Why April 9 Isn't Really Equal Pay Day

×
BOSTON - FEBRUARY 26: Brody Dorion, 4, left, speaks with his mother Vanessa Dorion, 25 of South Boston, at ABCD South Boston Head Start's West Broadway Center in Boston. Dorion is a parent volunteer in the classroom. The center will be affected by the automatic federal cuts on Friday. (Photo by Aram Boghosian for The Boston Globe via Getty Images)
Aram Boghosian for The Boston Globe via Getty ImagesBrody Dorion, 4, left, speaks with his mother Vanessa Dorion, 25, a parent volunteer at ABCD South Boston Head Start's West Broadway Center in Boston.
Every year, the National Committee on Pay Equity (NCPE) selects a day, generally in April, to demonstrate how much extra time the average woman would need to work in order to bring home the same amount of money as the average man. Called "Equal Pay Day," it is a vivid, clear reflection of the fact that women make 77 percent as much as men -- which means they would need to work a little over three months more than men to make the same amount of money.

But is Equal Pay Day an accurate representation of the pay gap between men and women? On the surface, the answer is a resounding no -- NCPE is quick to admit that the day is an approximation, a vague representation of the pay disparity, scheduled around major holidays and adjusted to fit into the calendar. (This year it's April 9.) And, for that matter, critics often note that factors like education, college major, and life choices all affect the pay ratio between the sexes. But at the end of the day, the 77 percent figure remains: For over a decade, women have continued to make just a little over three quarters as much as men. Things haven't gotten better in years, and right now they're poised to get a heck of a lot worse.

The Minimum Wage

A big part of the problem is the minimum wage. One of the reasons that women make a lot less than men is because they are more likely to be employed in low-wage or minimum-wage jobs; in fact, according to the National Women's Law Center, two thirds of minimum-wage jobs are filled by women. To make things worse, the minimum wage hasn't been increased in almost six years, and the tipped minimum wage -- the wage earned by waitresses -- hasn't increased in over 20 years. Today, a full-time worker making minimum wage brings home $15,080. For a single mother with two children, that's over $3,000 below the poverty line.

And despite a great deal of sound and fury in Washington, it doesn't look like the minimum wage will be increased any time soon. To make things worse, as the Center for American Progress notes, many of the fastest-growing jobs in America are in low-paying, female-dominated professions like food service, customer service, and retail sales.

Cuts to Education...

The minimum wage is only part of the problem. Another issue is sequestration, the automatic budget cuts that are starting to ripple through the economy. While most of these cuts affect men and women fairly equally, a few seem to be almost surgically targeted to hit women skating on the fine edge of poverty. The most obvious example is probably Head Start, a federal preschool, health, nutrition, and educational program for low-income children and their families. While the education component of Head Start has long-term effects, the program serves an equally valuable service in the short term: for many lower-income families, it functions as a federally-funded daycare.

Unfortunately, sequestration has levied a 5 percent cut on Head Start, a seemingly minor trim with major consequences. Across the country, Head Start centers are cutting bus services, reducing hours, and turning children away. And the ripples continue: nearly 60 percent of children in Head Start live in single parent families, and approximately 84 percent of those households are headed by a woman. Put another way, over half the children in Head Start come from households headed by a single mother who relies on the program for child care. Cuts to the program directly translate to an increase in childcare expenses, taken out of the pockets of the women who can least afford it.

And Head Start isn't the only childcare program that's getting slashed. Across the country, grade school teachers are getting laid off, funds are getting cut from educational programs, and disabled students are getting left out in the cold. While these reductions affect parents of both genders, the considerable number of low-income, single-mother households mean that these educational cuts will fall especially hard on women.

...And Other Programs

But what about the rest of the social safety net? TANF, the temporary assistance program for needy families, was largely spared from sequestration slashing, but will still lose an estimated $2 million. In the grand scheme of federal budgeting, this is chicken feed, but the cuts are coming on top of previous restrictions and cuts to the program. In 1996, 68 percent of impoverished families with children received cash benefits from TANF; by 2010, that number had plummeted to 20 percent. Added to that, TANF funding is far from princely -- in most states, a family of three is eligible for only $6,000 per year.

It's worth noting that 85.2 percent of families that receive TANF assistance are headed by women.

Public housing is also taking a big cut. Across the country, public housing programs are facing cuts of up to 18 percent of their budgets. Some are filling the gap by cutting the number of vouchers that they issue, a move that will vastly increase rent costs for up to 140,000 households. Given that 71 percent of families in public housing are headed by women, this translates into approximately 99,400 women who will have to scramble harder to make ends meet.

For 10 years, analysts and experts have watched the ratio of female to male earnings, wondering when increased education, equal opportunity employment rules, and other initiatives would finally push it a little bit higher. But with the minimum wage keeping women's earnings low and sequestration slowly draining money out of their pocketbooks, it looks like the wait is going to continue for the foreseeable future.

Bruce Watson is a DailyFinance's Savings editor. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.


Increase your money and finance knowledge from home

Advice for Recent College Grads

Prepare yourself for the "real world".

View Course »

Investment Strategies

What's your investing game plan?

View Course »

Add a Comment

*0 / 3000 Character Maximum