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Institute for Policy Studies

Blogging Our Grand Divide

Gender Pay Gap Drives Inequality


It’s a refrain we’ve heard a million times. “Women make 78 cents for every dollar a man makes.”

But what does it really mean?

According to a recent report from the Institute for Women’s Policy Research, at the current rate, women will not see equal pay until 2059—one year later than the group’s findings from the previous year.

2059 is a long time from now. And certainly too long a wait for women who need to put food on their families’ tables today.

Is the solution as simple as employers paying women more for their work?

Heidi Hartmann, economist and author of the IWPR research, says no. Obviously, it would be great if all employers had a gut check and raised pay for all the women who work for them. But that actually wouldn’t solve the complex problem of the gender pay gap.

Why? Because women are concentrated in low-wage industries. From restaurants to domestic work to retail, women are the majority of workers in industries where employers pay rock bottom wages.

And those jobs are predominantly non-union and, in some cases, not even subject to basic labor protections. In restaurant work, for instance, the federal tipped minimum wage is $2.13 an hour, an exemption to the regular minimum wage that has been kept in place by the powerful National Restaurant Association lobby for decades. And homecare workers only recently won a court case determining that these workers should receive basic minimum wage and overtime protections.

Some 90 percent of homecare workers and more than 70 percent of restaurant workers are women—two of the lowest-paying occupations in our economy (and even within these industries, women still make less than men).

Closing the gender pay gap is about more than raising women’s wages. It’s about addressing our entire low-wage economy by increasing the minimum wage to a living wage, eliminating the tipped minimum wage and raising it to the regular wage, and covering all workers under basic labor protections, including the right to collective bargaining.

These broad measures would end up helping women most and would go a long way towards closing the pay gap.

As I’ve written about elsewhere, low-wage jobs are concentrated in industries where profits are booming. In fact, large, wealthy corporations are the majority – 66 percent – of low-wage employers in America. According to the National Employment Law Project, the 50 largest employers of low-wage workers are highly profitable, large corporations with executive compensation averaging $9.4 million.

Women, it turns out, are the backs on which extreme wealth is being built.

The next time you hear, “Women make 78 cents for every dollar a man makes,” think about that. The gender pay gap isn’t just about paying women more. It’s also about transforming low-wage industries into living-wage industries.

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