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Raising the Tipped Minimum Wage to Reduce Poverty for Women and Families

By Alex Berryhill, IWPR Research Intern

Two women at coffee shopWomen make up over half of the workforce in food preparation and serving related occupations in the restaurant industry – one of the fastest growing sectors today in terms of job creation. According to a recent report released by the Restaurant Opportunities Center (ROC) United, with research from the Institute for Women’s Policy Research and several other organizations, restaurant workers, and especially women in the industry, often face economic insecurity due to low wages.

These workers’ struggles illuminate the need to increase the minimum wage (currently $7.25) and the tipped minimum wage (currently $2.13). A full-time minimum wage position only provides an annual income of about $15,080. According to the Economic Policy Institute, that’s below the poverty line for a family of three, and just barely over the poverty line for a family of two.

Studies show that raising the federal minimum wage—which has not changed since 2009— to just $10.10 per hour would pull more than half of the nation’s working poor out of poverty. About 20 percent of those living under the poverty line actually hold full-time jobs.

These Americans live in poverty not because they are unemployed or unemployable, but because their jobs do not offer adequate benefits and wages to support a family —issues that are particularly prevalent in the restaurant industry.

The federal tipped minimum wage has stagnated at $2.13 an hour since 1991. During this time, inflation has increased the prices paid by wage workers for goods and services approximately 70 percent, according to the Bureau of Labor Statistics (CPI-W).

An employer is required by law to fill the gap when workers do not earn the minimum wage salary on the job between tips and the tipped minimum wage. But, employers frequently ignore this requirement and allow their tipped workers to earn less than $7.25 per hour, according to the ROC-United report. Among tipped workers surveyed for the report, 13.2 percent told of having their tips misappropriated by employers (for example, having the tips shared with managers).

“If you’re in the restaurant industry in a waitress role, then you depend on tips. If don’t get any tips, you can’t pay the bills,” said one woman surveyed in the ROC-United report.  “I make, on average, $90 a week, $125 on a good week. But, that’s not even making daycare.”

The burden of today’s outdated labor policies falls disproportionately upon women. Women make up 71 percent of the restaurant industry’s servers; 74 percent of tipped restaurant workers earning at or below the minimum wage; and 78 percent of tipped restaurant workers living in poverty.

Increasing the tipped and federal minimum wage would disproportionately benefit women. Research by IWPR in another recent ROC-United report shows that raising the tipped minimum wage to $5.08 would reduce the gender wage gap within the industry by a fifth.  Among the workers who would be lifted out of poverty by increasing the minimum wage to $10.10, about 54 percent would be women. About 82 percent of tipped restaurant workers who would be lifted out of poverty with an increase to the tipped minimum wage would be women.

The challenge of low wages is compounded by the lack of benefits in the restaurant industry – problems that particularly affect workers’ families. There are two million restaurant workers who are mothers, half of whom are single parents. Of those mothers surveyed in the report, the average spent about 35 percent of their weekly wages on child care. Over 90 percent did not receive paid sick days for themselves or their sick children, and about half reported losing much-needed income, and sometimes even their job, as a result of taking time off to care for a sick child.

Without benefits, nor scheduling flexibility, and often an income below the already low minimum wage,   restaurant workers are struggling. Today’s outdated labor policies hurt millions of families and hurt America’s future.

Alex Berryhill is a Research Intern at the Institute for Women’s Policy Research. She is presently a junior at the University of California, Berkeley, majoring in Political Economy and minoring in Public Policy.

Student Parent Helps Launch Women’s Economic Agenda in Congress

Women's Economic Agenda Press Event- 2013.7.18 040

by Stephanie Brown

My name is Stephanie Brown and I recently graduated from Grand Valley State University with a bachelor’s degree in Sociology. However, I was not your average college student. I am a mother to a four-year-old daughter therefore I was considered a student parent. I am originally from the Metro-Detroit area and I got pregnant shortly after I graduated High School in 2008. I was not going to let this challenge stop me from furthering my education. I knew that I needed an education in order to land a decent job so I decided to attend community college for two years. As soon as I completed my general requirements I made the decision to further my education at a University. In the fall of 2010 I transferred to Grand Valley State University and moved to Grand Rapids with my daughter.

