, and equality of treatment and working conditions. It is the first international measure of its kind and offers an essential complement to various indices such as the human development index, or HDI, that aggregately measure development. The JJI can be a useful analytical tool to identify countries that are successfully providing quality employment opportunities. It can also help researchers identify the mechanisms by which economic growth translates into higher standards of human welfare and more efficient economic and social development, and vice versa.

In addition, the JJI reveals interconnections among the various dimensions of job creation and how working conditions can be improved. This enables policymakers to target resources and design policies more effectively.

The findings presented in this issue brief represent only the preliminary estimates and analyses of just jobs in many developed and developing nations across the world. Despite the exciting possibilities, however, this version of the index is limited by the lack of data in both developing and developed countries.

Good policymaking requires good data. Without good data, we cannot accurately identify where policy is working and where it is failing. Unfortunately, the vast majority of countries do not have all of the relevant data that would allow researchers and policymakers to measure employment availability, opportunity, and quality. Dimensions such as social protection and social dialogue, which we struggled to include in this initial version of the JJI, could be more fully incorporated into future versions if the data become available.

This issue brief summarizes the new index’s preliminary findings, explains how the index was constructed, and suggests ways the index might communicate core findings that governments, development agencies, and other stakeholders can use to address the jobs concern and identify relevant policy measures.

Millions of Americans exercise their right to participate in a union every year. Unions make the middle class strong by ensuring that workers have a strong voice in our economy and our democracy. But union membership is declining, and the middle class is shrinking.

The Center for American Progress Action Fund produced a video series documenting what is at stake in three real stories of how unions make the middle class.

SOURCE: AP/Carolyn Kaster

President Barack Obama speaks at Ohio State University's spring commencement ceremony in the Ohio Stadium, May 5, 2013, in Columbus. He urged graduating students to be active citizens, to fight for causes they believe in, and to be better than generations before them. The rise in income inequality and the decline of the middle class have contributed to underinvestment in higher education.

State spending on colleges and universities has dropped off sharply in recent years. Most people blame the Great Recession and its effect on state budgets for this decline, but this misses the larger story. We are underinvesting in education because the middle class has weakened and no longer has the political power necessary to translate its desires into actions. And this underinvestment threatens our economic competitiveness as more students are priced out of college and other countries surpass us in educational attainment.

Polling strongly suggests that the American public would prefer higher levels of spending on higher education. A Brookings Institution/Northeastern University poll conducted in October 2012, for example, found that 70 percent of the public felt that a college education is very or extremely important for achieving the American Dream, with an additional 24 percent saying it is somewhat important. Not surprisingly, the poll found that 81 percent of Americans believe the government needs to invest more in America’s higher education system. Other polls show similarly high figures: The General Social Survey, for example, a longstanding academic survey, finds that 72 percent of Americans support spending more on education.

So if the public wants more education spending, why hasn’t the government been more responsive and boosted spending?

Undoubtedly, increased pressure on state budgets has contributed to the 28 percent reduction in state spending on higher education since the Great Recession began in December 2007. But other factors are also at work.

States can choose what to spend money on and at what level to set taxes, and thus have some ability to prioritize higher education over other demands. Indeed, two states—North Dakota and Wyoming—have actually increased spending on higher education since the Great Recession began. And in states that have reduced spending on higher education, cuts range from a low of just 3 percent to a high of 50 percent.

There are many reasons for these differences, including state income levels and demographics, but one underappreciated reason is the declining political clout of the middle class and the growing influence of the affluent. As incomes for the middle class have stagnated and those for the top 1 percent of Americans have exploded over recent decades, the political power of the rich relative to the broad middle class has consequently increased. As a host of studies show, in an increasingly unequal America the voices of the rich carry great weight with politicians, but the desires of the middle class are often ignored.

When push comes to shove, education spending generally isn’t as important for the wealthy as it is for the middle class. As a result, the United States spends less than the general public—and the middle class—would prefer.

Certainly the wealthy often support spending on public education, but the intensity of their support for education spending is far less than that of the middle class. That’s because the rich have greater ability to send their children to private colleges, while the middle class depends more upon public universities.

And compared to the middle class, the rich are much more concerned with keeping taxes low than with paying for public education. Indeed, as Princeton University political scientist Martin Gilens found in his study of nearly 2,000 poll questions, the wealthy are “much less supportive of taxes and government spending” than the middle class.

A groundbreaking poll of very rich Americans, roughly the top 1 percent of wealth holders, highlighted how the preferences of the wealthy and the middle class diverge on education. The authors—political scientists Benjamin Page, Larry Bartels, and Jason Seawright from Northwestern University and Vanderbilt University—found that only 28 percent of the wealthy agreed that the government should “make sure that everyone who wants to go to college can do so,” compared to the 78 percent of the general public that agreed. Similarly, only 35 percent of the wealthy felt that the “government should spend whatever is necessary to ensure that all children have really good public schools they can go to,” compared to 87 percent of the general public.

When the wealthy have more power, their preferences are more likely to prevail. This is clear when analyzing spending on education across the 50 states.

A simple look at the data shows that states with strong middle classes spend more on higher education. Figures 1 and 2 show that the 10 states with the strongest middle classes—defined by the share of income going to the middle 60 percent of households—spent more on higher education, both as a share of the budget and gross domestic product, or GDP. In 2010 the 10 states with the strongest middle classes the year before spent, on average, 10.5 percent of their budget and 2.05 percent of their GDP on higher education. In contrast, the 10 states with the weakest middle classes averaged expenditures of 8.8 percent of their budget and 1.53 percent of their GDP.

Critically, these results hold even when controlling for other factors that influence education spending.

Specifically, in a regression analysis that controls for other factors that affect education spending, such as state income levels, the share of the population comprised of people of color, and the age distribution of the state, states with stronger middle classes spend more—as a share of their economy and of their budget—on education. We find that a 1 percentage-point increase in the share of income going to the middle 60 percent of income earners is associated with a 0.1 percentage-point increase in the share of the state’s budget spent on higher education and a 0.015 percentage-point increase in the share of the state’s GDP spent on higher education in the next year.

These results are consistent with a more detailed report we wrote in November 2011 on elementary and secondary education, “Middle-Class Societies Invest More in Public Education.” Those interested in on our methodology and data can consult the appendix of that report for more details.

The economic future of the United States is intrinsically tied to the future of American education. In the era of heightened global competition, the United States needs to make sure that all of its citizens are prepared to seize the economic opportunities of the future. Ensuring the American population is well educated is vital to that effort.

Just as the need for a well-educated workforce is highest, however, the United States appears to be failing in this effort. While other countries have worked to ensure that their citizens have become more educated, education levels in the United States have stagnated in recent decades, and part of that stagnation is because we are underinvesting in education.

As of 2010 about 41 percent of Americans between the ages of 55 and 64 had at least a college degree, while the college-educated share of Americans between the ages of 25 and 34 was only slightly higher at roughly 42 percent, according to data from the Organisation for Economic Co-operation and Development. This small difference means that the United States has not made significant increases in college attainment in recent decades.

Compare this stagnation in college attainment to the large gains made by our neighbor to the north, Canada, whose middle class has remained relatively strong. Similar to the American population, about 42 percent of Canadians between the ages of 55 and 64 had at least a college degree as of 2010. Fifty-six percent of Canadians between the ages of 25 and 34, however, had at least a college education—a gain of 14 percentage points. While the United States has stagnated in terms of college-graduation rates, Canada and others have succeeded in furthering the education of their citizens.

Increased access to higher education is often described as one of the remedies for the current historic level of income inequality. But as this analysis shows, the rise in income inequality and the decline of the middle class has skewed public policy toward the wishes of the rich and contributed to underinvestment in higher education. This suggests that strengthening the middle class will require not only policies that directly help the middle class—such as investments in education—but also political reforms to ensure that the voice of the middle class is heard.

David Madland is a Senior Fellow at the Center for American Progress. Nick Bunker is a Research Assistant with the Economic Policy team at the Center.

SOURCE: AP/Cliff Owen

Pre-K teaching assistant Mirna Ayala, left, and teacher Laura Amling, right, work with their three-year-old students to draw an alphabet shape at Powell Elementary School in Washington.

Endnotes and citations are available in the PDF version of this issue brief.

SOURCE: AP/Damian Dovarganes

Child care aid recipient Sarah Comito kisses her son Matthew at their home in Oxnard, California.

Endnotes and citations are available in the PDF version of this report.

Over the past half century, the American family has undergone cataclysmic change. In 1950 only 11.9 percent of women with children under the age of 6 were in the labor force; today 77 percent of those mothers work outside the home. In 1968 48 percent of children were raised in homes where the father worked full time, the mother was not in the labor force, and the parents were married; 40 years later only 20 percent of children lived in such households.

Women have gone from making up only about one-third of the U.S. workforce in 1969 to nearly half of the workforce now, and their earnings have become increasingly essential to families’ basic economic stability. Yet while the structure of America’s families has changed, their basic needs have stayed essentially the same. Children must be cared for and raised; dinners have to be made, and sick relatives have to be taken to the doctor and attended to at home. Indeed, it could well be argued that the demands of caretaking have only grown in recent years, as an “intensive” style of parenthood has increasingly become the norm and the care needs of a generation of grandparents with greater longevity have exploded.

American society has consistently failed to adapt to the heightened demands placed upon its families and, in particular, on women. Our workplaces are structured today as though we were still living in the early 1960s. The United States is the only industrialized nation that does not guarantee working mothers paid time off to care for a new child. We are the only developed country that doesn’t guarantee paid sick leave. The lengths of our school day and school year are grossly insufficient to meet the needs of working families, with the result that 15 million school-age children are unsupervised every afternoon. What child care “system” we have—Head Start for the most at-risk young children and Child Care Development Fund vouchers for the working poor to purchase what care they can—is both grossly inadequate in the number of families it serves and also chaotic, haphazard, and starved of the funds that could guarantee young children an acceptable standard of care. Even the most fortunate—the better-educated and better-off professionals who tend to have access to paid leave, flexibility, sick days, and decent child care—find balancing the necessary demands of work and home an increasingly fraught and anxious-making endeavor in our era of “extreme jobs” and 24/7 availability.

