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Revisiting the Poverty Rate: New Measure Shows Less Inequality

By Jacqui Logan

A recent IWPR fact sheet, “A Clearer View of Poverty: How the Supplemental Poverty Measure Changes Our Perceptions of Who is Living in Poverty” by Jocelyn Fischer, examines the recently developed Supplemental Poverty Measure. The new measure—created in response to concerns about the adequacy of the official federal poverty measure—uses both post-tax income and federal in-kind benefits to assess the resources of families and individuals. The most salient aspect of the new measure is a more accurate poverty threshold. Each year, the new measure will be released along with the official measure by the Census Bureau and the Bureau of Labor Statistics.

IWPR’s fact sheet compares the poverty situation in America as described by the new Supplemental Poverty Measure to that described by the official measure, which takes into account only cash resources when determining income. IWPR’s analysis found two quite different pictures of poverty according to the two measures.

The overall poverty rate is higher under the Supplemental Poverty Measure (15.9 percent poor) than it is under the official poverty measure (15.1 percent poor). Moreover, IWPR’s analysis shows there is less inequality in poverty between different demographic groups under the Supplemental Poverty Measure than under the official poverty measure.

While both men’s and women’s poverty rates are higher under the Supplemental Poverty Measure, men’s poverty rate (14.1 percent under the official poverty measure and 15.2 percent under the supplemental measure) rises numerically and proportionately much more than women’s poverty rate (16.3 percent under the official measure and 16.6 percent under the supplemental measure), thus decreasing inequality between men’s and women’s poverty rates.

Similarly, there is less inequality by race/ethnicity under the Supplemental Poverty Measure than under the official measure. Furthermore, when compared wtih the official measure, the supplemental measure indicates less inequality in poverty between persons of different age groups and between the married and the unmarried.

Overall, use of the Supplemental Poverty Measure reveals a higher rate of poverty in the United States and changes perceptions of whom we consider poor.

For more information on IWPR’s research on poverty and its impact on women and families, please visit our website.

Jacqui Logan was a Research Intern with the Institute for Women’s Policy Research during the summer semester.

Facing the Wage Gap as a Female College Grad

IWPR Research Intern Vanessa Harbin

by Vanessa Harbin

As someone who considers herself to be pretty plugged in to gender issues, I have often heard the statistic about the ratio of women’s and men’s earnings, and figured I knew most of the story. The past few months I have been going merrily along pursuing job leads in preparation for graduation from my master’s program next month, without even considering how I personally might be affected by the wage gap. Surely, as a young woman with a graduate degree, my salary will be right up there with my male peers, right? Since I haven’t seen much difference in the jobs being pursued by and offered to my female and male classmates, isn’t it a given that we’ll be getting paid equally?

Then I began helping with the research at the Institute for Women’s Policy Research (IWPR) looking at trends in women’s earnings and labor force participation over the past few decades. First, I was surprised to learn that it wasn’t until 1984 that college-educated women earned as much as men with a high school diploma, and it took another seven years until they earned as much as men with some college education or an associate’s degree. Then, I saw the wage gap between men and women with at least a college degree—it’s the biggest gap between men and women at any level of education. And even though the gap for all workers in my age group (age 25 to 44) is the lowest in 30 years, it’s still almost 14 percent (according to IWPR’s micro data analysis of the Current Population Survey). Even when women get into highly-paid and fast growing sectors like science, technology, engineering, math (STEM) fields, they are paid 14 percent less than men—a much narrower gender gap than many other professions, but a gap nonetheless.

Yet, I know that I’m extremely lucky to be where I am. Women with low education and skill levels can not only expect to earn less than their male counterparts, but often struggle to make a livable salary. Men with poor literacy skills have substantially higher earnings than women with the same abilities. And even with higher literacy levels, women still face a wage gap.

Learning the statistics has shown me that the wage gap does indeed exist and impacts women’s earnings—even highly educated women.  It is important to be aware that the playing field might not be even and to inform policymakers about this persistent discrepancy in earnings. IWPR will be releasing an analysis of the latest data from the Bureau of Labor Statistics (BLS) on the wage gap with occupations.  Our research on pay equity will be discussed at an Equal Pay Day congressional briefing April 17 organized by the Fair Pay Coalition. If you can’t make the briefing, you can still stay informed on this issue by visiting our website.

Vanessa Harbin is a Research Intern with the Institute for Women’s Policy Research. She is currently completing her master’s degree in public policy at Georgetown University.

