Category Archives: Income Inequality/Gap

Gender Pay Inequality: Consequences for Women, Families and the Economy

Source: U.S. Congress Joint Economic Committee (JEC), April 2016

From the press release:
Carolyn B. Maloney (D-N.Y.), Ranking Member of the U.S. Congress Joint Economic Committee (JEC), today released a new report examining the gender pay gap and its long-term effects on women, their families and the economy. The report comes several days in advance of Equal Pay Day, which takes place this year on Tuesday, April 12th. The study includes the most up-to-date income data, broken down not only by gender, age and race, but also by state and congressional district….

The Gender Pay Gap Is Bad. The Gender Pay Gap for Women of Color Is Even Worse.

Source: Rebecca Leber, New Republic, April 14, 2015

Women, on average, earn 22 percent less than men, or 78 cents for every white man’s dollar. This fact is everywhere, especially on Tuesday, Equal Pay Day. The day itself is meant to symbolize this figure, as it takes women three-and-half extra months of work to earn what men make year-round. …. There is a problem with the 78 percent statistic, but not the one critics say. That figure obscures the fact that most women of color fare worse than white and Asian women. It is a national average, across all races, from the Bureau of Labor Statistics. Compared to what a white man makes: Hispanic women earn 54 percent, followed by black women at 64 percent, and Native American at 65 percent. (The wage gap closes somewhat for women of color vs. men of the same race or ethnicity). ….

The power of parity: Advancing women’s equality in the United States

Source: Kweilin Ellingrud, Anu Madgavkar, James Manyika, Jonathan Woetzel, Vivian Riefberg, Mekala Krishnan, and Mili Seoni, McKinsey Global Institute, April 2016

From the summary:
The United States could add up to $4.3 trillion in annual GDP in 2025 if women attain full gender equality. In a new report, The power of parity: Advancing women’s equality in the United States, the McKinsey Global Institute (MGI) finds that every US state and city can add at least 5 percent to their GDP in that period by advancing the economic potential of women. Half of US states have the potential to add more than 10 percent, and the country’s 50 largest cities can increase GDP by 6 to 13 percent.

While the barriers hindering women from fully participating in the labor market make it unlikely that they will attain full gender equality within a decade, the report finds that in a best-in-class scenario—in which each US state matches the state with the fastest rate of improvement toward gender parity in work over the past decade—some $2.1 trillion of incremental GDP could be added in 2025. That is 10 percent higher than in a business-as-usual scenario…..

The Lifetime Wage Gap, State by State

Source: National Women’s Law Center (NWLC), 2016

Based on today’s wage gap, women would lose $430,480 over the course of a 40-year career. For Latinas the career losses mount to $1,007,080, and for African American women the losses are $877,480. If we don’t act to close the wage gap, a woman just starting out today stands to lose hundreds of thousands of dollars over the course of her career, undercutting her ability to provide for herself and her family, as well as her retirement security.

This “lifetime wage gap” exists across the country: in every state, women’s career losses based on today’s wage gap would amount to about one-quarter of a million dollars or more — and in seven states women’s career losses would amount to more than half a million dollars.

The situation is even worse for women of color. Compared to the earnings of white, non-Hispanic men, the lifetime wage gap would amount to more than $1 million for Asian American women in one state, for African American women in six states, for Native American women in 13 states, and for Latinas in 23 states.

Want to see where your state ranks? Click on a state below to see its lifetime wage gap for women overall, African American women, Latinas, Asian American women, and Native American women.

Tech’s Invisible Workers

Source: Silicon Valley Rising, March 2016

Low wage workers do their part to make Silicon Valley the most prosperous region in the world, yet they struggle every day to feed their families, pay their rent, and take care of themselves and their children when they are sick.

Although the region’s top tech firms made a record $103 billion in profits in 2013, one in three Silicon Valley households do not make enough money to meet their most basic needs.

While their direct employees are often well compensated, high tech companies contract out most of their jobs to workers who are poorly paid and don’t receive basic benefits.

And in a stark diversity gap, blacks and Latinos make up the majority of these janitors, food service workers, maintenance workers, security guards, and shuttle bus drivers who help build and sustain the tech economy — yet comprise just 3-4% of the core tech workforce.

Changes in Neighborhood Inequality, 2000-2010

Source: Daniel H. Weinberg, US Census Bureau Center for Economic Studies Paper No. CES-WP- 16-18, March 1, 2016

From the abstract:
Recent work has suggested that higher income inequality may be a desirable attribute of a neighborhood in that it represents diversity, even though high (and rising) inequality appears to be detrimental to the nation as a whole. The research reported here has determined the key characteristics of a census tract that are associated with the level of inequality in 2000 or 2010, and those associated with changes in income inequality between 2000 and 2010. For the change, the strongest influence is a negative effect for the level of income inequality in 2000; that is, higher income inequality in 2000 leads to a decline over the decade, ceteris paribus. Neighborhoods with higher proportions or levels of the following population and housing characteristics tend to have both higher income inequality and a larger increase in income inequality between 2000 and 2010: individuals in poverty, those with a bachelor’s degree, older individuals, householders living alone, and median rent, and lower median housing value and household income. Among these, perhaps the most important determinant is the percent in poverty in 2000. Furthermore, as the baseline level of demographic and economic diversity increases, the better the baseline and change characteristics explain the change in the Gini index from 2000 to 2010.