The need for policies that can at least begin to ease the massive pressures on American families is indisputable. Nearly three-quarters of Americans now say that they, their neighbors, and their friends experience hardship in balancing work, family, and professional responsibilities at least somewhat often, and nearly 40 percent say that they experience such conflict “all the time” or “very often.” In addition, a whopping 72 percent report that they and their families would be likely to suffer significant financial hardships if they had a serious illness or needed to care for a new child or a family member who was ill.

“It just doesn’t have to be that way, doesn’t have to be that hard.”
– Michelle Obama, White House Forum on Workplace Flexibility, 2010

It’s long been accepted wisdom that Americans view family matters as purely private concerns and that public policy solutions for families—other than the very poorest—have no place in our culture. Yet polls consistently show that support for family-friendly policies is, in fact, overwhelming. A bipartisan poll of more than 1,200 voters, conducted in November 2012 by Lake Research Partners and The Tarrance Group, found 86 percent of respondents saying that it was important for Congress and the president to consider new laws such as paid sick days and paid family and medical leave insurance, with nearly two-thirds of the respondents saying that they judge such action to be “very important.” This support held up across party lines, with 73 percent of Republicans, 87 percent of Independents, and 96 percent of Democrats in agreement. Other polling has found that more than two-thirds of Americans agree that the government or businesses should be doing more to help fund child care for working parents;  three-fourths of Americans believe that employers should give workers more flexibility in their schedules and work locations; and three-quarters of Americans support a policy guaranteeing employees a minimum number of paid sick days.

Despite this very robust support, there has been remarkably little progress in family policy over the past several decades. And the few victories achieved have been hard fought, partial, and constantly challenged:

• The Family and Medical Leave Act of 1993, which provides workers with 12 weeks of unpaid, job-protected leave to recover from a serious illness, care for a new child, or care for a seriously ill spouse, parent, or child, was passed with such onerous eligibility limitations that 40 percent of all workers in the United States are now excluded from coverage.
• The Child and Dependent Care Tax Credit, which allows qualifying families to deduct from their taxes up to $3,000 for the costs of care for one dependent or $6,000 for the care costs for two or more, is nonrefundable and excludes low-income families who do not owe taxes.
• The Child Care and Development Block Grant, which created a voucher system for needy working families or mothers transitioning from welfare, was created with virtually no federal standards and has funding levels so low that today only one in six children eligible for assistance receives it. In 2011 22 states had waiting lists; in Florida alone in 2012 that list contained the names of 75,000 children.

In the past decade, some points of light have emerged from some states and cities. State funding for public pre-kindergarten programs more than doubled nationwide between 2001 and 2011, with nine states passing legislation to provide universal pre-K programs to all 4-year-olds. Only a handful of those states, however, had allocated sufficient funding to reach all eligible children as of this writing. Paid family leave became a reality in California and New Jersey in 2002 and 2008, respectively. It also became a reality on paper in Washington state in 2007, but implementation has been delayed repeatedly because of a lack of funding. Four cities—Seattle, Washington, D.C., San Francisco, and Portland—and one state—Connecticut—have passed laws granting at least some workers the right to paid sick days.

Yet even these advances have been very partial and, in the case of pre-K, have come under serious threat in the wake of the Great Recession. Total state funding for pre-K programs decreased by nearly $30 million between 2009 and 2010 and by $60 million between 2010 and 2011. Four states—Michigan, Minnesota, Missouri, and Ohio—now enroll a smaller percentage of 4-year-olds than they did a decade ago, and Arizona defunded its program entirely for the 2010–2011 school year.

Paid leave in California and New Jersey was passed with compromises that sacrificed workers’ job security. As a result, a troubling number of those who need it don’t take it. A 2011 follow-up study on the effectiveness of paid leave in California found that about one-third of the workers surveyed who had been aware that they had the right to paid family leave didn’t apply for it because they feared making their employers “unhappy” and possibly being fired. The survey also found that one-third of respondents who knew that they were entitled to paid leave didn’t apply for it because the level of wage replacement was simply too low.

The growing success of paid-sick-day advocacy has sparked newly energetic and effective efforts by business groups and hostile politicians to turn back the tide, most recently through the use of state-level “preemption” legislation designed to prohibit local governments from passing their own ordinances—such as paid-sick-day measures—that are inconsistent with state law. Lawmakers in Wisconsin were the first to embrace this strategy, passing a law in 2011 that voided a highly popular 2008 Milwaukee paid-sick-day measure. In 2012 lawmakers in Louisiana passed similar legislation aimed at preventing local authorities from taking any future action on paid sick days, and Mississippi, Florida, Michigan, Arizona, Indiana, and Washington state are currently considering similar measures.

Why has change been so slow to come and so paltry? Why is there such a gap between public opinion and political will? And why has it been possible, at some times and in some places, to achieve at least some positive change? What lessons can be drawn from the few instances of success and the many failures that we’ve seen in the family policy arena? This report seeks to answer these and other pressing questions, with the goal of envisioning a road map for the future.

Throughout its 10-year history, the Center for American Progress has generated an influential body of research cataloguing the challenges facing today’s families and spelling out policy solutions that would better their lives while enhancing the economic strength of our nation. We have long argued that adopting policies that allow all people to realize their human potential are not only the “right” thing for us to do as a society but also the necessary course of action to promote long-term growth and prosperity. Faced with the glaring discrepancy between the urgent need for policies to help families thrive and the sluggish pace of progress, we felt that it was time to take a step back and reflect on both our successes and our failures. We wanted to take stock of our strengths and examine the roadblocks—the attitudes, ideas, and practices of our allies as well as our opponents—that have stood and continue to stand in our way.

This report does not seek to give an encyclopedic account of the battles of the past, nor does it delve into the intricacies of policy analysis or potential legislation. (For this, please see the following among CAP’s most recent policy papers: “Investing in Our Children: A Plan to Expand Access to Preschool and Child Care,” “Our Working Nation in 2013: An Updated National Agenda for Work and Family Policies,” and “Comprehensive Paid Family and Medical Leave for Today’s Families and Workplaces: Crafting a System that Builds on the Experience of Existing Federal and State Programs.”) It is instead a work of reflection. It’s based on interviews with more than three dozen veterans of the fight for family-friendly policy in America representing a variety of perspectives, generations, and stakeholder groups. Our goal has been to distill hours of wide-ranging conversation down to the essence of what that aggregate experience has taught.

The first part of the report covers the positive lessons learned about messaging and messengers, timing, coalition building, an ideal scope of legislation, and fighting the opposition. What has worked in the battle for family-friendly policies is relatively straightforward:

• Recruiting and engaging powerful, high-profile champions
• Conceiving policies that affect the largest number of people possible
• Building broad and diverse coalitions, including members of the business community
• Being flexible and creative
• Using language that corresponds to widely shared American values
• Driving home to elected leaders that supporting family-friendly policy pays off politically
• Recognizing when the stars are aligned and seizing the moment
• Remembering that successful legislation requires follow up
• Taking the long view

The second part of the report takes up the more challenging problem of examining what didn’t work and what still isn’t working. This discussion turns around three central questions:

• Why, despite the persistent, pressing, and long-standing need for support for working families, hasn’t there been a strong public demand for policy change?
• Why hasn’t the push for policies such as paid sick days or paid family and medical leave—measures which could benefit everyone at some point in their lives—attracted a dedicated constituency?
• Why have families never been able to unite as a meaningful lobby?

The lack of demand and a lack of awareness that there might even be something to demand, combined with the related lack of a lobbying constituency, have made it very difficult to mobilize public opinion, much less political will, on behalf of families and children. We explore this problematic lack of demand in the second half of the report. And we argue that what we need to do moving forward is change the national conversation about the struggles of working families in America. We need to bring new voices to the debate and also shift the debate away from received wisdom and cliché so that the real needs of real families are heard and addressed. To do this, we must:

• Counter the argument that work-family conflict is a purely private concern that individuals need to “work out” on their own.
• Replace the belief that “this is just how it is” with the argument that “it doesn’t have to be this way.”
• Contradict the conventional wisdom that family-friendly policies are bad for business with proof that they in fact boost growth.
• Recognize that while work-family conflict is universal, how it plays out and how people talk about it varies in different communities—and develop messages that take those varied viewpoints into account.
• Undertake an ambitious new body of research to find out what people want, what they feel would be most helpful in making their lives easier, and what words they use to talk about work-family issues. This effort should take the form of a national listening tour that would draw in a wide variety of different communities, including conservatives and people of faith.
• Build a movement to develop a sense of urgency and excitement around these issues.
• Make sure that work-family policy finds its place as part of a broader, inspiring, progressive agenda that seeks to help people meet all of their responsibilities and improve their lives.

This is a promising time to both reflect upon the past and also consider the future of family policy in America. In 2012 our country re-elected a Democratic president with a proven commitment to issues of family economic security, who has signed legislation promoting equal pay for women, hosted a White House forum on workplace flexibility, and expressed a desire to meaningfully expand access to affordable, high-quality child care. President Barack Obama’s call for high-quality pre-K for all children in his 2013 State of the Union address showed that family-friendly policy now has a place at the heart of the progressive agenda. What’s more, the record presence of 20 women in the Senate, as well as a number of female members of the House with a long track record of advocacy on women’s and children’s issues, argues strongly for the possibility of initiating a substantive conversation on family policy in the current Congress. And the passage of health care reform legislation has the potential to prove to Americans at all income levels that government policy—public action—can lead to positive change in their families’ lives.

