All Articles Tagged "wage gap"
Race seems to trump education when it comes to what Blacks earn in the workplace. Black workers who have advanced degrees and White workers with merely B.A.s make about the same salary, according to a new study released by the Bureau of Labor Statistics.
“In 2014, while white workers 25 years or older with at least an undergrad degree took home median earnings of $1,219 per week, similarly aged and educated Latino workers made $1,007, and Asian workers made $1,328 per week. Black workers with at least a college degree, meanwhile, posted median earnings of $970 per week,” reports Colorlines.
The gap got larger for more educated Black workers. Black workers who have an advanced degree earned $1,149—this is about the same as white workers who had only a bachelor’s degree ($1,132).
The numbers for 2014 were shocking but according to Colorlines writer Kai Wright, the wage discrepancy is an ongoing problem. In June, she wrote: “This is an inequity that grows from tangled roots—historic labor market discrimination, ongoing residential segregation, stubborn racial biases among employers. But it’s also one with consequences that stretch out beyond the men themselves, and that will linger long past today’s troubled economy.”
The racial income and wealth gap is a problem that’s getting more and more attention the more stats arise showing how wide it truly is. About a year ago, we wrote about how the gap between Blacks and Whites had tripled between 1984 and 2009. More recently (last month) the Pew Center reported that Whites have a media net worth 13 times greater than Blacks ($141,900 vs $11,000). The most recent Census numbers (September) found that while a White woman on average makes 78 cents for every dollar a man makes, Black women only make 64 cents. And overall, Black workers are hurt by high unemployment rates.
There has always been a discrepancy between the races on various lifestyle levels–from housing to education. So of course there is a gap in wages. But the gap also affects women, and more so women of color. According to The Simple Truth about the Gender Pay Gap, a report by The American Association of University Women, which promotes equity and education for women and girls, found that Asian American and white women had higher weekly take-home pay than African American and Hispanic or Latina women did in 2012.
“The gender pay gap was smallest within the African American, Hispanic/Latina, and Native Hawaiian/other Pacific Islander full-time workforce. But compared with white men (the largest group in the workforce), African American and Hispanic/Latina women fare poorly,” reports AAUW. African-American women receive a salary of 89 percent of what African-American men are paid and just 64 percent when compared with white men.
But there are some places in the United States where the gap is even more prevalent for minorities. The largest wage gap for Black women is in Louisiana. For Latinas, it’s California. D.C. was second to last, with a 46.1 cent gap for Black women.The Washington Post
To see the wage gaps by state according to NWLC, click here.
Michael Gomez Daly, a self-described “very light skinned Hispanic,” is a field director for political campaigns. When he applies for jobs using his full name, he’s offered one salary. When he didn’t mention he was Latino and removed “Gomez” from his name, Daly was offered twice the salary for the same job. One’s race, The Daily Beast concludes, is a major deciding factor of your earnings in the political campaign game. If you’re a minority, expect much less.
Black staffers in Democratic political campaigns were paid 70 cents for each dollar White workers made, according to the New Organizing Institute, which took a look at the 2012 election. Hispanic workers got paid 68 cents on the dollar. The Daily Beast says that people of color are commonly pigeonholed into “minority outreach” positions, which pay significantly less.
Take Daly for example. For his first congressional campaign job, he announced that he was Hispanic and he has thrown into a box as a “Latino operative”; he was hired to appeal to the Hispanic community. But for his second campaign, he was paid twice as much. “I just came in as ‘Michael Daly,’ instead of ‘that Latino operative,’” he said.
“It was pretty clear to me early on that you can get put in a box pretty quickly. You get offers for jobs: African-American outreach, Asian-American outreach. Oftentimes when you start doing that work, it’s hard to get out of it,” Sujata Tejwani, president of Sujata Strategies, a Democratic firm, said.
Workers of color are shackled by the notion that minority voters are more inclined to support candidates who look like them. Blacks, Asians, and Latinos, in turn, are shoved into lower-paying positions.
“There’s a presumption that white voters won’t like to see a black press secretary, or that white voters won’t want to see an African-American or Latino political director,” Jamal Simmons, a Democratic political operative, said. That, Simmons adds, is prejudice based on obsolete beliefs on race relations.