Grand Rapids is two and a half hours away from my hometown and family so I knew I was going to need help with my daughter in order to attend school full-time while working. Grand Valley was very helpful with directing me to their available resources for student parents. They gave me a list of affordable apartments around campus and also gave me information on daycare centers in the area. My daughter went to a quality and affordable daycare right on Grand Valley’s campus called the Children’s Enrichment Center during the day so I could work and attend classes full-time. The daycare also provided me with countless resources and created a community that made me feel very comfortable being a student parent. The director encouraged me to write an essay for a scholarship from the women’s center on campus.  I was blessed to receive that scholarship and it helped me purchase my books and school supplies.

If it was not for Grand Valley’s resources I would not have been able to work, raise my daughter, and receive my Bachelor’s degree in 5 years! Because of my education I now hold a full-time position at St. Johns-DA Blodgett as a direct care counselor in a children’s shelter.  I know that I would not have been able to receive my education and the job I have now without the resources available at Grand Valley State University. I am so very grateful for my education and also for the quality of care my child received in the process.

On July 18, 2013 U.S. Congress members launched a new Economic Agenda for Women and Families, focused on issues including pay equity, paid leave, and child care. IWPR brought student parent Stephanie Brown to Washington D.C. to share her story on how child care and other supports helped her attain her college degree. For more information on student parents visit IWPR’s Student Parent Success Initiative.  

Real Benefits for Women Now That DOMA Has Been Struck Down!

This post was originally published on the National Women’s Law Center’s blog. 

Written by Colette Irving, NWLC Intern; Emily Martin, NWLC Vice President and General Counsel; and Lauren Hartz, NWLC Intern. 

Today, the Supreme Court struck down the Defense of Marriage Act (DOMA), which provided that only a marriage between a man and woman would be recognized under federal law. The Court found that this provision of DOMA violated the Equal Protection Clause of the Constitution. This decision is historic in its recognition that the Constitution provides important protection against discrimination against same-sex relationships.

Moreover, this ruling will have a huge practical impact, providing access to important benefits previously denied to same-sex couples. As the Court wrote, “By its great reach, DOMA touches many aspects of married and family life, from the mundane to the profound.” The practical impact of this victory is particularly significant for women. Women make up about 53 percent of LGBT adults and 51 percent of same-sex couples, and women in same-sex couples are more likely than men to marry their partners. In fact, the Williams Institute found that 62 percent of same-sex couples who married or acquired some other type of formal legal status were female, in the eight states for which data is available.

Because women are more likely than men to be poor, female same-sex couples are at particular risk of financial instability. The Williams Institute compiled data from the 2000 Census and concluded that female same-sex couples face poverty at a rate of 6.9 percent. That rate is 4.0 percent for male same-sex couples and 5.4 percent for different sex couples [PDF]. Further, LGBT women are more likely than men to become parents and LGBT parents are more likely to live close to poverty. In striking down DOMA, and granting married same-sex couples access to federal benefits that provide increased financial stability, the Supreme Court has made it easier for these women, and all married same-sex couples, to make ends meet.

Twelve states give same-sex couples the freedom to marry, and approximately one-fifth of the U.S. population lives in a state that provides this freedom to marry or recognizes out-of-state marriages of same-sex couples. Here are just a few of the benefits and legal protections married women in same-sex relationships living in these states should expect to access:

  • Social Security: Certain benefits are available to the spouses, surviving spouses, and divorced spouses of workers covered by Social Security. Because of DOMA, in order to receive those benefits, spouses had to be different [PDF] sex spouses legally married in their state. While we may have to wait to see exactly how the federal government will proceed in implementing the decision today, all couples whose marriages are legally recognized in the state where they live should be able to receive these benefits.
  • Tax on Employer-Provided Health Benefits: Health insurance premiums paid by an employer for an employee and her spouse are usually excluded from that employee’s gross income. That means the employee does not pay taxes on the amount her employer contributes. Because of DOMA, same-sex spouses could not avail themselves of this tax benefit [PDF], which could mean $1,000 more paid in taxes [PDF] each year for these families. Now, all employees who are legally married in the state in which they live should be able to exclude these contributions from their income for federal tax purposes.
  • FMLA Leave: The Family and Medical Leave Act entitles employees to job-protected leave to care for children, spouses, and parents. DOMA has prevented same-sex married couples from taking FMLA leave to care for each other, even when they live in states that recognize their marriages. By striking down DOMA, the Supreme Court makes FMLA available to these couples.
  • Federal Employees Health Benefits: The Federal Employees Health Benefits Program provides health insurance to federal employees and members of their family, including their spouse and children. DOMA denied this insurance coverage to same-sex spouses of federal employees. The Supreme Court’s decision means that the federal government will provide health coverage to same-sex spouses whose home states recognize their marriages.
  • Immigration: Family unification is the cornerstone of our nation’s immigration policy. The Immigration and Naturalization Act allows United States citizens to petition for their children, spouses, and parents to be classified as “immediate relatives,” making them eligible for an immigrant visa and lawful permanent residence in this country. DOMA changed the federal government’s longstanding practice of looking to the law of the state where the marriage occurred to define spouse. This prevented gay and lesbian citizens from sponsoring their foreign partners for immigration benefits even when they were legally married under the law of the state where the marriage occurred. The Court’s decision restores this critical opportunity to bi-national same-sex couples.

The Court’s historic decision has tremendous significance for millions of gay, lesbian, bisexual, and transgendered Americans in affirming their right to equal protection under the law. This victory is important not only for its symbolism but also for its real-world impact. Now many same-sex married couples can access these critical federal benefits on equal footing.

Shining a Light on the Wage Gap

HHFifty years after the Equal Pay Act, employment discrimination persists but is harder to see.

By Dr. Heidi Hartmann

When the Equal Pay Act (EPA) was passed 50 years ago, discrimination was, in many ways, openly accepted in the workplace and women were expected to earn less than men in the same jobs. The EPA signed by President John F. Kennedy on June 10, 1963, helped to reduce this type of blatant employment discrimination, but it is still present and the wage gap persists.

The Institute for Women’s Policy Research (IWPR) was founded 25 years ago, at the end of the 1980s, the decade which saw the most sustained narrowing of the gender wage gap since passage of the EPA. Between 1981 and 1990, the gender wage gap closed by more than ten percentage points. In the most recent decade, progress has stalled and the gap narrowed by no more than one percentage point.

There is no single cause for the pay gap. Jobs dominated by women pay less than jobs dominated by men. Over their lifetimes, women still take off more time from paid work for family care than men. Women also still face subtle—and not so subtle—discrimination when they do the similar work to men. Direct discrimination is still estimated to account for between one quarter and 40 percent of the wage gap, according to several reviews of social science research.

Employers can no longer advertise jobs at different rates for men and women. But paying women less for similar performance, giving women less access to career-enhancing opportunities, and making it harder for women to get promoted are practices that continue to hinder progress towards equal pay.

Tackling those types of employment discrimination is surprisingly difficult because employees may still be fired simply for discussing their earnings with a colleague or coworker. In an age when information sharing has become widespread and hearing about a major life event over social networking is not uncommon, exchanging pay information remains frowned upon by many employers. Pay secrecy allows disparities, discrimination, and unequal pay to hide under the rug.

President Kennedy hands out pens at the White House signing of the Equal Pay Act on June 10, 1963.  Image by © Bettmann/CORBIS

President John F. Kennedy hands out pens at the White House signing of the Equal Pay Act on June 10, 1963. Image by © Bettmann/CORBIS

According to an IWPR/Rockefeller survey, half of all workers (51 percent of women and 47 percent of men) report that the discussion of wage and salary information is either discouraged or prohibited and/or could lead to punishment. The Equal Pay Act does not protect workers against retaliation for sharing salary information with their co-workers. In the public sector, where pay information is publicly available, a smaller pay gap exists compared to the private sector.

