April 4 is Equal Pay Day in the United States. On Equal Pay Day, we highlight persistent wage disparities between men and women and mark, roughly, the day when women catch up with what men earned the previous year. Simply put, on average, women worked an extra 90 days this year to catch up with what men earned last year.
Depending on the study you use, women earn about 80 percent of what white men earn; African American women, 66 percent; and, Hispanic women, 60 percent. Over the course of a lifetime, because of the pay gap, the average woman who works outside the home will lose more than $500,000 in earnings, and college educated women will lose $800,000. Equal Pay Day — and the statistics that underlie it — are a stark reminder that, despite all the laws on the books and advocacy addressing women’s workforce participation, there is still much to do.
The good news is that the pay gap has narrowed over the last forty years. When the Equal Pay Act was signed into law in 1963, women earned 59 cents for every dollar a man earned. By 2000, that gap had narrowed by 15 cents, and women earned 77 cents to the dollar. But there is bad news. Progress is slow (glacial, even). According to the Institute for Women’s Policy Research (IWPR), if current trends continue, it will take 39 years for this gap to close completely for white women (by 2056); 107 years for African American women (by 2124) and 231 years for Hispanic women (by 2248). See the infographic alongside this blog created by Venngage, which makes this easy to visualize.
Equal pay is important for individuals and for families, not only in real time but for the long haul. Low wages mean less money for emergencies and saving for the future. Pensions and retirement accounts are based on earnings. As a result, older women are more likely to live in poverty than men over 65.
We aren’t alone in addressing these issues; this is a challenge everywhere. It’s also an opportunity to understand that increasing women’s economic participation can both drive sustained growth and address persistent poverty. A recent McKinsey study documents that gender parity in economic participation could add from 11 percent to 26 percent to the global GDP by 2025. Those percentages translate to adding from $12 trillion to $28 trillion to GDP, the latter sum reflecting the GDPs of the two largest economies, the US and China.
Forty of the 95 countries in the McKinsey study have high or extremely high inequality on half or more of the measures used in the study. Pay gaps are but one measure. To increase growth in a systematic and strategic manner, it is critical to increase women’s formal labor force participation, increase women’s access to banking and credit, codify stronger legal protections, address the epidemic of gender based violence that impedes women’s full participation in society, address the predominance of women in unpaid care work, ensure that girls stay in school, and ensure that women have the skills and networks they need to succeed.
So, as we mark this day, a few things stand out:
- First, we are all in this together. Women across the globe live in different circumstances, but studies all reflect that women’s work and economic contributions are undervalued. Interventions abound, along with measures of impact. We need to understand what works and see how it can be applied in context, whether that is working to keep girls in school and delaying marriage, to ensuring that women have the needed access to credit to start and grow businesses.
- Second, economic growth and global security are intertwined. The more we can ensure that we are using all of our talent to solve problems and build economic institutions, the more stable our globe will be. Statistics show that the countries investing in women are more likely to be stable, democratic and wealthy.
- Third, everyone has a role to play to increase women’s economic participation and ensure that women’s work is valued. Government, the private sector and NGOs can and must work together. Laws and policies are important in setting the norms.
Company practices need to be examined and often changed to tackle gender inequality. It’s heartening that the private sector is engaged, whether it is agreeing to the UN’s Women’s Empowerment Principles, or seeing that better family leave policies can make them more competitive in the race for top talent. But, we must all do more.
As we mark April 4 this year, let’s recommit to policies and practices that value women and their contributions, both today and into the future.