Living on a Dime: Small Wages and Large Gender Wage Gap in Restaurant Industry, According to Recent Report

By Margaret Kran-Annexstein

If I were to tell you that there are workers in the United States being paid $2.13 per hour, you’d probably tell me that that’s impossible because the minimum wage in this country is $7.25 and anything less is illegal. Well, you’d be right of course, but unfortunately, regulations on the tipped minimum wage have not kept up with the federal minimum wage.

In February, the Restaurant Opportunities Centers United (ROC-United), in conjunction with the Institute for Women’s Policy Research and a number of other organizations, released Tipped Over the Edge: Gender Inequality in the Restaurant Industry. Among its other findings, this report exposes the restaurant business as an industry that has found a way to skirt the federal minimum wage, exacerbate the gender wage gap, and further reduce the economic security of employees by not providing health insurance or paid sick leave to most workers.

In 1991, the tipped minimum wage was 50 percent of the federal minimum wage. However, when the federal minimum wage increased in 1996, the tipped minimum wage remained the same and has not been adjusted. Today, under the Fair Labor Standards Act, the tipped minimum wage remains at $2.13 an hour, less than 30 percent of the generally accepted $7.25 federal minimum wage. Although some states choose to raise that minimum, these regulations allow the restaurant industry to shortchange a vast number of its employees—a disproportionate number of whom are women.

As a student with many female friends working in the restaurant industry to help pay enormous tuition bills, I was disturbed by the findings of this report. The reality is that tipped workers often must rely on the generosity of their customers to make a living. Technically, employers are supposed to pay the difference if a worker does not make the minimum in wages plus tips but this requirement may not always be upheld or enforced. As one woman from Fort Worth, Texas testifies, “I can’t tell you how many times I made less than $20–$40 a day during the lunch rush…LOTS…I don’t understand how restaurants get away with not paying their employees minimum wage…”

Gender Segregation in the Dining Room

The notion that women and men should be paid equal wages is also overlooked due to hiring practices in the restaurant industry that solidify the gender wage gap. Female restaurant workers make on average 79 percent of what men do because women tend to hold the lower-paid positions in the restaurant world.

Women, especially women of color, hold a disproportionate amount of jobs in lower-paying restaurants while men dominate fine dining establishments—where wages can be 24 percent higher than wages in family style restaurants. Women who do obtain positions in fine dining are seldom hired as captains or martre d’s, the higher ranking, cushier positions with more supervising duties and less reliance on tips. One account from Tipped Over the Edge quotes a general manager refusing to hire a qualified women of color saying, “You don’t have the look to be a maître d’, but I can hire you as a hostess.”

There are laws that effectually set in stone wage inequality because these different ranks in restaurants hold different minimum wage requirements (the restaurant industry is one of the only sectors where you can find this discrepancy).

Many restaurant workers simply do not have enough money to support themselves: servers are forced to use food stamps at almost double the rate of the rest of the population. Rather than hold employers accountable to their staff, taxpayers have become responsible for the livelihood of many employed people through the size of their tips and the generosity of state programs.

“Try Not to Get Sick”

Not only do many restaurant workers receive painfully low wages, they often cannot afford to stay home when they get sick. In fact, ninety percent of restaurant workers lack paid sick days. One testimony from Tipped Over the Edge quotes a laughing manager telling a sick employee, who was concerned that if she did not go home she would make others sick, to “try not to cough.” Ninety percent of restaurant employees also lack employer-covered health insurance, making it even more difficult for them to seek medical care. Not only is this a violation of workers’ rights, it doesn’t make me feel very safe when I go out to try the best veggie burgers in DC.

My friends have to work in these unfair conditions but, unlike many restaurant workers, they have health insurance from their parents and are not providing for dependent children. For a single mother supporting a child on her own, Tipped Over the Edge shows that the restaurant industry can be a hostile work environment that lacks adequate living wages. Clearly change needs to come to the restaurant industry.

Margaret Kran-Annexstein is a Communications Intern with the Institute for Women’s Policy Research.

New Research from IWPR Finds Low Literacy Hurts Women More Than Men

By Kevin Miller

In an analysis of data from the 2003 National Assessment of Adult Literacy that was recently published, IWPR found that women earn less than men regardless of literacy level, but that women with low literacy levels are particularly likely to have low earnings relative to men. Higher literacy levels are associated with higher earnings for both men and women, but the “jump” in earnings from low to high literacy is especially noticeable for women at earnings levels that can sustain women and their families.