In addition, demographic changes have given more voice and power to women, Latinos, and African Americans—constituencies with a proven record of greater support for family-friendly policies and greater faith in the role of government—in particular, federal government. Furthermore, the growing power of Millennials as a political force heralds the arrival in politics of a generation of both men and women who consider the ability to combine work and family essential to living a good life. The Great Recession, which introduced significant numbers of middle-class people to the dislocation and insecurity of life in low-wage, no-benefit jobs, led many Americans to rethink the role that government could and should play in their lives. Bleak though the legislative outlook now seems in our bitterly divided Congress, this is potentially a very fruitful time for thinking creatively and productively about creating a better future for our families.

Judith Warner is a Senior Fellow at the Center for American Progress.

SOURCE: AP/M. Spencer Green

President Barack Obama gestures as he speaks at Argonne National Laboratory in Argonne, Illinois, Friday, March 15, 2013. Policymakers can take steps to strengthen the middle class that won't cost taxpayers any money.

Strengthening America’s middle class should be elected officials’ top priority. Incomes are either stagnant or falling for the middle class, while the costs of life’s necessities continue to rise. As a result, the risk of the middle class falling behind economically is growing. A weak middle class hurts all of us by stifling our country’s economic growth and undermining our democracy.

Unfortunately, reducing the deficit has distracted our political leaders from this pressing challenge and has made it seem like little can be done, as Congress blocked or failed to act on important legislation to help the middle class. In reality, however, there are many things that the federal government can do to help the middle class.

Rather than make excessive short-term budget cuts as we are currently doing, we can and should make needed investments in the middle class, such as expanding access to preschool and child care, as part of a package that reduces the deficit over the longer term, as CAP has proposed on many occasions. Furthermore, there are a number of things that policymakers can do that won’t require any additional expenditures.

To help remind politicians that they have lots of room to act, we have compiled a list of the top six policies that would help the middle class without costing taxpayers a penny. Together, these policies will boost the incomes of millions of hardworking Americans; put families on a path to a sustainable retirement; ensure that workers don’t have to choose between staying home while sick or losing their job; allow struggling homeowners to stay in their homes; and empower students with valuable information on college quality.

While these policies would not address all of the challenges faced by the middle class, they would make a meaningful difference in the lives of millions of working Americans.

1. Increase the minimum wage

Over the past four decades, workers have become much more productive and our country has become much richer, but the value of the minimum wage has declined significantly. Since 1968 the inflation-adjusted value of the minimum wage has declined by 31 percent.[1] The minimum wage would be more than $10.50 per hour today if it had kept up with inflation. This decrease has occurred even as workers have become more productive. Over the same period of time, productivity—the measure of output per hour of work—increased by 124 percent.[2] (see Figure 1)

Raising the minimum wage would not only help boost incomes for those struggling to reach the middle class, but it would also cause employers to raise wages through “spillover effects” for even those more solidly in the middle class. After increasing wages for low-wage workers, employers feel the need to increase the wages of workers near the minimum wage in order to preserve their relative position. Studies have estimated that this spillover effect can increase the share of the workforce affected by the hike by 5 to 10 percentage points.

Furthermore, raising the minimum wage is good for the economy because it boosts workers’ purchasing power, providing needed demand in the economy.

The minimum wage should also be indexed to prevent congressional inaction from reducing its value. Indexing to inflation is good, but indexing to one-half of the average wage would be better because it would help ensure that workers reap some of the economic gains they help create. It would also raise living standards as the country becomes richer.

2. Make saving for retirement easier, cheaper, and more secure

Social Security provides retirees an essential baseline of income, but middle-class Americans depend upon accumulations in private retirement accounts to maintain their standard of living in retirement. Because of flaws in our private retirement system, however, many Americans do not have enough retirement savings to maintain their current standard of living. Ernst and Young estimates that 59 percent of new middle-class retirees will outlive their retirement savings, while Boston College’s National Retirement Risk Index estimates that 53 percent of all households are at risk of having an insecure retirement. (see Figure 2)

In order to help the middle class retire with dignity, we need to expand retirement coverage and improve the quality of retirement plans available. We can achieve these goals and improve the current retirement system by creating a new hybrid retirement plan type—the Secure, Accessible, Flexible, and Efficient Retirement Plan, or SAFE Retirement Plan, a hybrid between a traditional pension and a 401(k) plan—and opening the federal Thrift Savings Plan, the 401(k) for federal employees, to the public.

Under this proposal, workers would be automatically enrolled in a retirement plan—their choice of the SAFE Retirement Plan, the Thrift Savings Plan, or their current workplace plan, if they have one. Furthermore, both of these new plans, especially the SAFE Retirement plan, would boost retirement savings and security compared to a typical 401(k) plan. The SAFE Retirement Plan is estimated to cost roughly half as much as a 401(k) to provide the same level of benefit, and savers in the plan would be more secure because risk is spread across all workers. The TSP would provide much lower fees and more suitable investment options than a typical 401(k).

These plans wouldn’t cost the government money because they are not government programs but rather sensible retirement plans facilitated by government action.

3. Lower monthly housing costs by providing homeowners with principal forgiveness

Although housing markets are beginning to recover from the collapse of the housing bubble, more than one in five homeowners are still “underwater” on their loans, meaning that they owe more on their mortgages than their loans are worth. (see Figure 3) Not only does this threaten individual homeowners, but the more than $600 billion in negative equity also significantly hampers economic recovery. Barring an ill-advised effort to reinflate the housing bubble, we will likely need to deal with the unique problems of underwater mortgages for some time to come.

Owing more on a home than it is worth is a significant threat to middle-class families that have long relied on homeownership as a means to build wealth. Home equity accounts for 40 percent to 50 percent of total wealth for middle-class families with incomes falling between $30,000 and $70,000.

Providing troubled underwater homeowners with principal forgiveness, which means permanently reducing the outstanding principal balance of an underwater loan to reflect current market value as part of a loan modification, can accomplish three important goals:

1. Help ensure the long-term success of mortgage modifications.
2. Stabilize the nation’s hardest-hit housing markets.
3. Remove a major barrier to consumer confidence and spending.

Some investors are already forgiving principal balances in their modifications, either through the Home Affordable Modification Program, or HAMP, Principal Reduction Alternative or as part of the National Mortgage Settlement. Using HAMP is optional for investors, however, even when reducing principal returns more value than simply forbearing principal. The U.S. Treasury Department should require that HAMP participants reduce principal in those cases.

Moreover, Fannie Mae and Freddie Mac are still barred from participating in the HAMP principal reduction program by their regulator, the Federal Housing Finance Agency, even though the agency’s own analytics demonstrate that allowing principal forgiveness with these incentives would save Fannie Mae and Freddie Mac $3.6 billion in total. Permitting the two mortgage giants to do principal forgiveness would be a significant step toward helping homeowners, the housing market, and the larger economy.

For all investors—including Fannie and Freddie as well as private investors—one option for reducing principal without taking the full loss is to offer “shared appreciation” loan modifications, in which the investor writes down principal in exchange for the borrower pledging to share with the investor a portion of any future appreciation when the home is ultimately sold or refinanced.

4. Let all workers earn paid sick days

Paid sick days should be available to all U.S. workers. Implementing this policy would provide greater job security to millions of Americans, reduce worker turnover, and ultimately strengthen the middle class.

There are currently no federal laws guaranteeing workers the right to earn paid sick days. Nearly 40 percent of workers in middle-income families and more than 55 percent of workers in low-income families do not have access to paid sick days.[3] Twenty-three percent of adults report either being threatened with losing a job or being fired for taking time off when they or a family member have been sick. (see Figure 4)

What’s more, adults that do not have access to paid sick days are 1.5 times more likely to go to work sick with a contagious infection or illness. The cost of “presenteeism,” or the decreased productivity of a worker who works when sick, costs the U.S. economy $160 billion each year, surpassing even the cost of absenteeism, when a worker doesn’t show up at all.

Policymakers should guarantee workers the ability to accrue up to seven job-protected, paid sick days per year to recover from their own short-term illnesses or care for an ill family member. The Healthy Families Act would implement paid sick days.

5. Ensure that workers who want to form a union are able to do so

Unions help strengthen the middle class by enabling workers to negotiate for fair wages and benefits and helping ordinary citizens get involved in the political process.

But as unions became weaker over the past four decades—due in part to an unfair union election process—they became less able to perform these functions. The middle class has withered as a result, with the share of income going to the middle class falling alongside the percentage of workers in unions. (see Figure 5)

Indeed, according to Harvard University’s Bruce Western and the University of Washington’s Jake Rosenfeld, “Union decline explains one-third of the growth in inequality—an effect equal to the growing stratification of earnings by education.” If unionization rates increased by 10 percentage points—to roughly the level that they were in 1980—the typical middle-class household, unionized or not, would earn $1,501 more per year, according to research conducted by the Center for American Progress Action Fund.

Unfortunately, the current union election process is stacked against workers who want to form a union. One study by Stanford University’s John-Paul Ferguson finds that 35 percent of the time that workers file a petition for an election, the election does not happen.

To ensure that workers who want to form a union are able to do so, the following should occur:

• The National Labor Relations Board should help put an end to needless election delays and modernize the union election process.
• Congress should pass comprehensive labor-law reform that establishes a fair process for workers to decide on union representation that expands coverage so that more workers are provided the right to organize; establishes meaningful penalties and remedies for workers who are fired or discriminated against for exercising their right to organize; and includes measures to promote productive bargaining between workers and companies.
• Congress should also make the right to join a union a civil right. This would give workers who are discriminated against in exercising their right to organize a private right to sue, just as workers have a right to sue if they face other forms of workplace discrimination.

6. Require colleges to provide consumer information via college scorecards

Two-thirds of students with four-year bachelor’s degrees finish their studies with student-loan debt, and the average amount of debt per student is nearly $25,000. (see Figure 6) Yet average debt loads at schools can range from $950 or less to $55,250, and graduation rates range from 0 percent to 91 percent. Many students, however, are unaware of these differences.

The federal government should require colleges and universities to do a better job of providing pertinent information to prospective students concerning their likelihood of graduating, finding employment, and paying off student debt. Schools should be required to direct students to this information on all promotional materials to allow students to easily compare schools.