The 2009 Lily Ledbetter Act provides that every paycheck that pays a woman less than a male colleague for equal or similar work can be challenged in court, but the act did not address pay secrecy. Ledbetter worked for a company that prohibited the discussion of one’s salary. After 18 years on the job, Ledbetter sued when, in an anonymous note from a coworker, she received evidence that she was being paid unfairly. The Paycheck Fairness Act was introduced in the last Congress, but failed to pass to a vote in the Senate. This bill would have protected workers against retaliation for sharing pay information.

Women don’t have the time to wait to earn the same as men because their families need the money now. According to the most recent estimate from IWPR, however, the wage gap is not expected to close until 2057. Many women working today will never see equal pay, harming their long-term earnings and leaving them with lower retirement income.

In an age where women in the United States are almost half the workforce, are more likely to gain higher levels of education than men, and increasingly are the main or co-breadwinner in families, we cannot wait for another 44 years for the gender wage gap to be finally relegated to the history books.

Dr. Heidi Hartmann is President of the Institute for Women’s Policy Research. 

One on One with Rosa DeLauro, Congresswoman and Champion for Women and Families

Congresswoman Rosa DeLauro speaking at IWPR's 25th anniversary event.

Congresswoman Rosa DeLauro speaking at IWPR’s 25th anniversary event.

By Caroline Dobuzinskis

Congresswoman Rosa DeLauro is known in Washington, D.C., is a champion for women. Her dedication and continued work to improve policies for women and their families demonstrate why more women should run for office.

Rep. DeLauro represents Connecticut’s Third District, which stretches from the Long Island Sound and New Haven to the Naugatuck Valley and Waterbury. She serves in the Democratic leadership as co-chair of the Steering and Policy Committee, and she is the ranking member on the Labor, Health, Human Services, and Education Appropriations Subcommittee. From that position, Rep. DeLauro works to increase support for education and innovation, to fully implement the Affordable Care Act, to protect the rights of employees and unions, and to raise living standards.

Rep. DeLauro has led efforts in Congress to achieve full pay equity for women and to ensure that all employees have access to paid sick days. Soon after earning degrees from Marymount College and Columbia University, she followed her parents’ footsteps into public service, serving as the first Executive Director of EMILY’S List, a national organization dedicated to increasing the number of women in elected office, Executive Director of Countdown ’87, the national campaign that successfully stopped U.S. military aid to the Nicaraguan Contras, and as Chief of Staff to U.S. Senator Christopher Dodd.

In 1990, Rep. DeLauro was elected to the House of Representatives, and she has served as the Congresswoman from Connecticut’s 3rd District since. She is married to Stanley Greenberg, President of Greenberg Quinlan Rosner, a public issues research firm. Their children—Anna, Kathryn and Jonathan Greenberg—all are grown and pursuing careers. They have four grandchildren, Rigby, Teo, Sadie, and Jasper.

Tell me about yourself. What was your personal journey to your current career?

My family always stressed the value of public service. Both of my parents served on the New Haven Board of Aldermen and my mother is the longest serving Alderman—or Alderwoman!—in New Haven’s history. They really imparted to me the importance of giving back to your community and trying to better the world around you.

I have attempted to live up to the example they set throughout my life. For a long time I worked in more of a behind-the-scenes role… Eventually, I decided that I wanted to hold elected office myself and have been privileged to serve in Congress ever since.

What do you consider to be your greatest achievements?

A few things stick out. One is doubling the funding for the National Institutes of Health between 1998 and 2003. As an ovarian cancer survivor, one of my explicit goals when I came to Congress was supporting medical research and the fight against cancer. That doubling has reaped real dividends and we have made amazing progress, but we really need to do it again!

Another was passing the Affordable Care Act in 2010. Because of that law women’s health care is finally on the same footing as men’s and millions of women will no longer have to pay more for their insurance just because they are a woman. It is truly transformative and people across the country will continue to see more of its benefits in the coming years.

What obstacles did you encounter along your path to a successful career?

While serving as Senator Dodd’s Chief of Staff I was diagnosed with ovarian cancer. I was supposed to be running his reelection campaign and worried about what would happen. When I told Senator Dodd, he was so supportive and told me to take all the time I needed to get better. I will never forget that and it has been a huge part of why I am so driven to ensure all Americans can take time off, without having to fear for their paycheck, when they or a loved one are sick.

