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Families Can’t Afford the Gender Wage Gap

Equal Pay Day 2010

SOURCE: AP/Charles Rex Arbogast

Michelle Ramirez picks her children up at a day care center in Chicago where she is a single mother and works as a receptionist to support her two children.

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Interactive Map: The Persistent Career Wage Gap

Interactive Map: Women Provide for Their Families

Download memo with additional data (pdf)

It’s no longer breaking news this Equal Pay Day that women are a crucial part of today’s workforce. Women edged up to just 50 percent of workers on U.S. payrolls for the first time in October 2009, and two-thirds of American families with children now rely on a woman’s earnings for a significant portion of their family’s income. The Shriver Report: A Woman’s Nation Changes Everything, which we released last fall, identified areas where American institutions have and haven’t caught up with the realities of today’s workforce. Chief among the shortcomings is the fact that a gender pay gap persists almost 50 years after the passage of the Equal Pay Act.

The gender pay gap has taken on added importance as men have been more likely than women to lose jobs during the Great Recession. This loss of a man’s paycheck means that millions of families now rely on a woman’s job to make ends meet. The persistent gender pay gap is adding insult to injury for families already hit hard by unemployment.

Our newly analyzed state-by-state data demonstrate that mothers in every state and the District of Columbia are financially supporting their families—and many are their family’s primary breadwinner. Women’s earnings are critical to their families’ financial stability. Yet they continue to face a career wage gap that sets them back hundreds of thousands of dollars throughout their lives. Women face this gap regardless of their education, occupation, or where they live.

Congress took an important step in the fight for equal pay last year by passing the Lilly Ledbetter Fair Pay Act, but it has sidelined two pieces of legislation that also directly address the underlying causes of the gender pay gap. The Paycheck Fairness Act would amend portions of the Equal Pay Act to provide stronger enforcement of prohibitions against wage discrimination. The Fair Pay Act would require employers to provide equal pay for jobs that are comparable in skill, effort, responsibility, and working conditions.

It’s time for government and businesses to make good on their commitments to American families by taking concrete steps to eliminate the gender wage gap.

Families rely on women’s earnings

More than 12 million families with children rely primarily on women’s earnings. More than a third of mothers in working families in every state but Wyoming and Utah are the family’s primary breadwinner—these women provide at least half of a couple’s earnings or are single working mothers. The District of Columbia has the highest share of breadwinner mothers, with 63.8 percent of mothers in working families bringing home at least half of their family’s earnings.

More than 19 million families with children have a mother that is a breadwinner or co-breadwinner bringing home at least a quarter of the family’s earnings. More than half of mothers in almost every state play this role. Utah is the only exception, with 46 percent of mothers as breadwinners or co-breadwinners. But this still means that 4 in10 working families with children in Utah rely on a mother’s earnings.

More than 6 in 10 families with children in 42 states rely on a woman to serve as breadwinner or co-breadwinner. These states are mostly in the eastern half of the country. The District of Columbia again leads the pack with 77.9 percent of mothers acting as their family’s breadwinner or co-breadwinner.

A career wage gap

Even though women are significant contributors to their family’s economic well-being, they continue to earn less than their male colleagues. Full-time, full-year working women still earn only 77 cents for every dollar that men earn. This wage gap is even larger for women of color. African-American women earn 61 cents and Latinas earn 52 cents for every dollar a white non-Hispanic man earns.

And this inequity accumulates over a lifetime into a shockingly high career wage gap. The career gap lowers women’s earnings over a lifetime and reduces their long-term assets and that of their families. The typical woman loses $431,000 in pay over a 40-year career. But the gap is higher in some states than others. The career wage gap is at least $300,000 in 12 states, $400,000 in 23 states, $500,000 in 10 states, and exceeds $600,000 for women living in Wyoming and Alaska.

Education is clearly a route to higher earnings, but getting a degree does not necessarily lead to fair pay over a lifetime of work. The career gap for women with less than a high school education is about $300,000 and more than double that at $723,000 for women with a bachelor’s degree or higher. In the 42 states where data is available, the career wage gap for women with at least a bachelor’s degree was more than $500,000 in six states, more than $600,000 in 17 states and the District of Columbia, at least $700,000 in 13 states, and exceeds $800,000 in two states. The highest career wage gap for college-educated women is for those who live in Virginia, who lose more than $1 million over a 40-year career.

The career wage gaps are largest for women working in management and finance, sales, and professional occupations. Women working in Connecticut in management and finance jobs face $969,000 in lost earnings throughout their career. And Virginia is home to two of the highest career wage gaps for women in specific job categories—$774,000 for women in sales and $999,000 for women in professional occupations. The smallest career wage gap is for women working as office support staff in California, who lose $134,000 over a career, women in service jobs in Nevada who lose $216,000, and women in production in Tennessee who lose $358,000.

Next steps for equal pay

The House passed the Paycheck Fairness Act last year, but no action occurred in the Senate until a March 2010 hearing before the Senate Committee on Health, Education, Labor, and Pensions. Nearly all of the committee’s senators attended the hearing, which suggests it could become a priority in the months ahead. President Obama was a co-sponsor of the Paycheck Fairness Act when he was in the Senate, and we now need his leadership to push for progress on this vital issue for working families, especially since so many families have been hard hit by the economic downturn.

Congress should move forward with the Paycheck Fairness Act and the Fair Pay Act, and businesses should review their compensation schemes to ensure pay equity for every one of their employees. America’s working families cannot afford to wait any longer for a fair day’s pay.

Data and methodology

Wage data in this column comes from the American Community Survey, using the Integrated Public Use Microdata Series from the Minnesota Population Center and analyzed by Jeff Chapman.

The data for analysis of the career wage gap is limited to women and men between the ages of 25 and 64 who worked 50 to 52 weeks during 2008 and typically worked 35 or more hours per week. Workers are divided into 5- and 10-year age groups: 25- to 29-year-olds, 30- to 34-year-olds, and so on. Median wages are calculated separately for women and men within each age group. The wage gap is calculated by subtracting the male median wage from the female median wage. We sum the gap across age groups to illustrate the lifetime wage gap given today’s wage difference. Data are not presented where insufficient samples sizes do not allow for meaningful calculation of medians. The wage gap presented here is not necessarily representative of a typical woman’s experience, but it is an illustration of the scope of the problem.

Occupational categories follow the Standard Occupation Classification—which the Bureau of Labor Statistics and the Census Bureau use to classify occupations—and are then combined into broad groups. An occupation is classified by the type of work performed and many occupations are found in multiple industries. More information on the classification can be found at http://www.bls.gov/soc/.

Breadwinner mothers include single mothers who work and married mothers who earn as much or more than their husbands. Co-breadwinners include all breadwinners as well as wives who bring home at least 25 percent of the couple’s earnings, but less than half. This analysis only includes families with at least one worker and with children under age 18 living in the home.

Interactive Map: The Persistent Career Wage Gap

Interactive Map: Women Provide for Their Families

Download memo with additional data (pdf)

Heather Boushey is Senior Economist, Jessica Arons is Director of the Women’s Health and Rights Program, and Lauren Smith is a Research Assistant at the Center for American Progress.

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