We Must Move Beyond the Status Quo and Close the Gender Pay Gap

By Asha Banerjee and Rocio Perez

The recently signed American Rescue Package (ARP) is a crucial step paving the way for a larger economic recovery for millions. While direct income assistance will bolster workers and families in the near-term, we still have a long road ahead to rebuild enduring economic security for those impacted by the COVID-19 pandemic and recession—and especially for those who were economically insecure even beforehand. Prior to the pandemic, women faced severe inequities in wages and pay, earning only 82 cents for every dollar their white male peers earned. This “lifetime wage gap” persists through good and bad economic times and costs women up to half-a-million dollars throughout their careers.

As the economy inches forward to recovery and industries begin to rehire, we can’t return to a status quo where an 18 percent wage differential for women is normal and accepted. And as we recognize the countless contributions of women during Women’s History Month, we must focus policymakers on concrete steps for fixing gender disparities.

Women’s Equal Pay Day on March 24 arrives as working women have weathered an unprecedented crisis in the last year. COVID-19 undoubtedly had one of the most damaging effects on women, with the closure of schools and child care leading many to leave the workforce to care for their children and conduct remote education. For example, a staggering 800,000 women were forced to drop out of the workforce in September 2020. Black, Latinx, Native American, and AAPI women faced elevated rates of unemployment as the pandemic forced women-dominated industries—such as retail and hospitality—to shut down. Women who did remain employed in jobs paying low wages, such as cashiers and food service workers, couldn’t work remotely. These women were left with the impossible choice of jeopardizing their health by working or risking their financial stability by not.

Women of color face a double wage gap: as women they are paid less than their male counterparts—and, due to the history of systemic racism and gender discrimination, many are overrepresented and underemployed in low-wage, low-benefit sectors. Transgender women face steeper wage gaps than the average. A consistent wage gap translates to years of lost income, wealth, and valuable opportunities. When looking at the wage gap by race and ethnicity.

  • Black Women are paid 63 cents for every dollar compared to white males. This average for Black women is 19 cents less than women overall. In occupations like waitressing and public K-12 education, this wage gap means an income loss between $7,000 and $14,000 per year.
  • Latinx Women are paid an average of 55 cents for every dollar compared to their white male peers. In 1989, the pay gap was 52 cents; in other words, in almost 30 years our nation has made little to no progress addressing this growing disparity for Latinas in the workforce.
  • Native American Women are paid 60 cents for every dollar their white male peer earns. Depending on the tribe and state, Native women can face an even wider wage gap. Insufficient government data very likely understate the severity of the wage gap and current situation for Native women.
  • AAPI Women as a whole earn just 85 cents to what their white male peer earns, translating to $800 in lost wages per month. Significantly, the wage gap varies widely within AAPI ethnicities; for example, Nepalese and Burmese women earn just 50 and 52 cents of what white males make. We can’t return to a pre-pandemic wage gap status quo where women are consistently undervalued and underpaid.

Considering that women make up two-thirds of the workforce who are either paid the federal minimum wage ($7.25) or slightly higher, policymakers must strengthen Equal Pay legislation as a first step. Our nation could also address the gender wage gap by raising the minimum wage to $15 an hour, eliminating the tipped wage, and closing the Fair Labor Standards Act loopholes that enable subminimum wages. Policymakers should focus on strengthening women’s earnings—especially in sectors paying low wages—by bolstering other supportive policies, including paid family and medical leave, worker organizing and collective bargaining, and child care.

A full, inclusive economic recovery requires attention to the inequities and wage gaps that predated the pandemic. This past year has worsened inequities and widened the wage gap to the extent scholars worry this pandemic would set women back an entire generation. We simply can’t let this happen.

Policymakers must center women workers in economic recovery policies during Women’s History Month—and every month.