How do you think that the landscape has changed for women in the past 25 years or, more recently, in the past decade?

Clearly we have made great strides. Women make up about half of the workforce and we see more women in leadership roles in both the public and private sector—though still far too few!

But women still make just 77 cents for every dollar a man does and make up the majority of minimum-wage workers. This mirrors the growing gap between the wealthiest and poorest in our society. Electing more people to public office who will fight for equal pay, family-friendly workplace policies and better educational opportunities is crucial to righting this.

Are there certain policies to support women that you think are still lacking in the United States?

I have introduced the Paycheck Fairness Act in each of the past eight congresses and I will continue fighting for it until we truly have equal pay for equal work. The bill is very simple—it says same job, same pay, regardless of gender. Nearly 50 years after President Kennedy signed the Equal Pay Act into law we should not still be having these same battles.

And as I mentioned earlier, we need policies that will make our workplaces more family-friendly and reflect a society where both men and women work outside the home. I have repeatedly introduced legislation to ensure workers can take paid leave when they or a loved one are sick. We have seen similar policies passed in cities across the country and I am hopeful it is only a matter of time before people nationwide have that right.

What are your goals for women in the United States and across the globe?

Women should be recognized for their skills, talents, and intelligence on an equal playing field as men. Girls should have access to education and be encouraged to thrive in those environments. Young women should be paid the same as their male colleagues and have the same opportunities to blaze whatever career path they choose. And older women should have a dignified retirement and not have to make the terrible choice between food, housing, medicine, or other necessities. At times it may seem like a struggle, but I know that one day all of these goals will be reality.

Congresswoman Rosa DeLauro spoke about “An Economic Agenda for Women’s Equality” at IWPR’s 25th anniversary event on May 22, 2013, at the AFL-CIO in Washington, DC. Watch the full video of the event.

One on One with Cindy Estrada, Union Leader

By Caroline Dobuzinskis

Cindy Estrada is Vice President of the International Union, United Auto Workers.

Cindy Estrada is Vice President of the International Union, United Auto Workers.

Throughout this month, IWPR will be interviewing speakers appearing at our 25th anniversary celebration on May 22. Our esteemed speakers will share with us their own stories of accomplishment and perseverance, their perspectives on women’s advances, and their hopes for future progress.

Cindy Estrada has an impressive record of accomplishments. She is the first Latina elected as Vice President of the United Auto Workers (UAW) in 2010, a mother of twin boys, and a lifelong activist for workers’ rights. When Estrada speaks, her compassion and toughness are as notable as her accomplishments.

Estrada was inspired to join the labor movement from a young age. Growing up in Detroit, she was familiar with the auto workers in the city as they would come by her father’s bar. She also worked under iconic labor activist, César Chavez, during her early years as an activist organizing for farm workers in California. Following those experiences, she climbed the ladder at the UAW, working to create and implement a number of organizing strategies and becoming a resonating voice for women’s and workers’ rights.

It was in Detroit that Estrada ran her first campaign for auto workers. An auto factory that had been passed down to daughters of the original owner was being poorly managed and workers were facing low wages and unsafe conditions. Estrada acted as their voice and advocate because, as she said, the women already know how the auto plant could be run better. “Somebody told me a long time ago, my job is not to coddle the worker, but to show them how to fight back,” Estrada told me in an interview over the phone.

Maintaining a balance between work and family is very important to Estrada. “One of my [greatest accomplishments] is my kids,” she said. “And to still be able to do the work that I do and […] balance it with family. Every day, to figure out how to balance it.”

When I asked Estrada about obstacles along her career paths, she was quick to clarify that she had encountered “choices, not obstacles” on the way to her leadership role. At the same time, she understands the pressures that women can face when they choose. “Progress, not perfection,” said Estrada. “Really focusing on the things I should say no to because I want to be there for my kids.”

There were instances when Estrada chose time with family over work, including stepping down from a position at the UAW after having twins to spend more time at home. Estrada says there needs to be more acceptance and recognition for women who sometimes choose family over work.

