Equal Pay for Women and a Higher Minimum Wage Will Move the Economy Forward

by Heidi Hartmann

This post originally appeared on Working Economics, the blog of the Economic Policy Institute.

Heidi Hartmann,Yesterday morning, I had the honor of participating in a Democratic Steering and Policy Committee hearing, hosted by Leader Nancy Pelosi, in the Cannon House Office Building. Appearing with Lilly Ledbetter—whose story of pay discrimination went all the way to the Supreme Court and ultimately resulted in new legislation in 2009 named after her—and Laura Miu, a psychological counselor, who recently experienced pay discrimination, I was able to share recent research by the Institute for Women’s Policy Research (IWPR), which I lead, and by the Economic Policy Institute (EPI), the think tank that provides the last word on virtually all topics related to American workers. The briefing attracted 20 members of Congress, including Representatives Rosa DeLauro and Robert Andrews, who co-chair the Steering and Policy Committee, and Representatives Donna Edwards and Doris Matsui, who chair and vice-chair, respectively, the Democratic Women’s Working Group. IWPR’s research was originally released in January when it appeared in the latest Shriver Report, A Woman’s Nation Pushes Back from the Brink, produced in partnership with the Center for American Progress. EPI’s research was published as an update in December 2013 of an earlier paper last spring that details the impact of an increase in the minimum wage to $10.10 per hour.

The economic progress women have made in the past five decades is enormous. Women have entered many occupations that had been virtually closed to them, now earn more over their lifetimes, and contribute more to family income and to the economy as a whole than ever before.

But there is still a long way to go. Despite the passage of the Lilly Ledbetter Fair Pay Act of 2009, which makes it easier for women to sue for equal pay—avoiding a similar plight as the bill’s namesake, when she learned she was earning vastly unequal pay near the end of her career—progress toward closing the pay gap has stagnated. Since 2000, the wage ratio has remained around 76.5 percent. If trends of the past five decades are projected forward, it will take almost another five decades—until 2058—for women to reach pay equity.

Our researchers at the Institute for Women’s Policy Research have shown that if women received pay equal to comparable men, the poverty rate of all working women and their families would fall by half, from 8.1 percent to 3.9 percent. The number of women affected is substantial: 42.5 million working women—about 60 percent of all working women—would receive a pay increase, with the average annual pay increase estimated at $6,251 (including $0 amounts for those who got no raise). Moreover, paying women the same as comparable men would have added an additional $448 billion (equivalent to almost 3 percent of GDP) to the economy in 2012, about the equivalent of adding another state the size of Virginia to the nation.

Raising the minimum wage has been estimated to have a similarly dramatic effect on growing the economy and reducing poverty, especially among women. In a recent research paper, David Cooper at EPI calculates that 27.8 million workers—nearly a fifth of working Americans—would be directly and indirectly affected by an increase in the federal minimum wage to $10.10 per hour, across the three years 2014 -2016. These pay increases, Cooper estimated, would result in the GDP increasing by 0.3 percent ($22 billion). Moreover, 85,000 new jobs would be created by the additional spending power of low-wage workers.

Cooper shows that women would constitute 55 percent of the workers affected directly and indirectly by the increase in the federal minimum wage to $10.10 per hour: 15.3 million women would receive a pay increase. The typical minimum wage worker is 35 years of age and provides half her or his family income. Nearly one-fifth of American children have at least one parent whose earnings would be raised by an increase in the federal minimum wage to $10.10 per hour. Moreover, unpublished EPI data shows that 2.3 million single mothers, or nearly one-third of all working single mothers, would be directly and indirectly affected by the increase in the federal minimum wage.

The members present at the hearing were eager to hear about the importance of eliminating the gender pay gap and increasing the minimum wage, but they were also intensely interested in the issue of pay secrecy. Lilly Ledbetter explained that she had been told when hired that if she so much as discussed her pay with anyone she would be immediately let go. The members wanted to know how many other people might be affected by pay secrecy. A survey conducted by IWPR in 2010 was the first and (so far as we know), the only survey to look into pay secrecy. The survey found that, like Ledbetter, many workers do not know what their colleagues are being paid and are unlikely to be able to find out. More than 60 percent (62 percent of women, 60 percent of men) of private-sector workers responded that discussing pay at work is either strongly discouraged or prohibited.  By contrast, only 18 percent of female public-sector workers and 11 percent of male public-sector workers reported being discouraged from discussing pay rates or fearing penalties for doing so, and the gender wage gap is much smaller in the public-sector than in the private-sector.

Public policies can combat both unequal pay and low minimum wages. More than half of the states have made pay adjustments in their civil service systems that raise the pay of female-dominated jobs. Firms that contract with local and state governments and the federal government to provide goods and services can be required to meet standards, such as non-retaliation toward workers who share pay information or a higher minimum wage (as President Obama said in the State of the Union speech that he would require of federal contractors), or report their gender wage ratios within job categories, as has been done in New Mexico for state contractors.

The stall in the economic progress of women in the past decade, coupled with the large number of women and families who would benefit from increases in women’s earnings resulting from stronger equal pay remedies and a higher federal minimum wage, make the case that implementing new laws and public policies is urgent. Paying women equally and raising the minimum wage would significantly reduce poverty and boost the growth of the U.S. economy.

Heidi Hartmann, Ph.D., is the president and founder of the Institute for Women’s Policy Research.


To view more of IWPR’s research, visit IWPR.org

IWPR Board Member Spotlight: William Rodgers, III

by Caroline Dobuzinskis, former IWPR Communications Manager, and
Mallory Mpare

In MWilliam Rodgers III-headshotay of 2013, William Rodgers, III, joined IWPR’s board of directors, bringing with him experience in academia, government, and public service. Rodgers is currently Professor of Public Policy and Chief Economist at the Heldrich Center for Workforce Development at Rutgers University. He holds a BA from Dartmouth College, MAs from the University of California—Santa Barbara and Harvard University, and a Ph.D. in economics from Harvard University.

