5 Things to Know in Advance of Tonight’s Debate

In advance of tonight’s first presidential debate, IWPR helps you get up to speed on these five top women’s policy issues:

  1. Improving Women’s Access to Good Jobs Can Narrow the Wage Gap
  2. A College Affordability Challenge: Declining Availability of Campus Child Care
  3. The Significance of the Gender Wage Gap; Wages among Women of Color are Especially Low
  4. Breadwinner Mothers are Common in Every State, but Policies Need to Catch Up
  5. The Evidence-Based Case for Paid Sick Days and Paid Leave Policies

 

1. Improving Women’s Access to Good Jobs Can Narrow the Wage Gap

>> Read the report, Pathways to Equity: Narrowing the Wage Gap by Improving Women’s Access to Good Middle-Skill Jobs or the Executive Summary. 

Half of the gender wage gap is due to women working in different occupations and sectors than men. Improving women’s access to good middle-skill jobs—in growing sectors, such as manufacturing, IT, and transportation—can help close the wage gap and improve women’s economic security.

pathways-website

Click to visit womenandgoodjobs.org

Visit womenandgoodjobs.org, to read the report and explore an interactive, searchable database of middle-skills jobs, which helps users identify pools of skilled women workers who could be tapped to fill shortages, ensuring that the economy benefits from the talent of its whole workforce.

2. A College Affordability Challenge: Declining Availability of Campus Child Care

>> Read the briefing paper, Child Care for Parents in College: A State-by-State Assessment

As nearly 5 million undergraduate students raising children return to college this fall, a new IWPR state-by-state and national analysis finds that campus child care is declining in 36 states across the country, and that many states have rules making it difficult for students to get child care subsidies.

For the nearly 9 in 10 (88 percent) student parents living in or near poverty, paying for child care can be an insurmountable obstacle. IWPR’s analysis finds that, rather than assisting students with the high cost of child care, 11 states require college students to also be employed to be eligible for child care subsidies. In 3 states—Arizona, Kentucky, and Washington—parents are required to work at least 20 hours per week in addition to attending school, an amount proven to diminish rates of college completion among students overall, in order to be eligible for subsidies.

3. The Significance of the Gender Wage Gap; Wages among Women of Color are Especially Low

>> Read IWPR’s New Resources on Pay Equity & Discrimination, including Five Ways to Win an Argument about the Gender Wage Gap

IWPR’s updated fact sheet clarifies the most common myths about gender wage gap statistics. IWPR’s researchers note that a pay gap of 79.6 percent accurately describes the pay inequality between men and women in the labor force and reflects a variety of different factors, including: discrimination in pay, recruitment, job assignment, and promotion; lower earnings in occupations mainly done by women; and women’s disproportionate share of time spent on family care, including that they—rather than fathers—still tend to be the ones to take more time off work when families have children.

In fact, the annual wage ratio of 80 percent is actually a moderate estimate of gender pay inequality. Women of color fare much worse, with Black women making 63.3 percent of what White men earn per year and Hispanic women making 54.4 percent.

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In addition, IWPR has found:

  • Women earn less than men in almost every occupation and are four times more likely than men to work in jobs with poverty-level wages.
  • If current trends continue, women will not receive equal pay until 2059, according to a related IWPR analysis of trends in earnings since 1960.
  • If women earned the same as comparable men—men who are of the same age, have the same level of education, work the same number of hours, and have the same urban/rural status—poverty among working women would be cut in half and the US economy would grow by $482.2 billion.

4. Breadwinner Mothers are Common in Every State, but Policies Need to Catch Up

>> Read the quick figures, Breadwinner Mothers by Race/Ethnicity and State

A new IWPR national and state-by-state analysis of breadwinner moms finds that four in five Black mothers and two in three Native American mothers are breadwinners, compared with fewer than half of White and Asian/Pacific Islander mothers. Breadwinner moms are either raising children on their own or contributing at least 40 percent of a married couple’s earnings. The majority of Black, Native American, and Hispanic breadwinner moms are single and raising a family on their own, while the majority of White and Asian/Pacific Islander breadwinner mothers are married.

