The U.S. Gender Pay Gap Impacts Women throughout their Lives

Last Tuesday, March 8th, we celebrated International Women’s Day, recognizing the leadership and accomplishments of women around the world.?So, there is more than a little irony in the fact that just one week later, Tuesday, March 15th, is #EqualPayDay here in the United States. And this, I’m afraid, is not a cause for celebration, because Equal Pay Day represents just how far into the new year the average American woman would have to work before she earned the same amount that the average American man was paid last year.

On average, a woman in the United States earns 80￠ for every $1 earned by a man, but that gap widens considerably once race and ethnicity are considered. Black and Latina women earn only 59% and 49%, respectively, of the amount earned by white men. The stark reality of that earnings gap is bad enough, but this earnings differential is the driving force behind a pernicious economic inequality that follows women throughout their careers.

?US women are graduating from universities at higher rates than men and, consequently, hold two-thirds – a total of $929 billion – of outstanding student debt. Salaries are roughly equal at graduation, but within only four years, earning disparities begin to emerge between men and women. Women’s smaller paychecks leave them with less income to retire debt than their male counterparts.??

As a woman’s career progresses, breaks in employment history to take on the unpaid care of children or elderly relatives wreak havoc on her earning potential. Women spend an average 6.2 hours each week on domestic chores in addition to child and elder care. The dollar value of that time is estimated at 30% of US GDP – or it would represent that amount if unpaid care were considered in the calculation of GDP! As women approach the end of their careers, a lifetime of lower salaries results in significantly smaller Social Security benefits and retirement savings. This, even though women are more likely than men to work for employers who offer some type of retirement savings plans. However, women are less likely to be eligible for these plans because of part-time employment. As a result, women face the cruel financial conundrum of living longer on lower retirement savings; women are 80% more likely than men to live in poverty at age 65 and three times more likely at age 75.

Recent progress in closing the wage gap obscures the impact of another, less-frequently-reported structural inequality: the wealth gap. Single women own only 40% of the assets owned by men; that ownership figure plunges to 8% and 2% for Latina and Black women, respectively.?Women of color, in particular, were targeted for subprime mortgages prior to the 2008 financial crisis, despite their eligibility for lower interest rate loans thanks to higher average credit scores. Although the worst of the predatory mortgage lending practices have been addressed, women on average still pay more for mortgages than men despite consistently better repayment rates. Other drivers of wealth accumulation such as business ownership present a notoriously uneven playing field, with women entrepreneurs receiving only 3% of venture capital funding.

Today, on Equal Pay Day, let’s just sit with this admittedly depressing data and call it what is: unfair, unjust and long overdue for correction. Then, once you’re good and mad, come back to this page for my next article, where I’ll talk about some exciting changes that are already taking place.