From 2000–2001, Rodgers served as U.S. Labor Secretary Alexis Herman’s chief economist and at the start of President Barack Obama’s first term, served on the Labor Department’s transition team. He was elected to the National Academy of Social Insurance in 2006 and serves as Vice President of the United Way Worldwide’s U.S. Board of Trustees.

Rodgers has known of IWPR’s work for a number of years and was originally introduced to the Institute through his work on racial inequality. “I was really intrigued by IWPR’s work and there are aspects of my research that have always dealt with integrating gender,” said Rodgers.

Rodgers describes his personal mission as “empowering people through economics.” This aligns well with IWPR’s effort to inform policy, inspire change, and improve lives through sound research that supports better policies for women and families.

When Rodgers joined the faculty at William and Mary College in 1993, he put this mission into action, by assisting a grassroots campaign calling for the landscapers and gardeners employed at the college to be paid livable wages. Rodgers built an economic and business case for why the wages should be increased, comparing the school’s salary structure to the local salary structure. His work moved both the school’s president and provost to join the campaign, and salary adjustments were eventually made.

“That piece of research probably impacted [many] workers,” said Rodgers. “People had felt invisible. That was the worst. The low pay was bad but the worst insult was being invisible.” Rodgers’ own interactions with the workers showed him why the change was important and he considers his role in increasing wages one of his most memorable accomplishments.

“My mom—and Secretary Herman, when I worked at Labor—instilled in me that all work has value and that there are people and families behind the numbers.”

As a professor, Rodgers aims to teach his students both “content and confidence,” recognizing that many have to work full- or part-time while studying, perhaps keeping them from a full academic experience. In addition, Rodgers also encourages confidence in young people on the playing field as coach of a youth soccer team. He holds the third highest soccer license available in the European system and coaches a team in New Jersey. He also enjoys running and volunteering in his community.

In the future, he would like to work on research to help all American households and families to have a balance of family time and work. He sees secure retirement as a future policy priority. “For me now the big issue that I am seeing, and it’s only going to grow, is ‘how do we provide a secure retirement to our parents and to our grandparents?’ and that translates into economic security for ourselves.”

IWPR is proud to have Rodgers serving on its board of directors.


To view more of IWPR’s research, visit IWPR.org

IWPR President’s Message: Reflecting on 2013, Looking Ahead to 2014

by Heidi Hartmann, Ph.D.

This message originally appeared in IWPR’s Fall 2013-Winter 2014 newsletter. For an archive of IWPR’s newsletters, visit the Newsletter section of IWPR’s website.

Image
IWPR President Heidi Hartmann

The lessons learned from IWPR’s 25th anniversary event in May have continued to echo in our offices and I hope in yours as well.  New cracks in the glass ceiling for women appeared this year and should be celebrated, but many gaps remain to be closed.  IWPR’s 25th anniversary event provided some perspective on the ways women’s and men’s lives have changed, the areas where women have advanced, and the areas where we have not.  It was also most gratifying to hear speaker after speaker at the event talk about the contributions IWPR’s work has made across the years in achieving policies such as the Family and Medical Leave Act and the Lily Ledbetter Fair Pay Act on the national level, and paid sick days for workers in cities and states across the country.

This year brought many women leaders into the spotlight.  Most recently, Mary Barra was named the next CEO of General Motors, the first woman to head a major automobile manufacturer in the United States or anywhere in the world.  But perhaps the most important first for me as an economist—and as a woman in a male-dominated field—is the confirmation of President Obama’s choice for Chair of the Board of Governors of the Federal Reserve System, Janet Yellen.  She will be the first female head of a central bank of any major industrial nation.

While there was ample media discussion of a “gender battle” for several months leading up to Prof. Larry Summers’ withdrawal from consideration and Yellen’s nomination, it seemed to me to be a case of her qualifications trumping considerations of gender, as she emerged as the most qualified individual for the position.  Her confirmation hearing was portrayed as “smooth sailing” in the media; the donnybrook some were anticipating simply didn’t happen. I like to think that the letter that I circulated with Prof. Joyce Jacobsen of Wesleyan University, and which was signed by 505 U.S. economists—men and women alike—urging President Obama to nominate Yellen, contributed to that outcome.

Despite these exciting firsts, there are still many ways in which women’s progress has lagged.  After substantially narrowing in the 1970s and 1980s, the gender wage gap in the United States has remained stuck at 23 percent for more than a decade.  Women’s progress in getting into non-traditional jobs has also slowed, coming to a virtual standstill. Taken together, this means that many women are concentrated in female-dominated jobs and are still being paid less than men. Too few women are cracking the glass ceiling in STEM fields, a growing area of the economy that is expected to provide good, high-paying jobs in the coming decades. Many “women’s jobs” center on caregiving work, an occupation that is also projected to grow as more careworkers are needed.  That demand could fuel much needed increases in benefits and wages for work that is surely not paid what it is worth.

Hence, we have much to do at IWPR in our next 25 years and I hope you will continue to support our work.  IWPR frequently breaks new ground in identifying overlooked areas and exposing them to light: the role of women immigrants in caregiving and the barriers they face; men’s roles in both family and market-based caregiving; women’s roles in environmental, economic, and political leadership; the need for increased educational opportunities for students who are parents, the vast majority of whom are single mothers; and challenges to women everywhere in achieving basic safety and healthcare.

These are the issues that will shape the future status of women, and IWPR’s research will be there to ensure that policy change is informed by credible research.


To view more of IWPR’s research, visit IWPR.org