As the share of breadwinner mothers increases, another IWPR analysis found that women’s wages fell 1.6 percent between 2004 and 2014, with Black, Native American, and Hispanic women’s earnings falling around three times as much as women’s earnings overall. (Read the analysis with state data for Black women and Native American women.)

5. The Evidence-Based Case for Paid Sick Days and Paid Leave Policies

>> Read the briefing paper, Paid Sick Days Benefit Employers, Workers, and the Economy

Four in 10 American workers lack access to paid sick days, with access less likely among Hispanic workers and workers in low-wage and food service jobs. A recent IWPR briefing paper compiles all available social science and policy research, which show that paid sick days are associated with benefits to employers—including reduced contagion in the workplace, improved productivity, decreased workplace injuries, and lower employee turnover—and employment benefits to workers, including greater job stability and labor force attachment.

>> Read the report, Paid Parental Leave in the United States: What the Data Tell Us about Access, Usage, and Economic and Health Benefits

Another IWPR report compiles available research and data on the access to paid parental leave and the benefits of such a policy. A growing body of research suggests that paid family leave increases labor market attachment, economic security, and the health and welfare of families and children, and has the potential to help businesses thrive, reduce spending on public benefits programs, and promote economic growth and competitiveness.

Follow @IWPResearch on Twitter and Facebook.

5 Points to Bring Up to Win an Argument about the Gender Wage Gap

by Heidi Hartmann, Ph.D., Barbara Gault, Ph.D., and Ariane Hegewisch

The 79 percent wage ratio figure, the most commonly used figure to measure the gender wage gap in the United States, is often derided as misleading, a myth, or worst of all, a lie. In this blog, we argue that the figure is an accurate measure of the inequality in earnings between women and men who work full-time, year-round in the labor market and reflects a number of different factors: discrimination in pay, recruitment, job assignment, and promotion; lower earnings in occupations mainly done by women; and  women’s disproportionate share of time spent on family care, including that they—rather than fathers—still tend to be the ones to take more time off work when families have children. Just because the explanation of the gender wage gap is multi-faceted does not make it a lie.

When a phenomenon, such as the wage gap, can be explained by various factors, it does not mean the phenomenon doesn’t exist.  In fact, those explanations are the exact factors to look at when identifying interventions to solve the problem. Take another phenomenon for example: poverty. Black and Hispanic populations in the United States have higher poverty rates than the white population. When analyses control for education, place of residence, type of job, and many other factors, the remaining differences in poverty rates are smaller but not gone. It is not a myth or a lie, then, to say that black and Hispanic Americans are disproportionately more likely to live in poverty. Indeed, they are.

Here are five key facts to remember about the gender wage gap:

1) Other data series on weekly or hourly earnings are not necessarily more accurate than the annual figure.

Some claim that proponents of equal pay use the 79 percent annual wage ratio figure because it shows the biggest wage gap, 21 percent, when other data series on weekly and hourly earnings available from the Bureau of Labor Statistics (BLS) show slightly smaller gaps. There is no basis for the claim that weekly or hourly data are a more accurate representation of inequality in pay between men and women. The 79 percent annual wage ratio figure is the historical headline figure, likely because it allows the longest comparison across time and includes the broadest range of different kinds of earnings, including self-employment income. Annual bonus payments, for example, are a big part of remuneration in some fields and are included in the 79 percent figure, but are excluded from the weekly or hourly earnings figures. Both the weekly and annual earnings ratios are for full-time workers only; if part-time and part-year workers were included, the ratios of women’s to men’s earnings would be even lower, as women are more likely than men to work reduced schedules, often in order to manage unpaid childrearing and other caregiving work.

2) The annual wage ratio of 79 percent is actually a moderate estimate of gender pay inequality.

If part-time workers were included, a figure that Statistics Canada uses, the wage ratio would be 69.9, a gap of 30.1 percent.  The United Kingdom has used life-time earnings ratios.  One IWPR study found that across 15 years (ending in 1998, using the Panel Study of Income Dynamics), the typical American woman earned just 38 percent of the typical man. The Urban Institute, using Social Security earnings data, finds that the typical wife earns about 50 percent of what her husband does across their working lives. In fact, the 79 percent figure falls in the middle of the range of these other estimates.