The real money is in data, polling, research, statistics and the like. And as you might have guessed, Whites dominate the field. “The problem is: they don’t hire African Americans, Latinos in the parts of the campaigns where they spend the most money,” Simmons added.
Unfortunately, it seems like people of color are often hired to be the mascot. “Hey, do a little song and dance to get ‘your people’ on our side!” Experienced operatives say that “the path to enduring success lies in saying ‘no’ to jobs like that early on in your career,” The Daily Beast says.
For single moms, economic mobility is an uphill battle. Employers hesitate to hire ‘em, child care costs are through the roof, and saving is damn near impossible — I mean it is tough! Single moms, compared to married mothers, are more likely to kiss their dreams of prosperity and wealth goodbye.
“Married mothers earned a median family income of $80,000 in 2011, almost four times more than families led by a single mom,” according to an op-ed piece entitled The Mysterious and Alarming Rise of Single Parenthood in America. Yikes!
Aparna Mathur, co-author of the op-ed piece and resident scholar of the American Enterprise Institute, spoke with MadameNoire to lay down the facts about single motherhood and wealth.
MadameNoire: So why are single mothers more likely to be poor?
Aparna Mathur: First, in terms of demographics, data from Pew suggest that single mothers are more likely to be younger, less educated and Black or Hispanic. Married mothers tend to be older and are disproportionately White and college-educated.
…More than 80 percent of married mothers have jobs but only 60 percent of single-mothers have full-time jobs. One possible reason for this is that single moms have to raise their children alone and bear the costs of child care by themselves. As a result, they often choose jobs with non-standard schedules. These kinds of work schedules are associated with lower earnings and fewer promotions, since employers do not find it in their interest to invest in training these workers.
…Our analysis using data from the Current Population Survey shows that for [married and single] women without children, the difference in incomes in 2012 was a meager $857. However, for married and single mothers, the difference was $19,000—which is pretty striking.
MN: According to the Organisation for Economic Co-operation and Development (OECD), Blacks are disproportionately unwed mothers; 72 percent of Black children are born to single mothers. Why?
AP: Marriage rates have fallen for both Blacks and Whites since the 1960s, but have fallen much more sharply for Blacks. As a result, as per data from the Census Bureau, 55 percent of Black children live in single-parent homes relative to 21 percent of Whites. I believe one big reason for this is the high rate of teen pregnancies amongst Blacks relative to other racial and ethnic groups. As a result, many more girls become single mothers at a young age, which leads to poor life outcomes, in terms of education and earnings.
Research also suggests that when women or girls grow up in disadvantaged families and where they perceive a lack of economic opportunity and advancement, they are more likely to settle for having babies outside of marriage.
MN: On MadameNoire, we published an article about IBM executives who revealed that they did not want to hire young women because they’ll get “pregnant over and over again.” Does gender bias in the workplace thwart a single mother’s career mobility?
AP: …There are several reasons why single mothers have a lower trajectory of earnings and promotions. A lot has to do with their inability to take up full-time jobs since they are the sole guardians for their children, and the costs of childcare have increased tremendously in recent times. However, some of it is also likely to be a consequence of employers being reluctant to hire women who will take time off for having kids. While this could show up in the gender wage gap if employers adjust by paying women less, this kind of discrimination is hard to prove, since there are so many factors that could explain wage differences. In fact, some studies suggest that the wage gap all but disappears if we control for the significant factors, such as education level, occupation and experience.
A more likely factor is that single mothers are constrained in their job choices, and the costs of childcare are prohibitive, further limiting their work schedules.
MN: Is the argument that single mothers are “not employable” valid or unfounded?
AP: I think there is some truth to the statement that employers may be more reluctant to hire women who are likely to take time off for maternity leave and other child-rearing responsibilities. However, I would think that instead of not hiring single mothers at all, employers would compensate for their loss of productivity during periods of maternity leave, by making other adjustments, such as adjusting wages downward or not providing other benefits. Clearly a lot would depend upon their cost-benefit calculation. For highly educated and productive women, these issues are less of a concern for employers as well.
MN: What other factors can hinder a single mom from saving and wealth building?