Expanding access to college education is a key mechanism for building a strong middle class. The college wage premium—the percent increase that a college graduate earns compared to a similar worker without a college degree—is approximately 45 percent, according to data from the Economic Policy Institute. Furthermore, the overall middle class has shrunk as the supply of highly skilled workers hasn’t kept up with the demand for those skills. Approximately one-third of the rise in income inequality since the late 1970s is due to the rising college premium.

Despite the increasing return on investment in a college degree, many students still have a difficult time figuring out the costs and benefits of different schools. This is especially difficult for those who are the first college students in their families, as they lack guidance from family members who attended college and went through the process of choosing a school to attend.

The Obama administration has developed an important new tool in helping prospective students and their families access this information: a college scorecard, which provides a standardized, easy to read one-page summary of the cost, debt, and graduation rates of degree-granting colleges in the United States. The scorecard should be improved, however, in order to help more middle-class families access the information that they need to make an informed decision.

The college scorecard, for example, is currently only available on government websites. The federal government should require institutions to include information about the availability of the college scorecard on college websites, enrollment forms, financial-aid paperwork, and other promotional materials in order to make it visible enough to grab the attention of applicants. Moreover, the scorecard should include other important data such as the average earnings for recent graduates. Ideally, some critical data—graduation rates and earnings, for example—should be available at the degree and program level. Finally, comparison tools should be provided that allow for easy comparisons among institutions and, ultimately, degree and program levels.

Conclusion

The American middle class is in trouble. Hard work has less power to lift families into the ranks of the middle class. And even when working families achieve a middle-class lifestyle, unstable work environments, the rising cost of obtaining a college education, and the inability to save for a secure retirement make it difficult to remain in the middle class.

There are many things that the federal government can do to help secure the American promise that hard work can lead to a better future. Some measures will require additional investment in the middle class, and they can be part of a package that reduces the deficit over the longer term. Still other policies that Congress and the Obama administration can adopt would help the middle class without costing taxpayers a penny. The top six policies in this column provide a good place to start.

David Madland is the Director of the American Worker Project at American Progress. Karla Walter is the Associate Director of the American Worker Project.

Endnotes

[1] Authors’ analysis of data from the U.S. Bureau of Labor Statistics and the U.S. Department of Labor, Wage and Hour Division.

[2] Authors’ analysis of data from the U.S. Bureau of Labor Statistics.

[3] The family income categories used in this analysis are based on the categories first laid out in the 2010 Center for American Progress and Center for WorkLife Law report, “The Three Faces of Work-Family Conflict.” They are modified for the data available through the American Time Use Survey. The universe is families with a currently employed worker over the age of 18. Families are divided into three groups:

1. Low-income families, who make up approximately the bottom one-third—37.68 percent—of families by income
2. Middle-income families, who include those families not falling within the low-income and the professional-class families groups
3. Professional families, who make up approximately the top 20 percent of families—24.07 percent—in which the worker has at least a college degree

SOURCE: iStockphoto

As women’s earnings continue to become increasingly important to families, closing the gender-based wage gap is crucial to gaining access to wealth accumulation in communities of color, which are still deprived of economic security.

Endnotes and citations are available in the PDF version of this issue brief.

Today, April 9, is Equal Pay Day—the date that marks how many extra days women must work in 2013 to earn what men earned in 2012. Unfortunately, the wages of working women and particularly the wages of women of color continue to lag behind the pay of their male counterparts. Moreover, for women of color there is a double pay gap. As a group, women of color earn less than their white female peers—a reality that means they need to work longer to earn the same pay as white women and then even longer to match the earnings of white men. The gender- and race-based wage gap affects families of color with long-term consequences that hinder wealth accumulation.

Women currently make up about half of all workers in the U.S. labor force and among mothers in the labor force the majority are either breadwinners or share that responsibility with a partner. In 2010, 13.1 percent of women in the workforce were black, 4.7 percent were Asian, and 12.8 percent were Latina. What’s more, these women of color are increasingly the breadwinners in their families—53.3 percent of black households and 40.1 percent of Latino households.

This issue brief will examine our nation’s gender-based wage gap and its racial overlay. It will look specifically at the long-term implications of the wage gap on communities of color and then suggest policy recommendations to narrow and eventually eliminate the wage gap to ensure equal work earns equal pay.

The wage and income gap

The gender-based wage gap disproportionately hurts women of color who have made less than their white counterparts for decades. Women of color are more likely to work in lower-paying jobs and experience higher levels of unemployment and poverty.

Women on average earn 77 cents for every dollar a man earns for comparable work—a gender wage gap of 23 percent. Women of color suffer from an even more severe gap. According to the National Partnership for Women and Families, African American women and Latinas in the United States are paid $18,817 and $23,298 less than non-Hispanic white men yearly, respectively. That’s 64 cents and 55 cents for every dollar a man earns.

The gender gap persists for median weekly earnings as well. Women’s median weekly earnings in 2012 were $691, a marginal decline compared to 2011. Men’s median weekly earnings were $854, a marginal increase compared to 2011. Women of all major racial and ethnic groups earn less than men of the same group. The largest gap is within Asian American communities where women earn a median weekly income of $770 compared to $1,055 for Asian American men. While the wage gap between men and women is smaller within Latino and black families, their median weekly earnings are significantly lower. The weekly median earnings for Latinas are $521 compared to $592 for Latino men. For black women, their weekly earnings are $599 compared to $665 for black men. African American women’s median weekly earnings were only 68.1 percent, and Latina women’s only 59.3 percent of median weekly white men’s earnings of $854.

Nearly half of the wage gap between men and women is due to differences in occupations because women are concentrated in industries such as the care and social services sectors that historically pay less and provide fewer benefits. Another 10 percent of the gender wage gap is due to differences in work experience between men and women, which are often the result of caretaking responsibilities. Often times workers with care responsibilities, usually women, withdraw from the workforce or limit their time at work to allow them to provide needed care at home. As a consequence these caretakers earn less income in the short run, are less likely to earn raises and promotions, have less access to workplace retirement benefits, earn less in Social Security retirement benefits, and accumulate lower lifetime earnings.

Yet even when controlling for occupational differences, experience, and education level, economists cannot explain the remaining 40 percent of the wage gap between men and women. Certainly part of the gender gap is due to the fact that the American workplace and institutions, such as schools and churches, never adjusted to support working families. A lack of flexible structures for working families forces them to make tough decisions. Schools that do not offer early drop-off or late pick-up options to parents, for example, force families to decide between being missing work or paying for child care. For low-income families, such decisions could mean losing a job.

Long-term implications of the wage gap

Lower income for all women, particularly those of color, means less money to support their families with necessities such as housing, food, education, and health care. Closing the pay gap is even more important for women of color who are more likely than their white counterparts to be breadwinners.

The long-term wage gap hurts families of color tremendously, forcing families to choose between putting food on the table or saving for a college education and retirement. On average, an African American woman working full time loses the equivalent of 118 weeks of food each year due to the wage gap. A Latina loses 154 weeks’ worth of food. The stubbornly persistent gender-based wage gap adds up substantially over the lifetime of a woman’s career. For women of color the loss of savings over a 30-hour-a-week to a 40-hour-a-week work lifespan is significant. A woman of color will have to live on one-third to 45 percent less than a white man based on the average benefits that are afforded through Social Security and pension plans. Research shows that a woman’s average lifetime earnings are more than $434,000 less than a comparable male counterpart over a 35-year working life.

Analysis done in 2012 by the Center for American Progress illustrates that the money lost over the course of a working woman’s lifetime could do one of the following:

• Feed a family of four for 37 years
• Pay for seven four-year degrees at a public university
• Buy two homes
• Purchase 14 new cars
• Simply be saved for retirement and used to boost her quality of life when she leaves the workforce

Lifetime earnings are even lower for women of color because they face higher levels of unemployment and poverty rates. In March 2013 unemployment rates of black and Latina women were significantly higher than their white counterparts at 12.2 percent and 9.3 percent respectively compared to white women at 6.1 percent. According to the National Women’s Law Center, poverty rates among women, particularly women of color, remain historically high and unchanged in the last year. The poverty rate among women was 14.6 percent in 2011—the highest in the last 18 years. For black and Latina women that same year, the poverty rate was 25.9 percent and 23.9 percent, respectively.

Pay gap among Millennials

Furthermore, the gender wage gap often starts right out of college. The American Association of University Women reports that women are less likely than men to be fully employed in their first year out of college. When they do have a steady job, women earn less, adding to the burden of student loan debt. In fact, Millennial women—those born between 1978 and 2000—are paid 82 cents for every dollar paid to their male peers, and young women contribute a larger portion of their salaries to repaying student loans.  In 2009, 47 percent of young women were paying more than 8 percent of their income toward student loan debt one year after graduation. For Millennial men, only 39 percent were contributing more than 8 percent of their income to paying off their student debt.

These income disparities so early in a woman’s career create financial barriers that prevent women from obtaining the same types of economic advantages that are available to their male counterparts such as purchasing a house or saving for retirement. Women are losing out financially from their very first paycheck. Even when controlling for factors such as the type of degree earned, type of occupation right out of college, and hours worked in that job, researchers found a significant pay discrepancy across the board between Millennial women and men.

Millennial women of color are particularly impacted by the wage gap starting right out of college. Even while more women than men of color are graduating from college, the impact of student loans exacerbates the gender-based wage gap. From 2009 to 2010 black females earned 68 percent of associate’s degrees and 66 percent of bachelor’s degrees awarded to African American students. Hispanic females earned 62 percent of associate’s degrees and 61 percent of bachelor’s degrees awarded to Hispanic students. Since women of color are more likely to attend college within their communities, the amount of student debt that young students of color take out disproportionately impacts them. In the 2007-08 academic year, 81 percent of African Americans and 67 percent of Latinos with a bachelor’s degree graduated with student debt compared to 64 percent of their white peers. Although women of color are making progress in closing the achievement gap within their racial and ethnic groups, the impact of student debt on the wage gap right out of college puts women of color in a vulnerable state.