3) Women’s ‘choices’ are not necessarily choices.

Wage gap skeptics emphasize that women ‘choose’ different and lower-paying college majors than men, implying such differences mean that the wage gap measure is not a good measure of economy-wide wage inequality.  ‘Choice’ is, of course, an unverified assumption. There is considerable evidence of barriers to free choice of occupations, ranging from lack of unbiased information about job prospects to actual harassment and discrimination in male-dominated jobs. For instance, a library assistant may choose to go to school for 6 more years to become a librarian, or she may choose to go to school for half that and become an IT support specialist, if she knew that librarians and IT support specialists were paid roughly the same per year. In a world where half of IT support specialists were women and half of librarians were men, men and women might ‘choose’ very differently than they do now. We do know that young women and men generally express the same range of desires regarding their future careers in terms of such values as making money and having autonomy and flexibility at work, as well as time to spend with family.

4) There is no proof that being a mother makes a woman less productive on the job.

There are legal cases, as well as social science research studies, that show that just by the mere fact of being a mother, women’s advancement opportunities shrink, and just by being a father, men’s grow. And why should women who may be decades past the phase of active childrearing still be suffering a wage penalty?  While it is true that women typically take more time away from work for child rearing than do men, that decision often makes economic sense when a wife’s wages are lower than her husband’s—equal pay would likely lead to more equitable sharing of child rearing. In fact, women’s human capital (generally measured as years of education plus years on the job and in the job market) are increasingly equal for women and men.  Furthermore, research shows subsidizing the cost of child care and providing paid parental leaves of up to six months would help women return to work sooner, and would help men to more equally share care.

5) Discrimination is still a factor—a big one—in the gender wage gap.

It is true that, when factors such as occupation and parental or marital status are used as control variables in statistical models aiming to explain what ’causes’ the wage gap, the size of that gap is reduced, and what is left unexplained is generally thought to possibly be the result of discrimination. But it is just as likely that discrimination affects these ‘control’ variables as well as the size of the remaining gap. Peer reviewed literature surveys published in mainstream economics journals, including a recent study by Francine Blau and Lawrence Khan estimate that 38 percent of the gross wage gap remains unexplained when factors reasonably thought to affect productivity are included as control variables in the models. Blau and Kahn estimate that occupational segregation—where women work in lower paid jobs, typically done by women, and men work in higher paying jobs typically done by men— along with segregation by industry and firm, are now responsible for half the wage gap.  While some occupational differences result from differences in preparation for the labor market by women and men, others result from different job assignments by employers when women and men first participate in the labor market.

It is important to look at the 79 percent figure as a baseline to understand the true magnitude of the problem, so we can intervene on factors such as employer bias, career preparation, and time spent on family care. When we look at the control variables, the findings do not indicate that the wage gap is actually a smaller problem than we thought. The findings indicate that women need more information and opportunity to pursue certain lucrative careers, like those in STEM, where the largest employers are only now providing paid family leaves that can encourage the more equal division between women and men. Redressing the US lag in providing paid family leave and subsidized child care can help, but so can improved information about pay and stronger enforcement of our equal opportunity laws.

Heidi Hartmann, Ph.D., is a labor economist, president and founder of the Institute for Women’s Policy Research, and a MacArthur Fellow.

Barbara Gault, Ph.D., is the vice president and executive director of the Institute for Women’s Policy Research.

Ariane Hegewisch is a study director at the Institute for Women’s Policy Research.

As You Celebrate the 4th, Remember Why America’s Working Families Need Unions to Stay Strong

by Brigid O’Farrell

As you celebrate with your loved ones over the holiday, remember how unions have helped American families secure prosperity and opportunity, and why we should consider unions a basic form of democracy.

The decline of the American labor movement, now representing just 12 percent of the workforce, and the corresponding increase in inequality hurts working families. Whether a home health aide, teacher, electrician, or autoworker, you are less likely to have a voice at work. This means lower wages, fewer benefits, and less ability to care for your family. It also means less democracy in our country.