AP: To begin with, single mothers have lower incomes and lower earnings potential due to relatively low levels of education, which results in lower lifetime earnings, leading them to save less and build up less wealth. This is particularly true in the case of teenage moms, who often do not pursue an education once the child is born. On those low incomes, they have to sustain running a household, meeting rental, car, grocery and other expenses. Second, they have to support their children’s education and health care expenses all on their own income, which leads to lower levels of savings. With poor incomes, they are unlikely to build up much in terms of social security contributions, and therefore have lower levels of social security at the time of retirement…
MN: Single mom Shanesha Taylor, who left her two kids in a hot car to attend a job interview, made national headlines. What’s your take on Taylor’s daunting experience?
AP: Shanesha fits our image of a typical low-income single mother, trying to make ends meet. Life is a struggle with meeting expenses, looking after children and providing for their education. Shanesha wanted to improve her life by getting a job, but even showing up for the job interview proved to be a struggle. I have a lot of sympathy for her and women in her situation who feel trapped by their economic and social circumstances, but are hoping against hope for an opportunity to transform their life.
In my study with my colleague Abby McCloskey, […] one of the things we talk about is reforming the system of child care support that exists in the current tax code. In particular, we talk about expanding the size of the child care tax credit and making it refundable. The child care tax credit provides a credit for families to help meet their child care expenses. Currently, the size of the credit is low relative to average costs of child care and it has not been expanded since the 1980s. Also, it is not refundable—in other words, if a tax filer does not have a tax liability, they don’t get the advantage of the tax credit. This leaves many low-income women out of the system. Our proposal would help low-income women access the credit and offset more of their child care expenses, enabling them to enter the workforce more easily.
MN: What do you say to young women who say, “Marriages fall apart, too. A piece of paper and a ring doesn’t help!”
AP: While single mothers fare worse in the labor market than married mothers, I think the solution to improving economic mobility begins before you enter the labor market. The strongest predictor of high mobility is investments in education—completing high school, going to college or technical or vocational school. That is key. Unemployment and poverty rates are highest for individuals with low levels of education. So go to school and get trained! The older the ages at which women get married, the higher their education levels, the more stable are the families and the higher the earnings potential of the family.
MN: Lastly, for women who are single moms, are there solutions to improve their financial standing?
AP: High levels of education are the biggest hedge against poverty and unemployment. All other solutions are secondary. The social safety net is a last resort! For low-income women, there are government programs like the Earned Income Tax Credit that have been successful at getting them to enter the labor market. These could be expanded. The child care tax credit should be expanded to enable them to meet expenses of child care while staying employed. I personally do not believe that the government should force employers to offer paid maternity leave, since that could impose costs on businesses and make them more reluctant to hire women who will avail of these benefits.
This interview has been edited and condensed for clarity and length.
And for more information about single Black motherhood, check out the Moguldom Studios film “72 Percent,” available on iTunes, Google Play and Amazon DVD. Click here for the trailer. Purchase your copy today!
The latest job numbers continued the gains we’ve seen in past months, but the final tally was markedly lower. In July, 209,000 jobs were added to the US economy, versus 298,000 in June. While the number is disappointing, taken from a wider view, 1.5 million jobs have been added in the past six months, the strongest figures since 2009. That includes a small comeback in the manufacturing and construction areas, which were hard hit when the housing market collapsed.
“Jobs in these sectors tend to offer middle-class wages. The recovery is no longer dominated by hiring for low-wage retail and restaurant jobs,” writes CNNMoney.
Nearly nine million jobs were lost during the recession, according to numbers provided by the site.
Still, there are roadblocks to this recovery. The unemployment rate actually went up a touch, from 6.1 percent to 6.2 percent as job seekers, seeing encouraging signs, decided to resume the search for work.
Then there’s the fact that the job gains are not evenly spread. For Blacks, the unemployment rate jumped from 10.7 percent up to 11.4 percent between June and July. Then you have the persistence of the wage gap, which impacts everyone, but some groups more than others.
“Women of color across the U.S. face a wage gap affected by both gender and race. An African American woman working full time, year-round, makes on average a whopping $18,650 less each year than a white man working full time, year-round,” reads The Huffington Post.
