Raising the Minimum Wage Would Be Transformative for Women

A woman wears a mask and gloves as she works as a cashier at a supermarket in Miami, April 2020.

In the midst of a devastating pandemic and a recession that has disproportionately harmed women, the urgency for raising workers’ wages and ensuring their economic security has never been clearer. Raising the federal minimum wage would benefit workers in low-wage and essential jobs across the country. This is especially true for women—particularly women of color—who are concentrated in jobs, such as cashiers and child care, that pay at or a few dollars above the federal minimum wage.

Currently, the federal minimum wage stands at just $7.25 per hour, and for tipped workers, the subminimum wage standard is an unconscionable $2.13 per hour. Making matters worse, the minimum wage has not budged since 2009, while costs have continued to rise, meaning that those working a minimum wage job today have less money than they did more than a decade ago to support their families and pay for basic necessities.

Fortunately, Congress is now considering the Raise the Wage Act of 2021, which would gradually raise the federal minimum wage to $15 an hour by 2025 and phase out the subminimum wage for people who work for tips as well as people with disabilities. This column explains how raising the minimum wage would significantly benefit working women and their families, helping to ensure their recovery in the current recession and their economic security in the long term.

19 million women would benefit from the Raise the Wage Act

The Raise the Wage Act would raise wages for nearly 32 million workers, according to analysis by the Economic Policy Institute (EPI) and the National Employment Law Project (NELP). The majority of workers who would benefit are women—59 percent, or nearly 19 million. In total, more than 1 in 4 working women, both those working full and part time, would see a raise.

Women of color in particular would see substantial benefits, as many are segregated into low-wage jobs. Nearly a quarter—23 percent—of all workers who would see a raise are Black women or Latinas, an overrepresentation of their share of the U.S. workforce in 2020. (see Figure 1) This includes 3.4 million Black women and 4 million Latinas.

Figure 1

Raising the minimum wage adds up to thousands more dollars for individual women every year. According to new analysis by the EPI and NELP, women working year-round, on average, would see an increase of about $3,500 in wages annually; and for Black women and Latinas, this figure increases to $3,700. This translates to a total wage increase of $66 billion for women working year-round.

For mothers in particular, raising the federal minimum wage would increase their wages and allow them to better support their families. Original Center for American Progress analysis of 2019 data finds that, among mothers who would get a raise with a minimum wage increase, 65 percent are primary or sole breadwinners for their families. And an additional 19 percent of mothers who would benefit are co-breadwinners, earning at least 25 percent of their total household earnings. The EPI estimates that raising the minimum wage would lift wages for nearly 8 million mothers.

Women working in essential jobs deserve a raise

Another group that would particularly benefit from raising the minimum wage is essential workers. New CAP analysis finds that the majority—58 percent—of essential workers making an hourly wage under $15 are women. (see Figure 2) Essential workers are disproportionately women, people of color, and women of color most of all. Women essential workers make up nearly a quarter—23 percent—of all workers making under $15 an hour. And of the more than 7 million women essential workers who would experience a raise from the Raise the Wage Act, half are women of color. However, these numbers are likely underestimates; they do not include the many child care workers, teachers, and others who have been deemed essential by states and localities but largely been excluded from federal guidance surrounding “essential workers.”

Figure 2

Essential workers, from nursing assistants to grocery clerks, have kept communities running in the midst of a global pandemic that has lasted nearly a year, in many cases while earning low wages, facing an increased risk of contracting the coronavirus, and experiencing increased mental health distress. As economist Rhonda V. Sharpe has aptly pointed out, the title of “essential worker” is a misnomer in terms of how the country actually treats workers: It is the work that is considered essential, but the worker—who is often underpaid and inadequately protected on the job—is effectively treated as expendable. Efforts to support low-wage essential workers beyond a national rhetoric that glorifies their “sacrifices” have hardly been enough; hazard pay initiatives have largely been temporary and at the discretion of employers, workers who rely on tips have reported large decreases in income as the pandemic stretches on, and research suggests that workers in essential industries are more likely to die from COVID-19. To value workers means to treat them with dignity, to guarantee them a safe and healthy workplace, and, importantly, to pay them higher wages. Raising the minimum wage is a vital step to truly create that reality for all, including those deemed “essential,” who make up a majority of those who would benefit from the Raise the Wage Act.

Women make up more than two-thirds of tipped workers, who also deserve a higher minimum wage

The Raise the Wage Act would also phase out the $2.13 tipped minimum wage by incrementally raising it to equal the proposed federal minimum wage of $15 per hour, a change that would disproportionately benefit women, who represent more than two-thirds of tipped workers. During the pandemic, many tipped workers have lost their jobs; however, they are often unable to obtain unemployment benefits or are uncertain if they qualify. Even among tipped workers, there are greater racial disparities due to a legacy of racism and sexism that has shut them out of federal labor protections. Tipped Hispanic female or Latina workers make 30 percent less than tipped white, non-Hispanic men and 23 percent less than tipped white, non-Hispanic women.