The union advantage for working families starts with higher wages. On average, union women earn 13 percent more per hour than women not in unions and this is especially true for low-wage jobs women hold. The union advantage for office cleaners, for example, is 28 percent. Collective bargaining also reduces the gender wage gap between women and men by half.

Higher wages are critical to the well being of working families, but not enough. The union advantage also includes better access to higher paying jobs, often through apprenticeship training, as well as access to paid sick days, short-term disability, family leave, better schedules, and child care.

Just last week, President Obama told his White House Summit on Working Families, that, “Family leave, childcare, workplace flexibility, a decent wage—these are not frills, they are basic needs… part of our bottom line as a society.” Labor was in the house: Over 250 union members and allies made their voices heard. Liz Shuler, Secretary-Treasurer of the AFL-CIO, representing 57 unions and over 13 million members, and Mary Kay Henry, president of the 2.1 million member Service Employees International Union (SEIU) highlighted union support for family friendly public policies and collective bargaining as a tried and true method for securing not only decent wages and safe working conditions, but for negotiating flexible schedules and paid leaves. For example:

Kay Thompson is the mother of four daughters who has worked at Macy’s flagship store on Herald Square in New York City for over 20 years. She is a proud member of Local 1-S, Retail, Wholesale & Department Store Union/UFCW. She told the audience that she was able to provide for her family with a flexible yet predictable schedule because of her union contract.

Connie Ashbrook, union elevator constructor and executive director of Oregon Tradeswomen, Inc., focused on the 50 percent of jobs that require science, technology, engineering or math skills (STEM), but don’t require a college degree. Women are capable and interested in skilled trade jobs, but still hold less than 3 percent of these occupations. Outreach, training and enforcing employment discrimination laws are policies that help her work with unions and contractors to increase the number of women in the trades.

Union members also gathered at the AFL-CIO headquarters the day before to share their stories at Working Families Speak Up!

Dina Yarmus is a hotel and restaurant worker who defended her healthcare plan through UNITEHERE Local 274 in Philadelphia. Joanne Hager is a construction laborer from Minneapolis and trainer for LiUNA Local 563. Being a tradeswoman transformed her life—a living wage, a pension plan, a union job. Connie Leak, president of the Coalition of Labor Union Women and UAW member, told other workers that this wasn’t just about boots on the ground, but about “heels, flats, and sneakers heading to the streets” to talk about working family issues and the importance of unions, collective bargaining, and public policy.

Working family polices are often a mix of public and private actions. California provides an example of how unions helped to secure a family friendly state policy that women and men now use to sustain their families, maintain their economic stability, and keep their jobs.

The United States is one of just three countries in the world without a paid family leave policy. California was the first state to take action to address this problem, now joined by New Jersey and Rhode Island.

Under the California Paid Family Leave Act employees pay into the insurance system regardless of the size of their employer and have access to six weeks of paid leave to care for new children or ill family members. Employers do not pay into the system, but have to accommodate the time off. The Labor Project for Working Families helped make paid leave in California a reality. They receive leadership and financial support from many unions and worked for years to help pass this bill. 

In Unfinished Business, Paid Family Leave in California and the Future of U.S. Work-Family Policy, professors Ruth Milkman and Eileen Appelbaum document labor’s role and their finding that there are almost no negative effects on business. Management executives talk about how good the program is for their companies. Many employees, however, are unaware that they pay into the fund and have access to the benefits. This is true in the building and construction industry where any kind of paid leave has not generally been available.

Krista Brooks and Johnathan Brooks, both apprentice electricians with IBEW Local 617 in San Mateo, CA, illustrate how having good apprenticeship jobs and a paid family leave policy are very important to families. Krista, one of the 2.6 percent of women in the skilled trades, just graduated from her apprenticeship program and is completing her work hours to reach journey-level status. Johnathan is a second year apprentice. Both parents were able to spend quality time with their newborn without sacrificing their much needed paychecks or their jobs.