Barriers to wealth accumulation

Pay discrepancy often hinders wealth accumulation and creates barriers to moving into the middle class. Such income disparities translate into wealth gaps that fall particularly heavily on those living at the intersection of gender and race. Lower earnings mean fewer opportunities to participate in wealth-building mechanisms such as investments in stocks and bonds and pension plans. Access to these opportunities is often unavailable in low-paying jobs that are predominantly held by women of color. According to the Bureau of Labor Statistics, black and Latino women were significantly more likely than their white counterparts to be among the working poor—those who are employed whose incomes fall below the federal poverty line. The working-poor rates for black and Latino women in 2011 were 14.5 percent and 13.8 percent respectively compared to white women who had a working-poor rate of 6.6 percent.

Closing the wage gap is crucial for women of color. The racial wealth differences in the United States are consequences of disparities occurring over a lifetime and result in a median wealth of only $5 for women of color between the ages of 35 to 49—virtually no wealth at all. Conversely, white women in that age cohort have a median wealth of $42,600, and white men in that age group enjoy a median wealth of $70,030. While earnings are important in accumulating wealth, other factors play a significant role in building wealth including paid sick leave, health insurance, pensions, and 401(k) plans. Over time the lack of equitable pay prevents women of color from taking advantage of wealth-building resources that act as a buffer to potential financial setbacks such as a health emergency, a death in the family, or temporary unemployment.

As women’s earnings continue to become increasingly important to families, closing the gender-based wage gap is crucial to gaining access to wealth accumulation in communities of color, which are still deprived of economic security. 

Impact on immigrant women 

Immigrant women face specific economic barriers that make them the least economically secure population in the United States and puts them at a unique disadvantage. These barriers include the realities of having language and cultural barriers, the complexity of their immigration status, the responsibility of caring for extended family members, working in low-paying jobs, and lacking eligibility for many public benefit programs.

There are approximately 4 million undocumented immigrant women living and working in the United States, but because of their immigration status, they work the lowest-paying jobs in the country. Undocumented immigrant women typically earn minimum wage or less, get no sick leave or vacation days, and receive no health insurance. Undocumented immigrant Mexican women face hourly wage disparity of 71 cents. Pay equity is often a lifeline for immigrant women since many are mothers and are most likely to support family members in their home countries.

Immigrant women, especially those who are undocumented, are especially susceptible to abuse in the workplace as they work in low-paying jobs with no benefits and have little access to public-benefit programs. Since immigrant women predominantly work in the domestic workforce, they face a host of barriers to achieving pay equity in the workforce.

Immigrants comprise 46 percent of the domestic workforce and almost the entire population of domestic workers in major cities such as New York. A study by Domestic Workers United found that 33 percent of domestic workers in New York City experienced some form of physical or verbal abuse, often because of their race or immigration status. Under these conditions immigrant women struggle to achieve pay equity against the numerous barriers put up against them such as language and cultural barriers, immigration status, and concentration in low-income jobs with limited benefits.

Impact on lesbian women of color 

Lesbian women of color struggle even more with issues of pay inequity, high poverty, unemployment rates, and discrimination. Working gay and transgender people of color still earn less than their heterosexual and white gay and transgender counterparts, but lesbian women of color struggle even more severely. The average Latina lesbian couple earns $3,000 less than Latino opposite-sex couples. Black lesbian couples face an even greater economic disparity earning $10,000 less than black same-sex male couples. Black same-sex couples significantly lag behind white same-sex couples with median incomes of $41,500 compared to $63,500.

Furthermore, lesbian couples of color experience high rates of poverty and unemployment. In 2012 the poverty rate for black lesbian couples was 21.1 percent; for Latina lesbian couples the rate, was 19.1 percent; for Native American lesbian couples, the rate was 13.7 percent; and for Asian Pacific Islander lesbian couples, it was 11.8 percent. These numbers stand in stark contrast to white lesbian couples who had poverty rates of only 4.3 percent.

Pay equity is imperative for lesbian couples of color who are more likely to have children than their white counterparts. An estimated 2 million children are being raised in gay, lesbian, and transgender families who tend to be more racially and ethnically diverse. In fact 46.7 percent of black lesbian couples and 41.5 percent of Latina lesbian couples are raising children compared to 23.1 percent of white lesbian couples. These families suffer when household incomes are unjustly decreased based on gender-, race-, and sexual orientation-wage bias.

What closing the wage gap means for families

The disparity in income adds up to more than $430,000 in lost wages for an individual woman and even more for a woman of color over her working life. This means less food on the table, less in savings for retirement and medical emergency, less money going toward a college education for their children to name just a few of the negative financial impacts. If the wage gap were closed today, a working black woman with her increased yearly pay could afford one of the following:

• Groceries for more than two years
• Mortgage and utilities payments for almost 10 months
• Rent on an apartment for more than 16 months of rent
• Health insurance premiums for more than three years
• 4,549 additional gallons of gas

Furthermore, women breadwinners are on the rise among all races and ethnicities. From 1975 to 2010 black and Latina women nearly doubled in percentage of working wives who are earning the same or more than their spouses. Among black families, 53.3 percent of women are breadwinners, up from 45.7 percent in 2007 and 28.7 percent in 1975. For Latino and white families in 2010, about 4 in 10 working wives are breadwinners—nearly double their rates from 1975.

As families continue to rely on women to contribute to household income and support their families, closing the wage gap for all women and in particular women of color is an imperative.

Policy suggestions and recommendations

The gender wage gap doesn’t just hurt women; it also hurts families. With nearly two-thirds of mothers being breadwinners or sharing the responsibilities of supporting the household, women’s paychecks are vital to families more than ever.

Below are CAP’s suggested recommendations and policy solutions to significantly reduce the pay equity gap among women of color:

• Support the Paycheck Fairness Act. Sen. Barbara Mikulski (D-MD) and Rep. Rosa DeLauro (D-CT) co-sponsored the Paycheck Fairness Act, which will require that an employer to justify paying a man more than a woman for the same job. It would also make it easier for women to file class action suits against their employers for alleged sex-based discrimination. Though the bill failed to pass in 2011 and 2012, it was reintroduced this year. 
• Pass legislation to support paid sick and family medical leave. According to CAP’s paid family and medical leave report, federally required paid family and medical leave programs will likely have positive effects on employment and lifetime income. Requiring employers to provide sick leave not only ensures workers’ rights, but it will also help lessen gender-based pay disparities since women are more likely to use unpaid sick leave to care for their children.

Conclusion

Adequately addressing and eventually eliminating the income and wealth gap experienced by women of color requires a multifaceted approach led by engagement at both the state and federal level. As women’s earnings become increasingly important to family incomes, the wage gap becomes a family issue. Promoting and uplifting women of color is crucial to growing our economy. Ensuring that all working women, and particularly women of color, receive fair wages for their work not only means that they can adequately provide for themselves and their families, but also means they can make an even greater contribution to the nation’s prosperity.

Sophia Kerby is a Research Assistant with Progress 2050 at the Center for American Progress. 

SOURCE: AP/J. Scott Applewhite

Senate Majority Leader Harry Reid (D-NV), left, accompanied by Lilly Ledbetter, right, the woman who has become the symbol for the workplace-equality movement, speaks during a news conference on Capitol Hill in Washington, Tuesday, June 5, 2012, as the Senate considered the Paycheck Fairness Act.

An all-too-common response to workers and advocates concerned about the 23-cent gender wage gap for full-time year-round workers across occupations is that it is just a byproduct of the choices women make: choices to work fewer hours, take on lower-paying jobs, or opt out of the workforce for longer periods of time than men. When framed in this way, it’s easy to dismiss equal-pay policies or legislation as superfluous. After all, we can’t force women to apply for higher-paying jobs or to work longer hours, right?

Unfortunately, decades of evidence have revealed a far more complicated story, and it is clear that the gender wage gap is about more than just personal choice. It is a real and persistent problem, and it is a problem that calls for immediate and nimble policy solutions. But in order to achieve pay equity, it helps to understand the origins of the gap.

Among men and women employed full time, 60 percent of the wage gap can be attributed to known factors such as work experience at 10 percent, union status at 4 percent, and the aforementioned choice of occupation at 27 percent, among other measureable differences. (see Figure 1) A woman’s work experience is abbreviated if she needs to take maternity leave or take time off from a job to care for a child, which she is more likely to do than her male counterpart. Another quarter of the wage gap is attributable to the differences in wages paid by industries that employ mostly men or mostly women. These include blue-collar industries such as mining, manufacturing, and construction, which generally employ men, and service-sector or clerical jobs, which generally pay less and employ more women.

One mitigating factor that has actually reduced the gender wage gap is women’s access to higher education. This has helped ease the disparity by nearly 7 percent, as shown in Figure 1, but women’s access to college and advanced degrees has not been enough to close the gap completely. Women need an additional degree in order to make as much as men with a lower degree over the course of a lifetime. A woman would need a doctoral degree, for instance, to earn the same as a man with a bachelor’s degree, and a man with a high school education would earn approximately the same amount as a woman with a bachelor’s degree.

But what causes the remaining gap of more than 10 cents on the dollar—or $4,465 per year among workers making the median wage—between men and women? This is less clear but perhaps more troubling. More than 40 percent of the gender wage gap is “unexplained,” meaning that there is no obvious measureable reason for a difference in pay. This leaves us with possible explanations that range from overt sexism to unintentional gender-based discrimination to reluctance among women to negotiate for higher pay.

Whatever the reasons, a woman should have recourse if she is being paid less than her male counterpart for the same job. Passing the Paycheck Fairness Act and establishing a commission to address the gender pay gap would both be important steps toward achieving this goal.

Jane Farrell is a Research Assistant for Economic Policy at the Center for American Progress. Sarah Jane Glynn is a Senior Policy Analyst at the Center.