And the repercussions of the wage gap are felt well into our golden years.
“Because retirement savings are ever more closely tied to income, the widening gulf between the rich and those with less promises to continue — and perhaps worsen — after workers reach retirement age,” reports the Associated Press. “That is likely to put pressure on government services and lead even more Americans to work well into what is supposed to be their golden years.” The average Social Security payment last year was about $1,300 per month. And retirement savings is dropping as fewer people participate in savings plans, in some cases because just living from month to month is a struggle.
Finally, the wages themselves haven’t increased by a significant amount — only a penny an hour in July to $24.45. Overall, wages have gone up two percent in the past year, not enough to keep up with the rising costs of food, student loan repayments, and the other necessities of life.
A CNN/ORC International study released on Friday found that 41 percent of people rate the economy as “good” while 58 percent say it’s “fair.” So people realize that while things are improving, we’re not out of the woods. (Though the one percent seem to be doing just fine.) It’s forecast that the economy will play a big role in who gets elected in November, and the minimum wage question will continue to be debated as one solution for what financially ails the country.
The general public usually gets outraged when they hear about exorbitant executive salaries, particularly for companies that aren’t doing very well. California is now trying to take action against the ever-expanding salary gap between CEOs and employees with a process to ban “out of whack” CEO salaries.
A new bill that will do just that is in the state Legislature with support from Democratic leaders, organized labor and former U.S. Labor Secretary Robert Reich, reports The Huffington Post.
According to Reich, the bill would reward “responsible” companies by giving them lower tax rates and ultimately help the middle class by boosting the U.S. economy.
Under bill SB1372 companies that pay CEOs more than 100 times the median wage of their workers would have to pay a higher corporate tax rate. But on the other hand, firms with a smaller wage gap would benefit from a lower rate.
Currently the tax rate is 8.84 percent of net income for all corporations. For cooperating companies it would be dropped down to 7 percent and for offending firms it would be increased to 13 percent .
Of course there is opposition to the bill. According to the California Chamber of Commerce, the proposed bill would cause cost jobs. “Chamber lobbyist Jennifer Barrera told the committee the bill would discourage corporate investment in California,” reports HuffPo.
And Gina Rodriquez, the California Taxpayers Association’s vice president for state tax policy, claimed it would make California appear hostile to business.
The naysayers might be jumping the gun. Even the authors of the bill aren’t sure of its passage since it will need a two-thirds super-majority, which seems unlikely since Republicans are expected to vote against it.
Still the Dems say such a bill, the first of its kind in the nation, is important and necessary. AFL-CIO data shows that chief executives received an average compensation of 43 times the median U.S. worker’s pay in 1983. And the gap is a whole lot bigger today — 278 times a typical wage. There is even more proof of the gap. The CEOs of companies listed in Standard & Poor’s 500 index received an average of 354 times more in salary than the median employee in 2012.
“The issue of widening inequality of income and wealth and opportunity and political power is one that the United States is now becoming aware of because things are getting so out of kilter,” Reich said to the Senate Governance and Finance Committee.
Update: The Paycheck Fairness Act went before the Senate today and Republican plans to block it were successful. The bill was halted for a third time by a vote of 53 to 44. The bill would’ve prohibited retaliation against staffers who discuss their pay and require the Labor Department to collect wage data based on sex and race.
Saying the bill is “unnecessary,” the GOP argues that the bill is unnecessary, will lead to lots more litigation rather than pay equity, and claim that Senate Majority Leader Harry Reid (D-NV) has a grip on the Senate that won’t allow alternatives into the discussion. The party is risking bad press; the block will be framed by Democrats as another in a list of offenses in the Republican “war on women.” But the Republicans say the Dems have been lining up a number of bills to present to the government body that have no chance of passing just for the political capital they can gain in an election year.
Republicans have charged Sen. Deb Fischer (R-Neb.) with presenting their version of equal pay legislation.
Original story: April 8, 2014
Today is Equal Pay Day and President Obama used it as an opportunity to one again highlight the need to pay women equal pay for equal work. He signed an executive order that will force federal contractors to discuss pay with one another, bringing to light any differences. And information about pay, based on sex and race, will now have to be reported to the Labor Department. At a time when women are still being paid 77 cents for every dollar a man earns, this is a necessary step in the right direction. Moreover, white men in the US make 36 percent more than African-American women.