The couple heard about paid family leave from other union members. Krista was able to take disability leave for part of her pregnancy and use paid family leave when her daughter was born. Johnathan was then able to take paid family leave in two phases. First he had two weeks right when the baby was born. A few weeks later when Krista went back to work he was able to take more time to bond with the new baby. The apprentices, their local union, and the contractors worked together maintaining insurance coverage and having jobs when the parents returned. They didn’t have their full salaries and things were tight, but paid family leave made a big difference.

While the number of women in the workforce has reached an historic proportion and more men are opting to stay home with children, the problems are not new. In 1963 President Kennedy released American Women, the report of his President’s Commission on the Status of Women. Fifty years ago the report noted that 70 other western industrialized countries offered paid maternity leave and called for the U.S. to do the same. They documented the urgent need for quality, affordable child care. The commission cited the concentration of women in low-wage jobs as the primary cause of the wage difference between women and men. They called for improved vocational education, counseling for non-traditional jobs, and an end employment discrimination against women.

The Commission stressed that the value of unions and collective bargaining had already been well established and secured through the National Labor Relations Act. They called for states to do the same. Eleanor Roosevelt, chair of the President’s Commission, wrote that “There are only two ways to bring about protection of the workers…legislation and unionization.” She later told the United Nations Human Rights Commission that “the right to form and join trades unions [is] an essential element of freedom.” For her, unions represented democracy in the workplace, with all of its strengths and weaknesses, and were a model for democracy in the country and around the world. 

Maybe it’s time for a summit on the importance of unions and collective bargaining for working families and for our democracy. But in Eleanor Roosevelt’s words, “We can’t just talk. We have got to act.” 

This post originally appeared on AlterNet. Brigid O’Farrell’s most recent book is She Was One of Us:  Eleanor Roosevelt and the American Worker.  With Betty Freidan she edited Beyond Gender: The New Politics of Work and Family. See www.bofarrell.net.

6 Things Washington Post’s Glenn Kessler Missed about the Gender Wage Gap

by Heidi Hartmann, Ph.D., Barbara Gault, Ph.D., and Ariane Hegewisch

(This post is in response to Glenn Kessler’s two Pinocchio rating of “President Obama’s persistent ’77-cent’ claim” on April 9, 2014, in the Washington Post.)

Glenn Kessler presents a very one-sided discussion of the wage gap in this April 9th “Fact Checker” post in which he increased President Obama’s rating on his use of wage gap statistics from one Pinocchio (in the 2012 campaign) to two—he should have lowered it from one to zero.  President Obama has correctly used a long standing data series issued every year by the Census Bureau.  The 77 percent wage ratio figure is an accurate measure of the inequality in earnings between U.S. women and men who work full-time, year-round in the labor market.

Here are some other things to keep in mind about that statistic:

1) Kessler claims that President Obama uses the 77 percent wage ratio figure because it shows the biggest wage gap when other data series available from the Bureau of Labor Statistics show slightly smaller gaps.  Leaving aside how Kessler could get inside the President’s head and know why he picked a certain series, everyone who writes about this issue should know that this figure based on median annual earnings is the historical headline figure that allows the longest comparison across time.

2) Kessler claims that the other series—weekly or hourly earnings—are more accurate, but there is simply no basis for saying so.  The 77 percent figure actually includes the broadest range of kinds of earnings; for example annual bonus payments are a big part of remuneration in some fields and are included in the 77 percent figure, but are excluded from the weekly or hourly earnings figures.

3) In his first fact check column (posted online at 6:15 am on April 9, 2014), Kessler failed to note that other measures show a much larger gap than the 23 percent figure President Obama used.  If part-time workers were included, a figure that Statistics Canada uses, the wage ratio would be 71 percent and the gap 29 percent.  The United Kingdom has used life-time earnings ratios.  One IWPR study found that across 15 years (ending in 1998, using the Panel Study of Income Dynamics), the typical American woman earned just 38 percent of the typical man.  The Urban Institute, using Social Security earnings data, finds that the typical wife earns about 50 percent of what her husband does across their working lives. Kessler had updated his column to add mention of these other measures, but fails to alter his conclusion that the President used the biggest wage gap.  In fact, the figure the President used falls in the middle of the range and is the one most commonly used for the past 60 years.

