Economic Inequality Across
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.
Female-dominated occupations — such as childcare and restaurant service — continue to occupy the lower rungs of the U.S. wage ladder. Women make up 63 percent of workers earning the federal minimum wage, a wage rate stuck at $7.25 since 2009. By contrast, women represent only 5 percent of CEOs at Fortune 500 firms. CEOs took home $13.1 million on average in 2016.
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 69 to 82 percent executives and top managers. The share who are white ranges from 78 to 87 percent. More than two-thirds of all New York City securities industry employees were male in 2016, and nearly two-thirds 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 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 is from 2012.
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, 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.