“President Obama’s executive action on pay equality had significant political overtones ahead of a planned Senate vote on the so-called Paycheck Fairness Act,” reports ABC News. The President and the Dems will seek to paint the pay issue as one more area where the GOP is out of touch with the needs of women.
“The Democrat-sponsored legislation would require all employers to prove differences in pay are not based on gender, would force them to allow employees to talk publicly about their wages, and allow lawsuits for punitive damages in cases of alleged sex discrimination,” the article continues.
Still, the President was forced to face the fact that women working in the White House are making, on average, 88 cents for every dollar that male staffers make.
“Men and women in equivalent roles here earn equivalent salaries,” Press Secretary Jay Carney said today. He noted that that average figure brings into play the salaries of women in lower positions. Still, he noted, there are women serving in high positions such as homeland security advisor, White House counsel, and deputy chief of staff.
Carney brings up a good point that goes beyond the White House: women need to get into higher paying jobs. Nearly two-thirds of jobs in the US pay less than $20 per hour, and many of those jobs — administrative assistants and health care aides, for example — are held by women.
A Pew Research survey shows that the majority of women (72 percent) and men (61 percent) say steps need to be taken to make the sexes equal in the workplace. Though for younger women, the gap is much smaller. The persistent gap is due, in part, to the “career interruptions” that women usually experience to have a family.
More than a question of fairness, the wage gap issue has real, tangible effects. PolicyMic (via the White House) has a list of things that women could buy with the money they’re missing out on. But more than that, women are denied the opportunity to save money “and achieve long-term financial security” because they’re paid less. And at a time when more women are the breadwinners in their homes, it has an impact on them and their families in the present. In other words, men, women and children lose out when women don’t get paid what they’re due.
If you’d like to learn more about the history of the wage gap, and some current stats, here’s a video from Pew Research.
President Obama has sent word to the Labor Department to rework the rules on overtime pay, which should raise wages for workers who, up to this point, are considered exempt from the extra income.
Republicans in Congress have already stated that they plan to fight the President’s efforts to raise the federal minimum wage from $7.25 to $10.10. As a result, the President is turning to executive order, which will make “several million” fast-food workers, loan officers, managers of various sort, and others eligible for overtime. At the moment, the rule says that if someone is an “executive or professional” worker, they’re exempt from overtime. Of course, many businesses classify workers as “executive or professional” to avoid paying them more.
The measure is also in keeping with the President’s stated effort to begin the process of closing the wage and inequality gap in this country that stifles the financial ambitions of many lower-income, middle class and working class Americans.
“We need to fix the system so folks working hard are getting compensated fairly,” said Labor Secretary Cecilia Muñoz. Critics say that raising wages will force businesses to cut workers.
Over the past 30 years, The New York Times says, corporate profits have skyrocketed while the share of gross domestic income that went to workers fell to a record low of 42 percent in 2012. At the moment, if a salaried worker is making $455 per week or less, they must be given time-and-a-half for overtime if the additional time is put in. That figure was put in place in 2004.
Economists don’t yet agree on what the outcome of this will be. But NPR says, “… [A] ‘supervisor’ could earn as little as $24,000 a year, while working well beyond 40 hours. In some cases, such a worker might put in enough hours to end up getting paid — in effect — less than the minimum wage.” In that case, not only is this person not even earning a living wage, they’re not left with enough time to get a second job or start a little something on their own to supplement their income. This is untenable.
Overtime is sounding pretty good to us.
During President Obama’s State of the Union address, he announced that he will raise the minimum wage for federally contracted workers through an executive order that will bring the hourly pay up to $10.10 from $7.25. According to the AP, the raise will only affect 10 percent of the total 2.2 million contracted workers and might not be renewed with those contracts come up for renewal. Nonetheless, security guards, housekeepers, and other low-wage workers can, and probably would, fight to hang on to and increase that amount.
This effort to raise wages is part of what President Obama called the “year of action.” Socioeconomic inequality will be a big focus.
“Those at the top have never done better,” the President said during his speech. “But average wages have barely budged. Inequality had deepened. Upward mobility has stalled.”