4) Kessler emphasizes that women ‘choose’ different and lower-paying college majors than men and seems to think such differences mean that the wage gap measure is not a good measure of economy-wide wage inequality.  ‘Choice’ is, of course, an unverified assumption. There is considerable evidence of barriers to free choice of professions, ranging from lack of unbiased information about job prospects to actual harassment and discrimination in male dominated jobs. It is highly likely that there are many women who are freely choosing to become social workers, and are making well-informed decisions, and the same is likely to be true for men choosing to be engineers. However, there are no hard facts on how many, or indeed, how many would ‘choose’ otherwise in a world of complete information and nondiscriminatory employment.  For example, in a world where half of engineers were women and half of social workers were men, men and women might ‘choose’ very differently than they do now. We do know that young women and men generally express the same range of desires regarding their future careers in terms of such values as making money and having some flexibility and autonomy at work, as well as time to spend with family members.

5) There are legal cases, as well as social science research studies, that show that, just by the mere fact of being a mother, women’s advancement opportunities shrink, and just by being a father, men’s grow. Yet, there is no proof that being a mother makes a woman less productive on the job.  And why should women who may be decades past the phase of active childrearing still be suffering a wage penalty?  While it is true that women typically take more time away from work for child rearing than do men, that decision often makes economic sense when a wife’s wages are lower than her husband’s—equal pay would likely lead to more equitable sharing of child rearing and to women and men working in the labor market about the same amount over their lifetimes.  Research shows subsidizing the cost of child care and providing paid parental leaves of up to six months would help women and men return to work sooner. While Kessler has said the goal of his Fact Checker column is to provide needed context to what political leaders say, this is a part of the needed context he omitted entirely.

6) It is true, as Kessler notes, that when factors such as occupation and parental or marital status are used as control variables in statistical models aiming to explain what ’causes’ the wage gap, the size of that gap will be reduced, and what is left unexplained is generally thought to possibly be the result of discrimination. But it is just as likely that discrimination affects these ‘control’ variables as well as the size of the remaining gap. Unfortunately, Kessler cites only the literature that ignores the possibility of discrimination affecting the control variables.  He cites economist June O’Neill, well-known in the field for her opposition to government intervention to reduce the size of the wage gap. He also cites a study commissioned by the George W. Bush administration and done by a conservative research firm, CONSAD, which Kessler “camouflages” by saying the St. Louis Federal Reserve Bank cited it.  Kessler fails to cite peer reviewed literature surveys published in mainstream economics journals, including papers by Francine Blau and former Acting Secretary of Commerce Rebecca Blank and co-author Joseph G. Altonji. These latter studies estimate that 25-40 percent of the gross wage gap remains unexplained when factors reasonably thought to affect productivity are included as control variables in the models.

The 77 percent figure covers everyone working full-time, year round and does not reflect only women and men doing exactly the same job in the same firm; however, it does reflect women and men working full-time, year round not earning the same. The wage gap figure reflects a number of different factors: discrimination, lower earnings in occupations mainly done by women, and also the fact that women still tend to be the ones to take more time off work when families have children.  Just because the explanation of the gender wage gap is multi-faceted does not make it a lie.

We should note that on occasion, many politicians—including U.S. presidents—journalists, and others present the 77 percent figure as comparing men and women who do the same jobs, and this unfortunate tendency has led to great confusion.  But President Obama was careful in both his recent State of the Union speech and his Equal Pay Day speech to use the figure without that inaccurate qualifier. In his 2008 campaign, his literature often used the phrase ‘unequal pay for an equal day’s work’—that phrase is an accurate way to refer to men and women who both work full-time earning different pay.

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

Barbara Gault, Ph.D., is the vice president and executive director of the Institute for Women’s Policy Research.

Ariane Hegewisch is a study director at the Institute for Women’s Policy Research.