These findings are consistent with the phenomenon that women need to do more to reach the earnings of men. The gender wage gap remains substantial after decades of measurement, occurs both between and within occupations, and—we now know—exists regardless of men and women’s degree of literacy. In order for women to earn the same amount as men, they must obtain more education and develop more skills than those possessed by men. Low literacy—which occurs at similar rates among women and men—is a barrier to effective education and training that can help low-income individuals obtain jobs that allow for family economic security.

Programs that help women (and men) improve their literacy, obtain job training, and get degrees are key elements in the effort to help low-income Americans get better jobs. Adult and basic education programs, bridge programs that connect teens and adults to college, workforce training programs, and supports for nontraditional students enrolled in colleges are needed to help hard-working Americans get higher-paying jobs. Many of these programs are under threat of budget cuts. Cuts in education and training are short-sighted cost-saving measures that reduce workforce readiness while also threatening one of the few pathways out of poverty for millions of Americans with limited literacy.

Kevin Miller is a Senior Research Associate with the Institute for Women’s Policy Research.

Author Finds Technology a Tool Not a Solution in Bridging Divide

By Leah Josephson

People often describe the “digital divide” in terms of high-income individuals’ having access to cutting-edge technology that helps them thrive socially and economically, while low-income individuals are left out. The divide is often cited as a significant source of economic inequality.

At a recent event at Busboys and Poets, Dr. Virginia Eubanks, author of Digital Dead End: Fighting for Social Justice in the Information Age, critiqued this diagnosis as overly simplistic. The event was co-sponsored by the Institute for Women’s Policy Research, Teaching for Change, and DC Jobs with Justice.

Eubanks worked with a group of low-income women who are members of the YWCA community in Troy, NY, and asked the women what they needed. The main problem was not the digital divide. Instead, “more buses, less racism, and fairer employment” were the most popular calls for help.

Eubanks expected these women to have few technological skills. Instead, she found two-thirds of them already working in high-tech jobs, such as data entry or network administration. However, these jobs were low-paying, had few benefits, and were unstable. Technology was ubiquitous in their lives, but they could not use it to improve those lives.

Eubanks realized that simply providing technology and training is not enough to improve women’s lives. Rather, projects need to be designed to account for deeply ingrained racial and gender oppression.

Eubanks, informed by the belief that those closest to problems can best find solutions, worked closely with the women to identify their needs. They created a community technology lab for the YWCA, staffed and sustained by residents, as well as what Eubanks called an “Angie’s List for social services providers,” where the women could provide feedback on their experiences at local assistance agencies.

Even so, access to tech tools was not a high priority for the women. They were more concerned with the basic structural and cultural challenges that affected them on a daily basis—a lack of reliable transportation and workplace flexibility, coupled with racist attitudes.

Eubanks emphasized that technology in itself cannot cure these problems, but it can play a positive role. “We all have a stake in the creation of a more just information age,” she said.

Eubanks noted the creation of new, high-end jobs in technological development—touted by politicians including President Obama as the solution to our country’s economic woes—requires the support of more service industry positions in food service, hospitality, and retail. These lower-income jobs must be fair, provide benefits, and allow for work-life balance to meet the needs of workers.

IWPR has identified other basic benefits that can drastically improve the quality of workers’ lives in the shorter term. For women and their families, guaranteed paid maternity leave (the U.S. is one of only five countries worldwide that doesn’t require employers to provide it) and paid sick days could improve health, well-being, and economic stability.

Pay equity is another problem Eubanks identified. The women would often accept minimal compensation for high-tech jobs, hoping to gain the skills necessary for a higher-paid position. In a society where open discussion of salary is often taboo, these women had little opportunity to identify and express grievances, and only rarely advanced in the workplace.

“Technology is not a destination, it’s another site for struggle,” said Eubanks. In making technological advancements we should consider the quality of life of the workers who perform and enable it. Technology can contribute to a more just society, as long as the privileged consciously use it as a tool to support social justice, and not a ready-made engine of social progress.

Leah Josephson is the Communications Intern at the Institute for Women’s Policy Research.

