The global trend towards extreme wealth and income concentration has dramatically strengthened the economic and political power of those individuals — overwhelmingly male — at the top. In the United States and around the world, women continue to be underrepresented in high-level, highly paid positions and overrepresented in low-paying jobs. Women of color and transgender individuals experience particularly high levels of poverty, unemployment, and other economic hardships. Gender discrimination and sexual harassment in the workplace contribute significantly to these persistent economic divides.
The Covid-19 pandemic has exacerbated long-standing gender inequalities. Women are more likely than men to work in service occupations, including domestic work, restaurant service, retail, tourism, and hospitality, that require face-to-face interactions and have been hard-hit by layoffs. Because of the nature of these jobs, teleworking is not an option for many women.
Frontline jobs, which are the ones most often deemed “essential” and require people to work in-person, are also heavily staffed by women. The health care, social work, and government and community-based services sectors are overwhelmingly made up of female employees, according to research from the Economic Policy Institute. Women make up 73 percent of government and community-based services workers, 76 percent of health care workers, and 78 percent of social workers.
In March 2020, U.S. men and women had the same unemployment rate — 4.4 percent, according to Bureau and Labor Statistics data. But in April, as the pandemic nearly shut down the economy, these rates sharply diverged, with the female unemployment spiking to 16.2 percent, compared to 13.5 percent for men. As the economy slowly improves, these gender gaps have narrowed. In December 2020, men and women were even again, with 6.7 percent unemployment rates. But this leveling does not make up for women’s larger income loss over the course of the year. It also masks particular employment challenges faced by women with children and women of color.
The official U.S. unemployment rate does not include people who have not looked for work in the past four weeks. Because women tend to bear more responsibility for family caregiving, they were more likely than men to drop out of the labor force, particularly in the first phase of the pandemic. According to Bureau of Labor Statistics data, between January and September 2020, women’s labor force participation rate dropped by 2.4 percentage points, compared to a drop of 1.9 points for men. Rand Corporation research reveals that the participation gap between women and men with children was even larger during this period. The steepest decline in labor force participation was among women with two children, at 3.82 points, compared to a 1.39 point drop for men with two children.
Among U.S. women who’ve stopped looking for work during the pandemic, the steepest drops have been among women of color. Between February and December 2020, the drop in labor force participation was 4.3 points for Black women and 3.8 points for Latinx women, compared to 1.6 for white women. Several factors may have contributed to women of color becoming discouraged from seeking work. On top of gender inequities, women of color face racial discrimination in hiring and layoffs and they are disproportionately concentrated in service and care sector jobs with high risks of Covid exposure.
Transgender people are always in a precarious position, but the Covid-19 pandemic has made them particularly vulnerable. According to research from the Williams Institute at UCLA, transgender Americans are at a higher risk for Covid-19 for several reasons. They are more likely to be low-income, with 47.7 percent of transgender people living below 200 percent of the official U.S. poverty line, compared to 28.9 percent of the general U.S. population. They are also significantly more likely to suffer from asthma and HIV, conditions that put people at higher risk of mortality if they contract Covid-19. And they experience high barriers to receiving health care.
The pandemic has also hit transgender Americans especially hard economically. A poll from the Human Rights Campaign and PSB Research shows that as of June 2020, 54 percent of transgender people had experienced reduced work hours — more than double the 23 percent of the total U.S. workforce that faced a similar reduction. Twenty-seven percent of transgender people had experienced pay cuts, compared to just 7 percent of the U.S. workforce. And 19 percent had become unemployed due to the pandemic, a significantly larger share than the general population.
Female-dominated occupations — such as childcare and restaurant service — continue to occupy the lower rungs of the U.S. wage ladder. Women make up 67 percent of workers earning the federal minimum wage according to the Bureau of Labor Statistics, a wage rate stuck at $7.25 since 2009. By contrast, women represent only 8 percent of CEOs at Fortune 500 firms. CEOs took home $15.5 million on average in 2020.
White males particularly dominate highly lucrative financial industry jobs. At the top five U.S. investment banks (JPMorgan Chase, Goldman Sachs, Bank of America Merrill Lynch, Morgan Stanley, and Citigroup), males make up from 64 to 82 percent executives and top managers. The share who are white ranges from 70 to 81 percent. More than two-thirds of all New York City securities industry employees were male in 2020, and nearly three-fifths were white.
Men make up an overwhelming majority of top earners across the U.S. economy, even though women now represent almost half of the country’s workforce. Women comprise just 27 percent of the top 10 percent, and their share of higher income groups runs even smaller. Among the top 1 percent, women make up slightly less than 17 percent of workers, while at the top 0.1 percent level, they make up only 11 percent.
Other major economies show similar trend lines. A study of eight high-income countries from the London School of Economics found that women made up just 14 percent to 22 percent of the top 1 percent of earners. These surveys were conducted during the 2010-2014 period. The U.S. figure for 2012 is from the National Bureau of Economic Research.
