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Equal Pay for Working Women would Boost the Economy

On the fifth anniversary of the signing of the Lilly Ledbetter Fair Pay Act—a bill that reinstated women’s ability to contest unlawful pay discrimination and was the first bill signed into law by President Obama—analysis from the Institute for Women’s Policy Research (IWPR) finds that the poverty rate for working women would be cut in half if women were paid the same as comparable men, and that greater pay transparency would increase women’s pay.
Equal Pay for Working Women would Boost the Economy

Equal pay would reduce poverty by half

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Jan 29, 2014

Washington, DC— On the fifth anniversary of the signing of the Lilly Ledbetter Fair Pay Act—a bill that reinstated women’s ability to contest unlawful pay discrimination and was the first bill signed into law by President Obama—analysis from the Institute for Women’s Policy Research (IWPR) finds that the poverty rate for working women would be cut in half if women were paid the same as comparable men, and that greater pay transparency would increase women’s pay.

Nearly 60 percent (59.3 percent) of women would earn more if working women were paid the same as men of the same age with similar education and hours of work. The poverty rate for all working women would be cut in half, falling to 3.9 percent from 8.1 percent. The high poverty rate for working single mothers would fall by nearly half, from 28.7 percent to 15.0 percent. For the 14.3 million single women living on their own, equal pay would mean a significant drop in poverty from 11.0 percent to 4.6 percent.

Persistent pay discrimination for women translates into lower wages and family income in families with a working woman. The gender pay gap also affects the economy as a whole: in 2012, the U.S. economy would have produced additional income of $447.6 billion (equal to 2.9 percent of 2012 GDP) if women received equal pay.

“Unequal pay for women has had a negative effect on women and men, alike,” said IWPR President Heidi Hartmann, Ph.D. “Paying women fairly for their work would go a long way in reducing poverty and giving the economy the jump start it needs.”

“Today, too many workers are discouraged from sharing the pay information that would give women the tools they need to challenge pay levels,” said IWPR Vice President and Executive Director Barbara Gault, Ph.D.

Nearly half of all workers are either prohibited or strongly discouraged from discussing their pay with their colleagues. The gender wage gap in the federal government—with high levels of pay transparency—is only 11 percent, compared with 23 percent nationwide.

The Institute for Women's Policy Research (IWPR) is a 501(c)(3) tax-exempt organization that conducts rigorous research and disseminates its findings to address the needs of women and their families, promote public dialogue, and strengthen communities and societies.

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