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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.

The Real Value of In-Home Care Work in the United States

Care worker with elderly womanBy Caroline Dobuzinskis

Baby Boomers, estimated at nearly 80 million in the United States, began turning 65 in 2011.By 2020, the population of older adults is expected to grow to 55 million from 40.4 million in 2010. As more women enter the labor force and fewer are able to care for older family members, providing in-home care to the growing aging population, as well as the disabled and chronically ill, is becoming more critical to a robust U.S. economy.

A new briefing paper by IWPR, “Women and the Care Crisis: Valuing In-Home Care in Policy and Practice,” outlines these challenges but emphasizes that, despite the growing demand, in-home care work jobs continue to be undervalued and underpaid.

While often working long hours to care for others, many in-home care workers cannot afford to take care of their own needs. According to IWPR’s analysis, the median weekly earnings for all female in-home care workers are $308, compared with $560 for all female workers in the U.S. workforce. In-home care workers are also excluded from coverage by the Fair Labor Standards Act, the federal law that helps ensure basic standards of living for U.S. workers by requiring employers to pay minimum wages and provide overtime compensation.

The general lack of value placed on paid care work is due to a number of complex factors. Research suggests that what is seen as traditionally women’s labor, at all skill levels, reaps lower economic rewards. The simple fact that the majority of paid care work is performed by women could contribute to its lower average wages. Care work also blurs the lines between formal and informal labor, which can result in the workers being perceived as part of the family and make it more difficult for them to set boundaries that define the requirements and terms of their jobs.

Many in-home care workers are immigrants who may lack pathways to legal status, leaving them vulnerable to low levels of pay and to abuses from employers. According to IWPR research analysis, 90 percent of home health care aides in the United States are women, 56 percent are women of color, and 28 percent are foreign-born with the vast majority (60 percent) migrating from Latin America and the Caribbean. Despite the fact that these immigrant workers are filling an essential labor gap, many remain undocumented and without clear access to citizenship or visa status. Many domestic worker and immigrant groups are waiting to see if Congress will address this issue.

Among the recommendations in IWPR’s report, Increasing Pathways to Legal Status for Immigrant in-Home Care Workers (published February 2013), is an increase in the number and types of immigration visas available to immigrant care workers to help fill the labor shortage in the U.S. industry. The most recent immigration deal being crafted the “Gang of Eight,” a bipartisan group of U.S. senators tasked with finding immigration reform solutions, includes an option to provide temporary work visas to undocumented immigrants performing essential, low-skilled labor.

IWPR’s briefing paper, “Women and the Care Crisis: Valuing In-Home Care in Policy and Practice,” proposes several changes that would improve circumstances for all care workers and recipients, as well as the industry as whole, including:

1. Encouraging public dialogue about the growing need for care work and the skills and contributions of those who provide in-home care

2. Improving estimates of the value of unpaid care work and making the public more aware of this work’s critical importance to the nation’s economy.

3. Implementing public policies that affirm the value of care work and those who provide it.

4. Creating more quality in-home care work jobs that will improve the employment prospects of the female workforce, help to reduce inequality, and strengthen the U.S. economy overall.

Many groups and organizations, such as Caring Across Generations, support improved workers rights for care workers nationwide. New York State passed a law entitling domestic workers to, among other provisions, a minimum wage, pay for overtime hours, one day of rest for every seven days, and at least three paid leave days per year after one year of work for the same employer. Further policies are still needed that affirm the value of care work in order to reduce the inequality in wages for these workers and strengthen the U.S. economy overall.

Caroline Dobuzinskis is the Communications Manager with the Institute for Women’s Policy Research. 

Literacy, Women, and the Workforce Investment Act

This blog was originally posted on the Workforce Innovation Team blog. In honor of March being Women’s History Month 2012, the Workforce Innovation Team has reached out to their partners who specialize in women’s needs and promoting positive public policy. 