SOURCE: AP/Matt Rourke

Supporters of Pennsylvania's new law increasing the minimum wage rally in Philadelphia. If women were paid a living wage, the gender-based wage gap would decrease in growing industries.

Approximately 6.2 cents, or 27 percent, of our nation’s 23-cent gender wage gap can be explained by occupational segregation. This means that women are more likely to be employed in low-wage or minimum-wage service-sector positions such as home health aides, retail salespersons, or food-service workers.

These jobs fill essential functions in our economy, are increasingly in high demand, and represent occupations with the largest projected job growth over the coming years. Unfortunately, they are also undervalued and most of these positions are not currently providing adequate compensation to the people who work in them, predominantly women.

The top 16 occupations with the most expected job growth will create a total of 6.5 million new jobs by 2020.[1] Women made up 70 percent of workers in these occupations in 2010,[2] but the median annual wage for these 16 jobs was just $30,015 (in 2010 dollars). If these trends hold true through 2020, a disproportionately large and growing number of women will continue to occupy these oftentimes low-wage jobs.

One way that policymakers can help close the gender wage gap is by supporting policies that ensure that all jobs pay a living wage and provide adequate protections and benefits to workers. Our labor policies, including minimum-wage requirements, should help protect those who occupy important, if currently undervalued, positions in our economy.

Sectors with projected job growth must pay a living wage

As shown in the chart below, two of the top four occupations with the most projected growth are home health aides and personal care aides. (see Figure 1) In 2010 women were 88 percent of home health aides and 86 percent of personal care aides. Of these women, half were women of color, who on average experience an even larger gender wage gap than white female counterparts in the same industries.

Jobs in the fastest-growing sectors could decrease the wage gap if they paid a living wage

.

The median annual wage for these jobs is around $20,000 per year, and many do not offer important benefits. Less than half of home health aides and personal aides employers provide health insurance, and even fewer offer paid sick leave. Women who work in these jobs frequently rely on public benefits such as food stamps, public housing, or energy assistance to make ends meet even though they are fully employed. While providing important and needed care to other people’s families, they are often forced to choose between missing a day’s pay or caring for their own loved one.

While home health and personal care aides are not currently receiving the compensation they deserve, they provide vital services by caring for elderly and disabled Americans. Millions of Americans currently rely on home health and personal aides for their care and medical needs, and that number is only going to grow in the coming decades as the ratio of people over age 64 to people ages 20 to 64 is expected to rise by 80 percent. Moreover, the home care industry is thriving, bringing in more than $84 billion in revenue in 2009 alone.

Since positions such as home health and personal care aides don’t offer access to decent wages or benefits, these positions suffer from turnover rates of 40 percent to 60 percent. High turnover rates take a toll on the bottom line of the companies that employ these workers because the costs of replacing and training an employee are very high. Replacing an employee making $30,000 a year or less can cost an employer as much as 16 percent of the employee’s annual salary. Turnover also may take a toll on the quality of care that patrons receive. Having a workforce that is always in flux likely limits consumer access to highly experienced home-care providers.

Our society needs the services women are providing in the health sector, and we need to offer them wages and benefits that makes holding those jobs sustainable.

Conclusion

Women are overrepresented in professions that make the list of the top 16 jobs with the most projected job growth over the next few years, but these occupations also pay the lowest median wages.

Looking at particular industries shows stratifications between men and women’s access to higher-paying jobs. Figure 1 above, for example, shows that women are 94 percent of child-care workers, who typically make a median annual wage of less than $20,000 per year. Conversely, women make up less than half of postsecondary teachers, who earned a median annual wage of more than $45,000 in 2010. While women are also more than half of all food-service workers—one of the fastest-growing professions—they are 70 percent of low-paid counter workers, servers, and food-preparation workers but only 20 percent of chefs and head cooks. The same can be said of women and men in retail. The gender wage gap within retail sales is among the largest of any occupation, with women only making 64.3 percent of what their male counterparts make.

The evidence is clear: Women are currently employed in jobs that are serving vital functions in our society. In fact, their labor is in such demand that many of the jobs primarily held by women are among the fastest growing in the country. But we are not valuing their work by compensating them fairly and giving them access to the benefits or salaries that they need. Until we recognize and reward the work of women who currently hold the lowest-paying jobs in this country, we are unlikely to eliminate the wage gap.

Jane Farrell is a Research Assistant with the Economic Policy team at the Center for American Progress. Lindsay Rosenthal is a Research Assistant with the Health Policy program and the Women’s Health and Rights program at the Center.

Endnotes

[1] We chose the top 16 occupations because they were all projected to grow by approximately a quarter of a million jobs or more between 2010 and 2020.

[2] Based on author’s calculations using data from the Bureau of Labor Statistics, Employment and Earnings Report, January 2011 (Department of Labor, 2012); Bureau of Labor Statistics Employment Projects, “Table 1.4: Occupations with the most job growth, 2010 and projected 2020,” available at http://www.bls.gov/emp/ep_table_104.htm (last accessed April 2013).

There are 5.4 million undocumented women living in America, and those who are employed are perhaps the most underpaid workers in the workforce due to the double wage disparity that is a consequence of gender-based and immigration-status-based discrimination.

Correcting the gender wage gap in the United States will require a host of actions, including passing the Paycheck Fairness Act, which prohibits gender-based pay discrepancies and bans workplace policies that don’t allow employees to disclose their wages to each other. Common-sense immigration reform that includes a road map to citizenship would represent a significant step toward pay equity. As we move into the congressional debate on wage disparities and immigration reform, let us consider the women who are earning far less money than they deserve and remember that reform is not just about fixing a broken immigration system; it can also be a step toward gender equality.

Ann Garcia is a Policy Analyst for the Immigration Policy team at the Center for American Progress. Patrick Oakford is a Research Assistant in the Economic Policy department at the Center.

SOURCE: AP/Perry Baker

Macrina Castillo of Mexico is shown at her place of work, the Mundo de Musica Latina music store in Columbia, South Carolina, in 2005. Latina women currently earn significantly less pay than both Latino men and women overall.

Each year the United States commemorates Equal Pay Day to illustrate the gap between men’s and women’s wages. Data show that women still earn 77 cents to every dollar a man earns. This gender-based wage gap stubbornly remains despite the passage of the Equal Pay Act in 1963 and a variety of legislation prohibiting employment discrimination.

The wage gap is even greater for most women of color. For Latina women in particular, who only make 55 cents to every dollar earned by white men, pay equity is key to the economic advancement of their families and communities.

Below are 10 facts that demonstrate why pay equity is important for Latina women and their families.

1. $521: The median weekly earning for Latinas in 2012, compared to $710 for white women, $599 for black women, and $770 for Asian American women. Latinas will make 80 percent of the earnings of Latino men and 59 percent of the annual earnings of white men.

2. $29,020: The yearly earnings of the average Latina, compared to a median salary of $48,202 for all men. Research done by the National Partnership for Women and Families shows that a Latina woman working full time loses the equivalent of 154 weeks’ worth of food on average each year.

3. $9,605: The average annual Social Security payment received by Latina women 65 years of age and older in 2010, compared to an average $12,815 received by Latino men.

4. 40 percent: The share of all Latina-headed households living below the poverty level in 2010. In Latina-headed households with children under the age of 5, the percent living in poverty increases to more than 50 percent. With more than 2 million households in the United States currently headed by Latinas, pay equity is incredibly important.

5. 208,000: The number of Latina women who worked in jobs paying below the federal minimum wage in 2011, compared to 172,000 Latino men. Because many Latina women are tied to their immigration status, they are forced to accept almost any working terms in order to support their families such as long working hours, no benefits, and low pay. If the wage gap is closed, Latina women will have the opportunity to provide more for their families.

6. 11.8 percent: The Latina unemployment rate for 2011, compared to 7.5 percent for white women and 11.2 percent for Latino men. Latinas are an important part of the American workforce, representing 5.8 percent of the total worker population in the United States. Yet they have the lowest employment-to-population ratio in the nation at 52.7 percent.

7. One-third: The proportion of Latinas who are uninsured, compared to 16 percent of white women and 20 percent of African American women. This lack of health coverage explains why in 2010 more than 42 percent of Latinas did not make a single trip to a medical provider. Pay equity will help those without health insurance, afford medical providers.

8. 51 cents to 68 cents: The range that the average Latina is paid, compared to every dollar earned by the average man in the 20 states with the largest Latina populations working full time. These numbers illustrate that even in the states with the largest Latina populations, the wage gap is still significant, and in some cases, the wage gap is much larger than in states with smaller Latina populations. Closing the wage gap would affect millions of women in these states alone.

9. 42.3 percent: The share of Latinas that have access to a single paid sick day, compared to 60 percent of African Americans and white women. Access to parental leave among Latinos is the lowest of any racial group despite their being more likely to have young children in need of care or supervision. Lack of access to paid sick leave forces Latino families to make hard decisions such as the choice between losing pay and taking time off work to care for a sick child.

10. 61 percent: The share of all Latino-earned bachelor’s degrees earned by Latina women in the 2009–10 school year. Latina women also earn 62 percent of associate’s degrees, 64 percent of master’s degrees, and 53 percent of all first-professional degrees awarded to Latino students. Though Latinas are earning more degrees, it is still not enough to close the wage gap. Data show that female managers still earn just 81 percent of what male managers do, even after researchers controlled for age, education, hours worked beyond full time, sector, marital status, and the presence of children in the household.

As Latinas continue to comprise a growing share of our nation’s population, we must continue to push forward the importance of pay equity. Closing the wage gap will lead to fewer Latinas in poverty and more opportunities for both Latinas and their families. The challenges that Latina women face not only affect them but also affect our entire society, as their children attend our schools and they become the nation’s majority.

Jennifer Molina and Morriah Kaplan are interns with Progress 2050 at the Center for American Progress.

SOURCE: AP/ Kathy Willens

A waitress serves steamy containers of dim sum at the Golden Unicorn restaurant in Chinatown in New York. Asian American women earn significantly less than their male counterparts.