Pathways to Equity

Source: Institute for Women’s Policy Research (IWPR), 2016

Half of the gender wage gap is due to women working in different occupations and sectors than men. Improving women’s access to good middle-skill jobs can help close the wage gap and improve women’s economic security. The Pathways to Equity Initiative shows job changes that can improve women’s economic standing and meet employers’ demands for skilled workers.

Find a Target Job

Pathways to Equity: Narrowing the Wage Gap by Improving Women’s Access to Good Middle-Skill Jobs
Source: Ariane Hegewisch, Marc Bendick Jr., Barbara Gault, Heidi Hartmann, Institute for Women’s Policy Research (IWPR), IWPR #C43, ISBN #: 978-1-933161-99-0, 2016

From the summary:
This report addresses women’s access to well-paid, growing, middle-skill jobs (jobs that do not require a bachelor’s degree). It documents sex segregation in middle-skill jobs, and discusses how gender integration of good jobs could both reduce skill-shortages and improve women’s economic security. The report focuses on middle-skilled “target” occupations in manufacturing, information technology, and transportation, distribution, and logistics that have high projected job openings and that typically employ few women. Using an innovative methodology based on the U.S. Department of Labor’s O*Net database, Marc Bendick, Ph.D., of Bendick and Egan Economic Consultants, Inc, joined IWPR researchers Ariane Hegewisch, Barbara Gault, Ph.D., and Heidi Hartmann, Ph.D. to identify lower paid predominantly female occupations that share many of the characteristics of the “target” occupations and can serve as “on-ramp” occupations to good middle-skill jobs for women seeking to improve their earnings, and employers looking to fill the vacancies. The report is part of the Institute for Women’s Policy Research’s Pathways to Equity: Women and Good Jobs initiative, funded by a grant from the JPMorgan Chase Foundation as part of its of its $250 million, five-year New Skills at Work initiative.

How to transform workers’ campaign rage into better jobs and wages

Source: Thomas Kochan, The Conversation, March 24, 2016

The presidential campaigns deserve some credit for finally voicing some of the deep frustrations and anger felt by American workers who have lived for decades in an economy that works for those at the top but not for them and their families. …. But angry rhetoric will not put the economy on a path that works for the disaffected and disenfranchised. Instead we need to address the root causes of workers’ frustration and their economic decline. And to do that, I would argue, we need to fix our broken labor policy. ….

Unequal Incomes, Ideology and Gridlock: How Rising Inequality Increases Political Polarization

Source: John Voorheis – University of Oregon, Nolan McCarty – Princeton University, Boris Shor – Georgetown University, August 21, 2015

From the abstract:
Income inequality and political polarization have both increased dramatically in the United States over the last several decades. A small but growing literature has suggested that these two phenomena may be related and mutually reinforcing: income inequality leads to political polarization, and the gridlock induced by polarization reduces the ability of politicians to alleviate rising inequality. Scholars, however, have not credibly identified the causal relationships. Using newly available data on polarization in state legislatures and state-level income inequality, we extend previous analyses to the US state level. Employing a relatively underutilized instrumental variables identification strategy allows us to obtain the first credible causal estimates of the effect of inequality on polarization within states. We find that income inequality has a large, positive and statistically significant effect on political polarization. Economic inequality appears to cause state Democratic parties to become more liberal. Inequality, however, moves state legislatures to the right overall. Such findings suggest that the effect of income inequality impacts polarization by replacing moderate Democratic legislators with Republicans.
Opinion: Three reasons political polarization is here to stay
Source: Jane Mansbridge, Washington Post, March 11, 2016

….Three major structural changes — gradual party realignment, closer elections and inequality — largely explain the huge decline in the numbers of party members willing to vote for legislation that the other party has sponsored, and in particular the number of Republicans willing to vote for measures the Democratic Party has sponsored. None of these causes is likely to change….

…..Nolan McCarty and his colleagues at Princeton are beginning to tease out the mechanisms. In state politics, they find that states with increasing income inequality experience two polarizing effects. First, state Republican parties shift to the right overall. Second, state Democratic parties shift to the left because their moderates lose. Rich Republican donors could well be responsible for both outcomes if, as seems likely, they fund more extreme candidates in Republican districts and target the Democrats they have the best chance to dislodge, namely those in politically moderate districts.

The big picture is that the extraordinary growth in incomes at the top of the income distribution makes possible the discretionary money that can then be poured into politics, and those who contribute to politics are, on average, a good deal more extreme in their views than the average voter….