The President joins 10 states, including Arizona, Ohio, and Rhode Island, that have raised the minimum wage while Congress debates back and forth on the issue.
“That said, raising the minimum wage in and of itself can drastically raise the number of people affected. If the federal minimum wage grew to $10.10, suddenly not only the current minimum wage-earners (at $7.25 per hour) would be affected, but all of the $8 and $9 per hour workers likewise would slip below that bar and would need a raise,” according to US News. “According to the Economic Policy Institute, a progressive economic think tank, 30 million Americans would get raises in this circumstances.”
The Economic Policy Institute has a petition on its website that has been signed, according to the site, by 600 economists, advocating for a $10.10 minimum wage.
“The vast majority of employees who would benefit are adults in working families, disproportionately women, who work at least 20 hours a week and depend on these earnings to make ends meet. At a time when persistent high unemployment is putting enormous downward pressure on wages, such a minimum-wage increase would provide a much-needed boost to the earnings of low-wage workers,” the petition says.
Still, there’s debate over the impact of this increase.
“It’s important to understand who’s earning the minimum wage. Very few people are raising families on the minimum wage alone—for instance, just nine percent of employees affected by the $10.10 number that Congress is discussing are single parents. By contrast, 60 percent of affected employees are either living at home with family and relatives or they’re a second- or third- earner,” Michael Saltsman, research director at The Employment Policies Institute, a nonprofit organization that researches issues surrounding entry-level employment, told us via email.
Support for minimum wage hikes is growing, but the debate over who will benefit — and who will benefit most — continues. This Washington Post story has a series of charts that break down the impact that a $10.10 increase would have on various demographics.
“But there’s no question that a large share of the American workforce earns wages well below $10.10 and would be directly affected as long as their jobs aren’t lost,” the article says.
You may think that with work experience your salary will just keep getting bigger and bigger. Not so. There are actually salary peaks — and a woman’s salary peaks before she hits 40!
An analysis from PayScale found that women’s pay peaks at age 39, and, depending on their median data, at around $60,000. While you may have increases after this, the pay jumps will hardly ever outpace inflation, which means you’ll earn what really amount to $60,000 for the remainder of your professional career.
Here’s evidence of the wage gap: Men’s salaries don’t peak until age 48, topping out at a median of $95,000.
Both men and women will see salary growth of about 60 percent by age 30, according to the PayScale study.
By the time the typical woman reaches age 39, her salary has grown by less than 20 percent when compared to when she was 30. Then after 39 the growth pretty much comes to a halt.
Men however have a steady salary growth rate after age 30. Yet by age 48 most men see that their income has grown by about 45 percent, compared to when they were 30.
Don’t get too disappointed, a lot of this depends on your career profession and choices. But there are things you can that will positively affect your salary growth.
In Your 20s: Since you are fresh out of college you might be eager to take the first job you’re offered. Have a plan before you jump into the professional pool.Take a look at the industry you have chosen. Does it have frequent annual pay increases? Careers in engineering, computer science, management positions (usually dominated by men) all of which have a healthy growth rate.
Also during this period, look for ways to move up. If a position becomes available, go for it. It is also a good time in your career to begin your savings strategy as your responsibilities should be at a minimum.
In Your 30s: Be on the lookout for new opportunities. Go on interviews regularly. According to Kathy Caprino, president of career and leadership coaching company Ellia Communications, “Literally, you should be interviewing two or three times a year.” A new job usually means a pay bump.
Volunteer to take on new projects or more work. With more responsibility comes more money. And even is you are hope raising kids, try to do some part-time or freelance work to stay in the pipeline and maintain your contacts.
Cut down your debt and start saving money for retirement. You should be putting away at least 15 percent of your income.
In your 40s and 50s: Stop overspending and put your retirement savings needs first. At this stage of life, you should ideally be saving 25 percent of your income for retirement.
Pay off the mortgage. It’s not a good idea to enter into retirement still having to worry about carrying a mortgage. Sugar Savvy has a good suggestion on how to pay down the loan: “Make half a mortgage payment every two weeks — you’ll end up making one full extra payment every year, which will slightly accelerate your payoff schedule.”