Each year the United States commemorates Equal Pay Day to illustrate the gap between men’s and women’s wages. Data show that women still earn 77 cents to every dollar a man earns. This gender-based wage gap stubbornly remains despite the passage of the Equal Pay Act in 1963 and a variety of legislation prohibiting employment discrimination.

The wage gap is even greater for most women of color including Asian American women. Asian American women make 87.6 percent of what the average man earns and 73 percent of what Asian American men make. Pay equity is therefore crucial to the economic advancement of Asian American women, as well as their families and communities.

Here are 10 numbers that demonstrate why pay equity is important for Asian American women and their families.

1. $770: The median weekly earnings for Asian American women in 2012. Asian American women might show the smallest gender gap, but it is growing. Asian American women’s earnings dropped from 86.6 percent of all men’s earnings in 2010 to 84.8 percent in 2011.

2. 48 percent: The share of Asian American women working in service and sales occupations, compared to about 1 in 10 Asian American men and a similar share of white men. These are generally low-paying jobs, as the median hourly wages in the service and sales industries are $10.02 and $12.06, respectively. This exacerbates the wage gap for Asian American women and highlights the need for pay equity.

3. 12.1 percent: The share of Asian American women living in poverty, compared to 7.7 percent of white men. In 2011 there were more than 1 million Asian American women living in poverty—an increase from less than 0.7 million in 1999. According to the American Community Survey, from 2002 to 2010 the number of Asian Americans living in poverty increased by 46 percent. Pay equity will help decrease the number of Asian American women living in poverty and will combat poverty in the community as a whole.

4. 21: The number of Asian American and Pacific Islander women who are officers of large corporations. This represents 0.3 percent of the total number of officers of large corporations. Men hold close to 85 percent of all board seats. Although Asian American women currently make up 57 percent of the labor force, Asian American and Pacific Islander women leaders are significantly underrepresented in the four major employment sectors—corporate, government, nonprofit, and education. This underrepresentation serves to widen the gender wage gap.

5. 60 percent: The share of Asian American women living in the United States who are immigrants. According to the U.S. Census Bureau, 40 percent of all Asian Americans speak English less than “very well,” and 1.2 million Asian Americans are undocumented. Although foreign-born women have similar educational attainment levels as U.S.-born women, foreign degrees and technical skills are often nontransferable due to language and cultural differences. This, combined with a lack of legal status, often results in women working low-wage laborious jobs.

6. 45.5 percent: The share of Asian American women who do not have access to paid sick leave from their jobs. The lack of paid leave creates barriers to taking care of sick children, as well as their own health, resulting in poorer health outcomes and higher health care costs. Access to paid leave is directly related to type of employment, as low-wage work typically offers fewer benefits and less flexibility, leaving these women especially susceptible to the economic challenges presented by low-wage work alongside little flexibility and minimal or no benefits.

7. 7.1 percent: The long-term unemployment rate of Asian Americans in 2010. As of March 2013 approximately 25,000 of the 166,000 unemployed Asian American women were looking for full-time jobs compared to the approximately 19,000 unemployed Asian American men looking for full-time jobs. The higher number of Asian American women seeking full-time jobs indicates that this group in particular faces greater issues of underemployment. By closing the wage gap, we can offset some of the wage inequities caused by underemployment.

8. $10,840 less: The annual wage disparity between Asian American women who held a bachelor’s degree and their Asian American male counterparts as of 2010. The disparity in earnings of Asian American women compared to white men is even greater at $11,354. This large disparity hinders Asian American women, who receive the same education as males and are unable to earn the same salary due to pay inequality.

9. 31 percent: The share of Asian American and Pacific Islander women raising children with a same-sex partner in California. Studies show that lesbian couples have a greater poverty rate than both different-sex couples and gay couples.

10. 20.6 percent: The percentage of Asian and Pacific Islander women who are uninsured. This is particularly harmful for Asian American women since, as a group, they have one of the highest risks of cancer. Additionally, many of them do not have access to health insurance since many Asian American women work in low-income jobs without health benefits.

Although the wage gap tends to be smaller for Asian American women than for other minority women, the numbers above show how they are still significantly impacted by pay inequity. Closing the wage gap will bring more Asian American women into leadership positions, give equal opportunity to immigrant women, and bring positive change to all of our communities.

Jennifer Molina and Morriah Kaplan are interns with Progress 2050 at the Center for American Progress.

SOURCE: AP/Steve Helber

Denise Armstrong helps her son Joseph, 13, with his schoolwork in a library in Richmond, Virginia.

Each year the United States commemorates Equal Pay Day to illustrate the gap between men’s and women’s wages. Data show that women still earn 77 cents to every dollar a man earns. This gender-based wage gap stubbornly remains despite the passage of the Equal Pay Act in 1963 and a variety of legislation prohibiting employment discrimination.

The wage gap is even greater for most women of color. For African American women in particular, who only make 69.5 percent of all men’s earnings, pay equity is incredibly important to their families and communities. Here are 10 numbers that demonstrate why pay equity matters to African American women and their families.

1. $599: The average weekly earnings of black women, compared to $854 for men of all races and ethnicities. African American women earn only 68.1 cents to every dollar white men earn.

2. 4 million: The number of households in the United States headed by African American women. Forty percent of all households headed by African American women live below the poverty line, and that number rises to 50 percent in households with children under the age of 5. Pay equity would provide countless resources for these women and their families.

3. 62 percent: The share of African American women who have little or no money left to save for retirement once they pay their bills, according to the Women’s Institute for a Secure Retirement. Not only does the wage gap limit the immediate resources that African American women could have access to such as food or gallons of gas, it also adds up over the years and means fewer savings for Social Security and pension.

4. 1 percent: The share of U.S. corporate officers—those who are in senior-level positions or those who are corporate board members—who were black women in 2011. Since female executives earn on average 42 percent less than men, and income is based on pay history, it becomes unlikely that the pay gap for a black woman will significantly close during her career, even if she does beat the odds and obtain a high-paying position.

5. $5: The median wealth for a single African American woman, compared to $42,600 for a white woman. This means that black women are missing out on opportunities to accumulate wealth, preventing opportunities for saving or investment or for educating their children. In fact, by 2007 the dollar amount of the racial pay gap was enough to pay full tuition at a four-year public university for two children, plus tuition at a public medical school.

6. 765,000: The number of jobs eliminated in state and local governments between 2007 and 2011 as a result of the Great Recession. Women and African Americans comprised about 70 percent and 20 percent of those losses, respectively. As effects of the sequestration—and lingering effects of the Great Recession—are felt and these jobs reduced further, employment for African American women is being put on the chopping block, without the employee benefits needed to create a safety net. African American women need the income that is rightfully theirs regardless of the circumstances, but this need is magnified when one considers that their jobs are oftentimes the first to go.

7. 42 percent: The share of African American women who are not able to earn paid sick days to recover from illnesses. For a two-parent family household, just 3.5 sick days without pay is equivalent to losing an entire month of groceries.

8. $10,000 less: The joint income of African American lesbian couples compared to black same-sex male couples. According to the 2010 census, African American gay* and transgender same-sex couples are more likely than their white counterparts to struggle economically, while they are twice as likely as white couples to be raising children—38 percent of African Americans.

9. 18.6 percent less: The earnings of Haitian women compared to U.S.-born white women. West Indian women and African women also earn less than their white counterparts—8.3 percent and 10.1 percent, respectively. Although immigrant women are key components of expanding a nation’s wealth, citizenship status sets black immigrant women back in terms of wages and benefits. Pay equity is necessary to bridge the gap not only between their female counterparts, but also between their earnings and those of all men.

10. 47.1 percent: The poverty rate for African American single mothers in 2010. This was significantly higher than the national poverty rate at that time of 15.1 percent. Approximately 50 percent of black children were part of families headed by single mothers in 2009. The wage gap limits the income single mothers have for themselves and their children, perpetuating their cycle of poverty.

It’s time for African American women to get what they have been working for in terms of pay equity. Factors such as job sector, sexual orientation, or citizenship status should not affect the level of earnings an African American woman receives. Pay equity is not only necessary to promote a just workforce in the long run, but it is also needed for the immediate benefit of the children and families of these hardworking women.

Sandra Shaker and Morriah Kaplan are interns with Progress 2050 at the Center for American Progress.

* In this column, “gay” is used as an umbrella term for those who identify as gay, lesbian, and bisexual.

SOURCE: iStockphoto

Poverty in the Native American community undoubtedly presents its women and families with a special set of obstacles.

Each year the United States commemorates Equal Pay Day to illustrate the gap between men’s and women’s wages. Data show that women still earn 77 cents to every dollar a man earns. This gender-based wage gap stubbornly remains despite the passage of the Equal Pay Act in 1963 and a variety of legislation prohibiting employment discrimination.

The wage gap is even greater for most women of color. For Native American women in particular—who only had a 45.9 percent employment rate in 2011 and whose communities consistently face high rates of poverty—pay equity is key for the economic advancement of their families and communities.

Here are 10 numbers that demonstrate why pay equity matters to Native American women and their families.

1. $32,062: The median income of American Indian and Alaska Native households, compared to $50,046 for the nation as a whole. Native American households are already earning less than the rest of the nation’s racial and ethnic groups, and women’s pay inequity further exacerbates this reality.

2. 27 percent: The national poverty rate for American Indians and Alaska Natives in 2011; this is the highest of all national poverty rates by race. Between 2007 and 2011 nine states had poverty rates of about 30 percent or more for Native Americans, and some states such as South Dakota and North Dakota had much higher rates—at 48.3 percent and 41.6 percent, respectively. Pay inequity for Native American women ensures that they will continue to top poverty rates in the future.

3. 371,085: The number of Native American women between the ages of 25 and 54 in the workforce, compared to 390,723 Native American men. Since fewer Native American women than men are employed, pay inequity contributes to the lower amount of earnings that may be available for these women and their families. Keeping full earnings from these women only augments the poverty rates in Native American communities.