Throughout the U.S. workforce, women remain vastly underpaid. Among full-time workers, women earned less than 81 cents for every dollar a man earned in 2016. If part-time workers were included, the gap would be even wider, since women are more likely to work reduced schedules, often in order to manage childrearing and other caregiving work.
Within racial groups, Bureau of Labor Statistics data shows the largest pay gaps between men and women appear among Whites and Asians — not because Latinas and Black women have made faster progress towards equity but because average pay for men in these groups falls far below the compensation of White and Asian men.
American women earn less than men, on average, in all industries. The largest pay gaps are in management positions, where men made $88,000 on average in 2016, compared to just $55,000 for women. The smallest gap appears in the construction sector, but women make up only 9 percent of workers in this industry.
The U.S. gender pay gap, while unacceptably large, is not the world’s widest. But accurately measuring these gaps across countries can be difficult. Within the OECD group of higher-income nations, South Korea holds the widest gap, with men earning 37 percent more than women, on average. The country with the narrowest gap: Luxembourg, where men make just 3.4 percent more than women. Gaps have been smallest in OECD countries where the share of workers covered by collective bargaining agreements hits at least 80 percent and widest in countries with weak collective bargaining and no or very low minimum wages.
The International Labor Organization concedes that more work needs to be done to develop more accurate global gender gap analyses. One factor skewing the numbers: Women do considerably more unpaid work, from housekeeping to caring for children and the elderly. Among the 21 countries reporting data for at least one year during the 2013-2015 period, the West Bank and Gaza had the greatest imbalance, with men devoting just 16 percent as much time to unpaid domestic and caregiving work as women. Belgium, where men spend 63 percent as much time on these activities as women, ranked at the top.
In the UK, a new regulation requires corporations to disclose the pay gaps between their male and female employees. Financial firms have among the largest divides because of the scarcity of women in top positions. In 2018, HSBC reported the biggest gap, with the bank’s female employees averaging just 41 percent as much as UK male employees. For all 10,000 firms in the survey, the median-paid male employee received 9.7 percent more in pay than the median female.
Most inequality analysis focuses on income (the wages earned from a job or from capital gains) rather than wealth (the sum of one’s assets minus debts). Income inequality, while stark, pales in comparison to wealth inequality. The divides become even more dramatic when viewed through a gender lens.
At the top end, we have no more striking sign of increasing global wealth concentration than the rise of the billionaire class. The number of individuals with fortunes worth at least $1 billion more than doubled between 2010 and 2018, while remaining overwhelmingly male. In 2018, only 256 women ranked among the world’s 2,208 billionaires. Seventy-seven hail from the United States, more than double the number in any other country.
One important component of wealth, retirement savings, shows an even wider gap between men and women. According to the Transamerica Center for Retirement Studies, American women in 2017 held $42,000 in median retirement savings, compared to $123,000 for men. Some 21 percent of women and 12 percent of men have less than $10,000 in retirement accounts. Both pension plan and Social Security payouts reflect in part past earnings. The gender pay gap means women end up with fewer post-retirement resources. In 2017, the $15,000 average annual Social Security benefit for women lagged the benefit for men by $4,000. The smaller retirement nest eggs of women also have to stretch further than male retirement savings, simply because women have longer life expectancies.
Debt also significantly impacts wealth. Crushing student loan burdens drag many young Americans far into the negative side of the wealth line, with the heaviest for female students. Women comprise 56 percent of college students, but hold nearly two-thirds of outstanding student loan debt.
According to the American Association of University Women, black women graduate with the most debt — $30,400, on average — compared to $22,000 for white women and $19,500 for white men.
The gender poverty gap widened over the past 50 years. In 1968, 10.8 percent of women aged 18-64 (6.1 million women) and 7.2 percent of men (3.7 million) in this age group lived below the poverty line. In 2016, 13.4 percent of women in this age group (13.4 million women) were living in poverty, compared to 9.7 percent of adult men (9.4 million men). The poverty threshold for a single person in 2016: $11,880 in annual income. Households led by single women with children had a poverty rate of 35.6 percent, more than twice the 17.3 percent rate for households led by single men with children, according to the National Women’s Law Center.
Poverty is a particularly acute problem for women of color, affecting 21.4 percent of Black women, 18.7 percent of Latinas, and 22.8 percent of Native American women, compared to the national poverty rate for white men of 7.0 percent.
Transgender Americans experience poverty at double the rate of the general population, and transgender people of color experience even higher rates. The National Center for Transgender Equality has found that 43 percent of Latino, 41 percent of Native American, 40 percent of multiracial, and 38 percent of Black transgender respondents lived in poverty in 2015.
In 2015, the overall unemployment rate for transgender Americans stood at 15 percent, compared to 5 percent for the general population. The unemployment rate ran even higher for American Indian, Black, Latino, Middle Eastern, and multi-racial transgender Americans.