As a union leader and a woman, Estrada is blazing trails. According to a 2007 IWPR report, while women’s membership in unions is increasing, men are much more likely to serve in leadership roles. As a woman advocating for a male-dominated industry, Estrada has at times encountered presumptions that she does not have the expertise, or met with men who only wanted to address the other men in the room. “Fortunately, in our union I work with men that are very progressive,” said Estrada. “And when I feel like something is not right, I can talk to them.”

When it comes to the future of women, Estrada strongly believes that women need to take a seat at the table in order to be heard, echoing similar messages from women leaders like Sheryl Sandberg.  “I think women are taught that we need to do more [in order to] to take that seat at the table. But it is better for our community [for women] to be there. Our communities need the soulfulness, the intelligence, the wisdom of the women at the table.”

The actions of women alone are not all that are required for equality, and Estrada recognizes that movements and policies supporting women are essential to their empowerment. “We need paid family and medical leave,” said Estrada. “That’s why unions are so important. Women belong in the labor movement because it will be critical to their advancement.”

Estrada says mentoring is also one of the keys to opening doors for women, giving them the opportunity to contribute to the conversation and to lead—which is why mentoring is also one of the UAW’s main goals. “I wouldn’t be here today if it weren’t for the men and women who mentored me.”

You can hear Cindy Estrada speak at IWPR’s May 22 anniversary celebration, “Making Research Count for Women: Launching the Next 25 Years.”

Perspectives on Women’s Progress in the Workforce—Voices of Women Leaders

by Caroline Hopper

As I near my college graduation, the prospect of entering the workforce at the tail end of a historic recession is intimidating. While it should no longer be the case, it is even more intimidating to enter the job market as a woman. Despite decades of civil rights laws banning discrimination and countless milestones in the feminist movement, evidence indicates that women like me who are entering the work force, could still face gender discrimination.

Discrimination was the norm for previous generations of working women. I spoke with Susan Scanlan, President of Women’s Research & Education Institute and Chair of the National Council of Women’s Organizations (NCWO), about her experience as a young professional. For Scanlan, sexism was obvious from the moment she walked into her first professional interview.

Scanlan was asked in her interview if she was planning to get married soon and, if so, if she was planning on becoming pregnant shortly after. “Among the questions I was asked in my interview: ‘Do you understand that the ladies on our staff must maintain an attractive appearance and may never wear slacks to work?’” said Scanlan. “This was long before sex-segregated Help Wanted ads were outlawed.”

Scanlan accepted the job offer. “I was grateful to earn three-quarters the salary of the entry-level man in the office,” she said. “They had high school degrees; I’d just completed a master’s at Tulane University.”

Scanlan’s first “real” job was on Capitol Hill as a legislative assistant to Rep. Charlie Wilson in 1972. But between 1965 and 1971, she worked as a clerk and typist for the U.S. Army during her summers off from college and graduate school (she once typed 100 words a minute with no errors in a competition).

“The professional world for women is infinitely improved from those foolhardy days…they are protected by many laws and civil rights that Second Wave feminists fought and bled to enact,” Scanlan acknowledged.

According to IWPR research, in 1960 the gender wage ratio was 60.7 percent. There were dramatic improvements in the 1980s, but progress in closing the gap has stalled in the last decade. The ratio of female to male annual earnings is now 77 percent—just slightly better than the ratio that Scanlan herself experienced in the 1960s. Going at today’s rate, it will take until 2057  to reach equal pay.

Esmeralda Lyn, Chair of IWPR’s board of directors, recently retired as the C.V. Staff Distinguished Professor of Finance and International Financial Services, and previously served as a finance officer at the United Nations in New York City. Commenting on her decades of professional experience, Lyn said, “There is no exception: finance is still an old boys’ club.”

IWPR research found that the finance industry has one of the largest wage gaps and that women are underrepresented among the highest earners in the banking and finance industry. According to IWPR analysis, in the banking and finance industries only 26 percent of employees with high earnings (at least $100,000 per year) are women.

Despite what Lyn describes as the “egregious gender discrimination [that] happens in the corporate world and in large international organizations,” she believes the situation is slowly improving.

Caroline Hopper is a former intern with the Institute for Women’s Policy Research and is a student at The George Washington University. Look for more perspectives on women in the workforce coming this month.


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