4. 0.09 percent: The share of Native American women employed in the private sector as executive or senior-level officials and managers, compared to 0.19 percent of Native American men. In 2000 and again in 2005, the participation rate for Native American women as officials and managers in private industry was 0.1 percent. Meanwhile, Native American women are disproportionately represented among service workers and other generally low-paid positions, and still fall below their representation as officials and managers, professionals, craft workers, and operatives. Current trends suggest that Native American women will continue to be underemployed and underpaid where they are hired.

5. 21.4 percent: The share of Native American families maintained by a single female householder with no spouse present, according to the 2010 census, compared with about 9.2 percent of non-Hispanic white households. Single-parent Native American households have the highest poverty rates in the country. Withholding income from Native American women disadvantages them and their families, particularly when they are the sole breadwinners.

6. 22 percent: The share of Native American women ages 25 and older that graduated high school. About 14 percent of Native American women hold a bachelor’s degree or higher. Although the number of Native American students enrolled in colleges and universities has more than doubled in the past 30 years, the graduation rate for Native American women has grown only slightly, from 21.7 percent in 2004 to 23.9 percent in 2008. Low graduation rates hinder professional success in the future, and, when combined with pay inequity, will keep Native American women from accumulating wealth and achieving financial security.

7. 50 percent higher: The assault rates for women residing on Native American reservations compared to the next most-victimized demographic, African American males. Native American communities already face high poverty rates and 29.2 percent of Native Americans were without any form of health care coverage in 2010. Pay equity would help alleviate stress caused by poverty and help Native American women obtain the health care services they need.

8. 8.5 percent: The share of American Indian and Alaska Native youth struggling with alcohol-use disorders, compared to 5.8 percent of the general population. Poverty and reduced incomes keep Native American women from providing their children with the health care services they need.

9. 31 percent: The share of Native American children living in poverty, compared to 11 percent of non-Hispanic white children. As women of all races and ethnicities are often tasked with the responsibility of being the primary caretakers for their children, pay inequity not only leads to a worse standard of living for women, but also for their children as well. Poverty leads to various issues among Native American youth such as mental health disorders, alcohol-use disorders, victimization, gang involvement, and suicide.

10. 58 percent: The share of Native American grandparents living with their grandchildren and who are also responsible for their grandchildren’s care. Pay inequity for women makes it harder for grandmothers to support children under their care and simultaneously provide for their own retirement.

As we look at the different women of color affected by pay inequity, we should not forget about Native American women. Poverty in the Native American community undoubtedly presents its women and families with a special set of obstacles. As the fight to close the gender wage gap continues, it is imperative to pay attention to the needs of Native American women and their families and ensure that they truly have equal access to health care, education, and a respectable standard of living.

Sandra Shaker and Morriah Kaplan are interns with Progress 2050 at the Center for American Progress.

SOURCE: AP/Toby Talbot

People gather on the steps of the statehouse in Vermont for a rally on National Equal Pay Day. Recent surveys show that women earn more than men in only 7 out of 500 professions.

The median wage gap between genders fell since 2000, but progress is currently stalled. Women still earn less than men in nearly every occupation, though some suffer from greater wage disparities than others. The following is a list of the top 10 occupations with the largest and smallest gender wage gaps.

Of the 534 occupations listed by the Bureau of Labor Statistics, women earn more than men in exactly seven professions. Together, these seven occupations account for about 1.5 million working women, or about 3 percent of the full-time female labor force. The remaining 97 percent of full-time working women work in occupations where they earn less than their male counterparts.

The median weekly earnings for all full-time wage and salary workers in 2011 were $756. Both women and men in the 4 out of 10 jobs with the smallest wage gaps notably earn below this threshold. This indicates that jobs where women don’t experience a wage gap tend to be lower paying than the average. But in the 10 jobs with the worst gender wage gaps—where men earn significantly more than women—men’s average weekly earnings are always at or above the median. In these jobs, men are earning more than the average worker, but interestingly women’s wages fall below the national average of $756 in 4 of the 10 jobs noted above.

Education, success, and occupational prestige are not enough to protect women from the gender wage gap. While data show that American women are in more senior managerial professions than other OECD countries, these high-achieving women are still disadvantaged by an above-average wage gap. Managerial professionals, CEOs, and administrators all rank in the top 10 occupations in which women earn less than men.

So what does this list show? Even in the top 10 jobs with the smallest gender wage gaps, women make more than men in only seven professions. Additionally, it tops out with women earning a premium of 6.4 percent compared to their male counterparts, compared to a 39.4 percent gap in the top occupation where men earn more than women.

Let’s be clear: There should not be a gender wage gap in either direction. But a comparison of what that wage gap looks like in actual dollars per week shows that the situation is much more serious for women than for men. The 51,000 female operations research analysts earn $68 per week more than men. Compare this to the 745,000 male chief executives who earn an average of $658 more per week than similarly employed women.

We cannot attribute the wage gap to just one factor, which means that we need multiple strategies to eradicate it. The Lilly Ledbetter Fair Pay Act was an important first step but more needs to be done. Passing the Paycheck Fairness Act would prevent employers from firing workers who voluntarily talk about their salaries with co-workers, sanction employers who illegally commit wage discrimination, and provide funds for negotiation training for women and girls. It is also necessary to establish a National Equal Pay Enforcement Task Force that would bring together the Equal Employment Opportunity Commission, the Department of Justice, the Department of Labor, and the Office of Personnel Management to address barriers to pay equity and recommend steps that could be taken to address the issue.

Nancy Wu is an intern on the Economic Policy team at the Center for American Progress. Sarah Jane Glynn is a Senior Policy Analyst at the Center.

SOURCE: AP/Michael Dwyer

In this Monday, February 25, 2013, photo, Ann Oganesian, left, of Newton, Massachusetts, pauses as she speaks with a State Department employee about job opportunities with the federal government during a job fair in Boston.

This column was originally posted at MarketWatch.

Sequester spring is not starting out well.

In a reversal of recent trends, today’s new data from the U.S. Bureau of Labor Statistics show that employers have cut back sharply on hiring. Government cutbacks have already been slowing our nation’s economic growth and are now actively pulling employment downward, but the worst may be yet to come.

The sharp across-the-board cuts in government spending implemented March 1 are only beginning to show their ugly consequences. While it’s too early to know what the full impact will be on the unemployment rate, government spending cuts are already stealing wind from the sails of the recovery.

In March the U.S. economy only added 88,000 new jobs, but the unemployment rate ticked down slightly to 7.6 percent. The employment data for January and February were revised upward by a total of 61,000 jobs, and over the past three months, the economy has added an average of 168,000 jobs per month. At this rate, the United States will get back to full employment in 2020.

As jobs fail to appear fast enough to soak up all those who need a job, many people have given up searching for work. In March the labor force declined by about half a million people, and the labor-force participation rate decreased by 0.2 percentage points to 63.3 percent. Adult men’s labor-force participation (men ages 20 and over) was 72.7 percent in March, hitting the low of August 2012 and lower than any other month since 1948 at the end of World War II.

For those who continue looking for a job, the search remains an arduous process. Among those out of work and searching for a new job, 37.1 percent have been doing so for at least six months, and the typical unemployed worker takes 18.1 weeks to find a new job. When the unemployment rate was 4.6 percent in 2007, just before the start of the Great Recession, it took the typical unemployed worker only 8.5 weeks to find a new job.

Unemployment continues to be higher among those who are young, have less education, are veterans, or are nonwhite. In March the unemployment rate among teens was 24.2 percent, while it was 33.8 percent among African American teens and 28.1 percent among Hispanic teens.

Among those with only a high school diploma, the unemployment rate was 7.6 percent. African Americans and Hispanics had unemployment rates of 13.3 percent and 9.2 percent, respectively, while Iraq and Afghanistan veterans had an unemployment rate of 9.2 percent.

Housing hangover

The recovery in housing is also showing up in the labor market. Construction employment rose in March, adding 18,000 new jobs for a total of 162,000 over the past year. Alongside new homes, however, consumers should be out there buying new furniture, garden supplies, and appliances. But employment in retail sales is down in furniture (-1,800), building material and garden supply stores (-10,100), and electronics and appliances (-5,700).

One issue may be that too many new homes are actually being bought by investors and are not owner-occupied. Thus, even though housing is recovering, it isn’t (yet) leading the recovery in jobs as it has in so many prior recoveries.

Even though unemployment is stagnant, the low rate of inflation means that those with jobs are seeing a rise in their real take-home pay, although it’s a small one. Over the past three months, wages rose by an annualized quarterly rate of 2.3 percent, just above the rate of inflation as measured by the Consumer Price Index for All Urban Consumers, or CPI-U, which increased 2 percent over the past 12 months.

Based on Congressional Budget Office estimates, due to the combined effect of the payroll tax increase (800,000 fewer jobs in 2013) and sequestration (750,000 fewer jobs from March–December 2013), the U.S. economy will create 142,000 fewer jobs each month for the rest of the year. In January Congress allowed the payroll tax to revert to its usual level, eliminating the two-year tax holiday, and in March Congress allowed the so-called sequestration to occur, which will cost about 750,000 jobs over 10 months in 2013. Most of these jobs will be lost in the second and third quarters of this year, so we are only now beginning to see the effects. Without austerity, we might have seen a more robust number this month.

About five or six years ago, I had lunch with a good economist friend where we debated what the worst-case outcomes could be from the collapse of the housing bubble. My friend suggested that the worst that could happen would be an L-shaped recovery, one where employment didn’t grow enough to bring on full employment, but where employment grew just enough that policymakers could breathe a sigh of relief that things weren’t actually moving in the wrong direction. For years now, I have hoped that the lunchtime conversation wouldn’t be so prescient. With the sequester’s impacts yet to be felt, however, I wonder if we weren’t too optimistic.

Heather Boushey is Chief Economist at the Center for American Progress.