Jump Starting Real Wage Growth for Women: Increasing the Minimum Wage and Improving Overtime Laws

By Heidi Hartmann

In the context of a lost decade of wage growth for women, two recent proposals—to increase the federal minimum wage to $10.10 per hour (including increasing the separate minimum wage for tipped workers), and to increase the threshold salary for overtime pay to $50,000 annually—can provide much needed relief to women.  

Increasing the minimum wage requires that the U.S. Congress pass a law. The current minimum wage of $7.25 was set in 2007and went into effect in 2009, but President Obama has already acted by executive order to require firms that hold contracts with the federal government to pay their workers a minimum of $10.10 per hour.  In contrast, increasing the salary threshold for receiving overtime pay, does not require congressional action, but does require action by the Secretary of Labor. President Obama has recently directed Secretary Perez to consider what can be done to ensure that workers are paid fairly for their overtime hours. The Fair Labor Standards Act sets the overtime pay premium at 50 percent more than the regular wage or salary, also known as “time and a half.” Currently the threshold annual salary is set at about $23,000 ($455 per week).  A worker classified as executive, administrative, or professional, who earns more than that annual salary does not currently need to be paid overtime.

Because women earn less than men on average, it is not surprising that women are the majority—64 percent—of those who earn the minimum wage and would thus benefit disproportionately from an increase in the minimum wage.  Economists expect that employers will also increase the pay of workers earning somewhat above the minimum, in keeping with past experience of minimum wage increases.  An EPI analysis shows that 15.3 million women—9.6 million directly and 5.7 million through the spillover effect— would receive a pay increase were the minimum wage to be raised to $10.10 per hour.  EPI also finds that nearly one-third of all working single mothers—or 2.3 million women—would receive a direct or indirect pay increase. Overall 55 percent of workers who would benefit from the increase are women.

A new report from the White House released earlier this morning points out that an even larger proportion of those affected by the tipped minimum wage—which has been stuck at $2.13 per hour since 1991—are women:  72 percent of tipped workers are women in occupations such as hair stylists, restaurant servers, and bartenders.  Employers need pay such workers only $2.13 per hour on the assumption that tips will raise their pay to the required $7.25 per hour.  According the White House report, about 10 percent of workers in these jobs say that does not happen.  The average wages of tipped workers are very low and their likelihood of being in poverty is high.  The White House analysis finds that about half of workers in tipped occupations would benefit from the proposal to increase the tipped minimum wage to $4.90 per hour by 2016. Of those whose wages would increase, 74 percent are women.

Likewise, women are the majority (54 percent) of all supervisory, managerial, and professional workers earning less than the proposed new overtime threshold of $984 per week, meaning that 5.3 million women would be newly covered by a requirement to be paid overtime when they work more than 40 hours per week. Currently, about 1 million of these women typically work more than 40 hours per week and would have to be paid 50 percent more for those additional hours beyond 40.   Furthermore, of all those high-level workers who earn above the new threshold and would not be required to be paid overtime, only 37 percent are women.  (Findings reference an unpublished analysis by EPI’s Heidi Shierholz.)

These two changes—the first by law, the second by regulation, and both administered by the Wages and Hour Division of the U.S. Department of Labor—would help ensure that real wages rise for millions of women, not to mention many men, in the coming decade.  In its new report the White House estimates that the minimum wage change alone would close the wage gap between women and men by more than one percentage point.

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

The Lost Decade of Wage Growth for Women

by Heidi Hartmann

Twice a year, the Institute for Women’s Policy Research (IWPR) updates its fact sheet, “The Gender Wage Gap,” to report the latest data as they become available from the Bureau of Labor Statistics and the Census Bureau.  This year, we noticed something new when we added the latest figure for median weekly earnings for men and women who work full-time—a virtual standstill in women’s real wages for the past ten years. This was true when looking at trends in both usual weekly earnings and annual earnings for those who work full-time, year-round.

For several decades, as new Fed chair Janet Yellen notes, women have been the success story in the economy. Women increasingly pursued higher education, eventually surpassing men in college graduation rates. Women also joined the labor force in larger numbers, worked more throughout their lives, and entered a variety of occupations that had been formerly virtually closed to them, becoming  bus drivers, mail carriers, fire fighters, police officers, bankers, lawyers, doctors, and many others.