By Jane Henrici

The Institute of Women’s Policy Research (IWPR) released in February our fact sheet showing our gendered analysis of the most recent (2003) National Assessment of Adult Literacy (NAAL) data. We find that low levels of literacy tend to hurt women’s earning levels more than those of men: “…women need higher levels of literacy than men to earn wages that are comparable with men’s.”

To address this issue, IWPR recommends that educational policies and programs take gender into account and consider adult education and literacy classes as of particular help to women, especially those with dependent children. IWPR research on women’s educational levels, workforce participation, and immigration integration, also finds a need for improved and targeted remedial and bridge opportunities, English language classes, and job training that will help women get better jobs and careers—including those at the highest levels of wages, in STEM fields. Like others with whom IWPR is partnered, particularly in our research on student parents as part of IWPR’s Student Parent Success Initiative, we see reauthorization of the Workforce Investment Act (WIA) as an opportunity for learning and training that responds to the needs across the different states to help prepare women workers for employment demands.

To get out of poverty, women must be able to earn enough to take care of themselves and their families and, to do that, women need to have the skills to begin careers and then move up in fields where jobs are growing, including those in the health and care work occupations. At a minimum, women are going to need to be able to read and, increasingly, they are going to need a postsecondary education and possibly a postsecondary degree. A number of public as well as private efforts, including WIA programming, can help women to get started.

Do you think WIA programming is key to addressing the inequality gap that women still face in today’s workforce?

Jane Henrici is a Study Director with the Institute for Women’s Policy Research.

Wal-Mart in Trouble, Yet Again

The world’s largest private employer is feeling the heat for myriad reasons. All you ever hear about Wal-Mart these days is a plethora of criticisms. From their shortcomings in providing adequate healthcare for employees, to Wal-Mart’s effect on the environment, to the adverse effects on the communities where Wal-Marts open — we’ve heard it all. From a legal perspective, at present there are a slew of lawsuits pertaining to discrimination and violation of wage & labor laws.
Over 50 members of Congress have asked that Wal-Mart disclose information about its wages for Congressional review to assess whether gender biases in wages exist. In September 2006, a class-action suit was filed against Wal-Mart contractors concerning sweatshop conditions at their overseas sites. Aside from Wal-Mart’s practices abroad that allow the retail conglomerate to have such competitive prices, there are plenty of domestic concerns to discuss that are raised on a regular basis. Last week proved no exception. On February 6, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s decision in Dukes v. Wal-Mart, certifying a class action suit against Wal-Mart alleging sexual discrimination under Title VII of the 1964 Civil Rights Act.
A case that began with six female Wal-Mart employees in June 2001 has the possibility to become the largest civil rights case in history. The plaintiffs allege that Wal-Mart discriminates against women in wages and promotions. The class, which is the single item in contention, includes all women employed at any Wal-Mart since December 1998, “who have been or may be subjected to Wal-Mart’s challenged pay and management track promotions policies and practices.” This case covers at least 1.5 million women in approximately 3,400 stores, making this case monumental.
Evidence supporting the plaintiff’s case that women are not getting the same pay for the same work & are getting fewer promotions is convincing. According to Richard Drogin, the statistical analyst hired by the plaintiffs, it takes women an average of 4.38 years from the date of hire to be promoted to assistant manager, while it takes men 2.86 years. The average salary of a female manager is $89,280, compared to $105,682 for male managers. For workers receiving an hourly wage, women make 6.7% less than men in comparable positions. Additionally, Wal-Mart’s total workforce consists of 72% women, yet women hold only 33% of its managerial positions. Ninety-two percent of Wal-Mart’s cashiers are women, but only 14% of store managers are women. These figures are most certainly striking.
The women filing suit against the world’s largest retailer are hoping that the case will go to trial, and so am I. Employers in this nation have gotten away with discrimination in employment for far too long.
- Layla Moughari, IWPR Research Intern

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