In the United States, women, especially women of color, earn less on average than their male peers. The wage gap between men and women persists at every income level, education level, and most occupations. It’s driven by overall wage inequality and societal expectations and, for women of color, it’s exacerbated by systemic racism. In order to improve women’s economic power and protect their own and their families’ prospects in the wake of COVID-19, I recommend that Congress increase the federal minimum wage and implement the Child Care for Working Families Act.
The Gender Wage Gap: Its Causes and Effects
On average, women’s hourly wages are just 82.9 percent of a man’s. This gap persists regardless of a woman’s income, level of education, or occupation. The Economic Policy Institute estimates that 16 percent of this gap is explained by gender disparity, 49.1 percent is attributed to the growing disparity between economic productivity and wages, and the rest is the result of the interaction between these two phenomena. Since women comprise the majority of workers in low-wage occupations, the rising gap between productivity and wages has harmed them the most. Disappointingly, this rise in overall inequality has been the primary mechanism behind the gender wage gap’s reduction over the past few decades as men’s wages have fallen to meet women’s. Had the median wage grown at the same rate as economic productivity and the gender wage gap had been closed, women’s wages would be 71.2 percent higher today.
The wage gap has devastating economic consequences for women. Women, especially women of color, are much more likely to be impoverished than men. Further, families headed by single mothers are much more likely than those headed by single fathers or married couples to be in poverty (34 percent versus 16 percent and 6 percent respectively). Beyond struggling to cover everyday expenses, lower wages mean women accumulate less wealth and have lower savings than men making shocks like unemployment, medical bills, and other unexpected expenses much more damaging to women and their families.
Moving up the ladder and securing a higher-paying job does not shield women from all of the disparities and difficulties lower-income women face. High-achieving women often find new barriers to overcome as their careers mature. The intersecting expectations that women take on a disproportionate share of household and child-rearing responsibilities and the irregular and long hours that come with professional jobs can leave many women, especially mothers, in career limbo. Nowhere is this dynamic more obvious than that wage gaps are the most prominent between men and women when women reach the age where many start families (35 to 45 years old). In this age group, men earn 15 percent more than women on average. Since the United States lacks friendly work-family policies like adequate childcare funding and paid leave programs, American women face a far thicker glass ceiling than women in many other developed countries.
Women of Color and Economic Inequality
Combined, the wage gap and glass ceiling significantly suppress the economic potential of all women. However, women of color face far more dire situations due to the intersectionality of their identities as both women and minorities. While the overall gender wage gap is around 80 cents to the dollar, Black women earn 65.1 cents, and Hispanic women earn 58.9 cents to every dollar earned by a white man. The root of the disparity between a white man’s wages and a woman of color’s is systemic racism.
Black women work more hours than white women, but their wage gap relative to white men has grown, not closed, over the past few decades. Further, Black and Hispanic women make up a disproportionate share of employees in low-wage jobs. Although there is a higher proportion of Black women with degrees and high-powered jobs than ever before, evidence has shown that as Black women move up in their careers, the wage gap between themselves and white men only grows. For example, white male physicians earn, on average, $18 more per hour than Black women doing the same job. Since Black women play a vital role in the economic well-being of their families, this earnings gap affects more than just themselves.
The Added Burden of COVID-19
COVID-19 has exacerbated these economic inequalities. Since women make up a disproportionate share of low- and minimum-wage workers, they are the majority of workers on the frontline. Black women are especially overrepresented in frontline positions like health care, childcare, food service, and retail. Not only does this put them at higher risk of contracting the virus, it also makes them more susceptible to job loss as these businesses have closed or have been ordered to cease operations across the country. Many women are also dependent on childcare providers so they can do their jobs. As these services shut their doors, many women bear the brunt of caregiving for their children leading many to reduce hours or quit their jobs entirely. As a result, millions of women and their families are facing poverty. Significant policy changes will be needed to help women recover and re-enter the job force.
Recommendations for Pursuing Economic Equality
The following recommendations aim to improve women’s economic well-being by promoting policies that will help all workers impacted by unfair employment practices. Systemic income inequality, the undervaluing of female labor, and the dual demands of being a working mother all contribute to the gender wage gap. The wage gap is driven by systemic income inequality, the undervaluing of female labor, and the dual demands of being a working mother. By addressing these mechanisms, women will have more freedom to realize their full economic potential.
Congress should raise the minimum wage to $15 an hour. The Raise the Wage Act of 2021 would gradually raise the federal minimum wage to $15 over the next four years. 21 states still use the federal minimum wage of $7.25 as their standard and only nine states are on track to establishing a $15 minimum wage. Increasing the minimum wage not only addresses wage stagnation and rising inequality but lifts all boats while significantly improving economic outcomes for women who make up a majority of low-wage earners. If the federal minimum wage were increased, it would boost the wages of over 35 million workers (55.9 percent of which are women). 37.1 percent of women of color would see a bigger paycheck, as well as 27.3 percent of working mothers and 39.6 percent of single mothers. Beyond increasing earnings, women would be better able to accumulate wealth that can be passed down to future generations and shield themselves and their families from unexpected financial shocks.
Congress should pass the Child Care for Working Families Act. This legislation aims to enact structural reforms to limit childcare costs, increase childcare assistance to low-income families, and ensure access to a variety of care options. Access to affordable, high-quality childcare reduces the glass ceiling effect by providing women with the flexibility they need to pursue their career goals. In Washington, D.C., where preschool has been made universal, the maternal labor force participation has increased by ten percentage points for both low- and high-income families. This case shows how, when women have access to childcare, their economic potential is greatly enhanced.
The gender wage gap and glass ceiling, driven by gender bias and overall rising inequality in the United States, puts a limit on women’s economic potential. Since women of color are members of two oppressed groups, their situation is even more dire. When sexism suppresses women’s economic potential, women and their families suffer the consequences. COVID-19 has further exposed these structural inequalities and made women even worse off, creating more demand than ever to respond to this issue. A $15 minimum wage and the Child Care for Working Families Act will lift up all Americans by delivering women the resources they need to achieve their full economic potential.
Serena Gillian graduated in May of 2021 with a Master of Science in Public Policy and Management from the Heinz School of Information Systems and Public Policy. She has a keen interest in equity in all areas of public life from voting to health with a focus on marginalized groups. Post-graduation,she will be working with the Allegheny County Department of Human Services as a data analyst in their Analytics, Technology, and Planning division. There she will be working to address issues that affect the area’s youth.