These gains in education and work experience (what economists call human capital) contributed to narrowing the wage gap, and the equal opportunity legislation of the 1960s and 1970s helped too. The gender wage gap closed from 40 percent in 1960 to 23 percent in 2012 (in terms of annual earnings). Women’s real earnings—meaning wages adjusted for inflation—grew as well, from $22,418 in 1960 to $28,496 in 1970, $30,136 in 1980, $34,247 in 1990, $37,146 in 2000, and $38,345 in 2012.

In contrast, men’s real earnings have not grown since about 1975, although men’s real earnings have remained higher than women’s. In that year, men’s earnings were $50,093 (in 2013 dollars) and in 2012, they were $50,122.  In other words, men have had nearly four decades of stagnant wages.  Explanations for this are many, but the most persuasive in my view is that, for a variety of reasons stemming from institutional and policy changes, the productivity gains that the U.S. economy has enjoyed have simply not been passed on to workers (except those at the very top). Ordinarily, we economists expect workers’ wages to grow along with GDP growth and productivity growth (more output per hour worked).   In the modern economy, men’s real wages have simply failed to thrive.

Women’s real earnings, however, did grow, until about 2002 when they too caught “real wages failure to thrive” disease. What caused this stagnation for women? Economists Francine Blau and Lawrence Kahn from Cornell University have described women’s success in the labor market as “swimming upstream.” Women were able, for several decades, to overcome the forces that have been generating increased economic inequality in America. By increasing their human capital and gaining access to new, better paid  occupations, firms, and industries, women were able to achieve a significant degree of equality with men, despite trends pushing the top and the bottom further apart.

Now it seems as if the current is finally overpowering women, making it increasingly difficult for them to swim upstream. This is not to say that discrimination is any worse than it has been in the past, but progress in reducing discrimination is no longer being made.  As IWPR’s fact sheet shows, women’s annual earnings in 2012 are slightly less than they were in 2001, at $38,438.  Women’s weekly earnings at $706 in 2013 are about the same as they were in 2004, at $707.

What is to be done?  I believe only a major policy shift, similar to what occurred in the 1960s and 1970s, with the Equal Pay Act (1963), the Civil Rights Act (1964), and Title IX (1972), will be able to get women’s wages back on track.  The changes needed fall into four areas:  1) better enforcement of existing equal employment opportunity (EEO) laws and new legislation to fill the gaps in current law; 2) policies that help bring up the bottom of the labor market, which can jump start real wage growth; 3) policies that address the family needs of workers; and 4) policies that address the power of women.

Starting with the last first, encouraging collective bargaining for workers, encouraging women to take leadership positions in labor unions, encouraging women to run for public office (public funding for elections would help!), and ensuring that more women serve on corporate boards of directors would all increase women’s power.  Policies that address such work-family issues as child care and paid family leave are sorely lacking in the United States, compared with other wealthy nations, and it’s high time we caught up—these policies are likely to increase women’s wages in the long run as they help equalize caregiving between women and men and lead women to invest more in their careers.  Policies that especially bring up the bottom of the labor market have also fallen behind their historic norms:  the minimum wage in real dollars is below where it was in the 1960s.  The current proposal to increase the minimum wage to $10.10 per hour and raise the minimum wage for tipped workers to $4.90 per hour (it has been stuck at $2.13 per hour since 1991) is estimated by the White House to narrow the gender wage gap by more than one percentage point. The Obama Administration is also working on increasing the likelihood that those supervisory workers who earn  modest salaries (for example, less than $50,000 per year, 54 percent of whom are women) will be paid  time and a half for their hours worked beyond 40 per week.  Stronger enforcement of the EEO laws we have goes without saying, so that women continue to be able to enter jobs that are currently done mostly by men (men’s jobs).  We could also strengthen the law by making it illegal for employers to retaliate against workers who share pay information and requiring employers to pay comparable men’s and women’s jobs equally.

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

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.