For tipped workers still on the job, high customer interaction puts them at risk of contracting COVID-19 and infecting their families. Moreover, women in tipped occupations often report experiencing sexual harassment in the workplace, an issue that has persisted during the pandemic. And while federal law requires employers to pay the difference if a tipped worker’s earnings do not meet the standard minimum wage, this rarely happens and is nearly impossible to enforce.

Raising the minimum wage and eliminating the subminimum wage for tipped workers would have a significant positive impact for Black women and Latinas in particular: 34 percent of Black working women and 31 percent of Latinx working women would get a raise, according to analysis by the EPI and NELP. Additionally, eliminating the subminimum wage for people with disabilities would be crucial to helping an estimated 420,000 workers with disabilities who are paid an average of $2.15 an hour.

Raising women’s wages would narrow the gender wage gap and wealth gap

Increasing millions of women’s wages by raising the minimum wage would also help narrow the persistent gender wage gap, which is driven in part by women’s concentration in tipped and low-paying jobs. In 2019, women working full time, year-round earned, on average, 82 cents for every dollar earned by their male counterparts. And this gap was much wider for most women of color: For every dollar earned by white, non-Hispanic men, Black women earned 63 cents, Native women earned 60 cents, Latinas earned 55 cents, and Asian American and Pacific Islander (AAPI) women earned 85 cents, with significant disparities by AAPI subpopulations. Eliminating the subminimum wage for tipped workers in particular could have a big impact on narrowing the gender wage gap. An analysis by the National Women’s Law Center found that in states that require employers to pay tipped workers at least the regular minimum wage before tips, the gender wage gap is one-third smaller than it is in states that rely on the $2.13 tipped minimum wage.

The gender wage gap compounds over time: Over the course of a 40-year career, women earn about $400,000 less than men due to the gender wage gap. The effect is even greater for Black women, Hispanic women, and Native American women. Raising the minimum wage would help not only to narrow the gender wage gap but also to reduce gender and racial disparities in wealth. With more take-home pay, workers are better able to both make ends meet in the short term and to increase financial reserves and savings for long-term wealth-building.

Women are overrepresented in low-wage occupations that would see a raise

Millions of women work in low-wage occupations and would see their wages increase under a $15 minimum wage. Women make up nearly two-thirds of workers in low-wage jobs. Black women and Latinas in particular are significantly overrepresented in the low-wage workforce compared with their share of the overall workforce: Latinas make up 16 percent and Black women make up 10 percent of workers in the 40 lowest-paying jobs.

In addition, many of the top occupations for women pay a median hourly wage below $15, and women in those jobs would see significant raises under the Raise the Wage Act. (see Figure 3) For example, nearly 2 million women are employed as cashiers, where the median hourly wage in 2019 was only $11.37. Meanwhile, child care workers—95 percent of whom are women and 40 percent of whom are women of color—provide essential supports to working parents but earn a median hourly wage of only $11.65. Half of child care workers would benefit from raising the minimum wage to $15 an hour, according to analysis by EPI and NELP. When accompanied by a significant ongoing investment in child care affordability, properly valuing the work of early educators will lead to a more equitable child care system for both parents and providers.

Figure 3

Conclusion

To boost the economic recovery, it is essential to get money into the hands of those who make spending decisions for their families, those who are breadwinners, and those who are likely to spend every additional dollar out of necessity. Women are the common denominator, and those working in minimum wage and tipped occupations need and deserve a raise. Raising the minimum wage is essential to helping women and their families make ends meet and weather financial crises such as the current recession. Better wages would also help to insulate workers, particularly those in tipped occupations, from pervasive sexual harassment and wage theft. Raising the minimum wage, coupled with other robust measures such as vigorous enforcement of workplace protections, is a key policy solution to lifting women and families out of poverty and helping to narrow the stubborn gender wage gap. Pandemic or not, women need their compensation to reflect the inherent value of their work. To these ends, raising the minimum wage is essential.

Diana Boesch is a policy analyst for women’s economic security with the Women’s Initiative at the Center for American Progress. Robin Bleiweis is a research associate for women’s economic security with the Women’s Initiative at the Center. Areeba Haider is a research associate for the Poverty to Prosperity Program at the Center.

The authors would like to thank Lorena Roque, Lily Roberts, Sarah Jane Glynn, Shilpa Phadke, Jocelyn Frye, and Rasheed Malik for their contributions to this column.