Putting the Pieces Together: How Social Security Supports Black Women

by Mallory Mpare

The longer Social Security remains on the table for cuts as part of a comprehensive debt reduction plan, the more nervous those close to the program should be. And with good reason. Social Security was conceived as a protection against the risks—such as disability or lack of employment at older ages –that might lead to poverty. It is meant to work in conjunction with other retirement plans or savings as a critical piece of a comprehensive economic security plan. In the aftermath of the Great Recession and in the midst of economic recovery—when unemployment is high (9.1 percent unemployment as of May 2011)— it seems an especially inopportune time to discuss actions which might make people even more vulnerable to the very circumstances Social Security protects against.

While Social Security has benefited men and women of all racial and ethnic backgrounds and income levels, the impact of proposed cuts to Social Security on women of color is particularly troubling. Black women experience higher rates of poverty, are concentrated in low-wage jobs, have fewer employee benefits, and are less likely to work in jobs covered by pensions. This combination of circumstances makes black women particularly vulnerable to economic insecurity at older ages.

Following a fact sheet on the importance of Social Security to Latinas, IWPR released a fact sheet that describes the critical role Social Security plays in the lives of many black women. To begin with, the Social Security benefits received by black women are modest. Black women over the age of 62 average $961 per month in benefits as retired workers. Still, Social Security is the most common source of income for black women aged 62 and older—received by 49 percent of black women aged 62–64, 83 percent aged 65–74, and 88 percent of black women 75 years and older. In fact, a solid majority of black women aged 75 and older rely on Social Security for at least four-fifths of their income.

What would happen to these women if Social Security disappeared? Simply put, without the income received from Social Security many more black woman would live in families or as individuals with incomes below the poverty threshold. If you think this is an exaggeration (as some must, considering the attacks on the program), think again. Even with the program as it stands today, more than one in four black women aged 75 and older lives with an income below the poverty threshold. Without Social Security benefits, six out of ten of these women would live in poverty. When we talk about Social Security beneficiaries, images of the elderly are easily brought to mind. However, 26 percent of black women who receive Social Security do so not by consequence of reaching retirement age, but because of disability. This contrasts to the 12 percent of white women and 14 percent of all adult women combined who receive Social Security benefits due to disability and not age. In other words, for disability benefits alone Social Security is especially important to black women.

It is hard to tell when attacks on Social Security will stop. One thing is for certain: the puzzle of economic security is incomplete without a strengthened Social Security program.

Mallory Mpare is the Communications Fellow with the Institute for Women’s Policy Research.

Young Women Need Paid Sick Days (Too)

by Claudia Williams

While some workers lacking paid sick leave can take time off without losing pay, many lose pay when they are out sick and cannot afford to take a single day off. This is particularly the case for young women. At an early stage in their careers, many younger women workers are living day to day and others juggle multiple jobs to make ends meet.  With limited wealth and savings, a large debt from college or even a steady income, younger women often find themselves between a rock and a hard place when illness strikes. Younger women are often not in a position to take lower pay when sick, especially when medical expenses are involved.

While part-time and low-income workers’ concerns are widely discussed, the needs of younger workers are almost unheard of, as it is usually assumed that their health status—without the burdens of chronic health conditions and age—is excellent, and that they don’t yet have care giving responsibilities.

Data from the National Health Interview Survey (NHIS), however, shows that young workers need paid sick days just like everyone else. In fact, of those private sector workers that reported having fair or poor health, 30 percent were 35 years or younger and a larger portion were young women (18 percent compared to 12 percent for young men). The same data show that a majority of young workers lack paid sick days; only 37 percent have paid sick days, compared to 58 percent of all workers.

Across the board, younger workers have limited access to paid sick days, no matter what they do for living, what their schedule looks like, or the size of the business they work for. For instance, whether young workers are employed in high-end jobs like legal occupations or in lower paying occupations like  health support, data from the NHIS show that only one out of five workers with paid sick days in those occupations are  between 18 and 35 years old.

For younger workers concentrated in traditionally low-income occupations or small businesses, the picture is even grimmer. Along with part-timers, these workers are most often afflicted, and women are overrepresented in this type of work arrangement. The outlook is especially challenging for young women with care giving responsibilities on top of lower earnings: paid sick days are even more essential for them to to stay afloat. For single mothers, usually with limited resources and often living in poverty, having paid sick days can make a big difference when medical problems arise.

Paid sick days are essential to all workers, but even more so to those with limited resources, including younger workers who are more vulnerable and have fewer resources than many of their older counterparts.

Claudia Williams is a Research Analyst with the Institute for Women’s Policy Research.

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