Equal Pay Would Cut the Poverty Rate for Children with a Working Mother by Half

Press Release

FOR IMMEDIATE RELEASE
April 6, 2017

Contact: Jennifer Clark | 202-785-5100 | clark@iwpr.org

New analysis finds that closing the wage gap would add $513 billion in wage and salary income to the U.S. economy

Washington, DC—According to a statistical analysis of federal data by the Institute for Women’s Policy Research (IWPR), the poverty rate for children with a working mother would be cut by nearly half if women were paid the same as comparable men, lifting 2.5 million children out of poverty.

The analysis, which uses regression analysis to consider the relationship of several factors related to women’s and men’s earnings, also estimates that the U.S. economy would have produced additional wage and salary income of $512.6 billion if women received equal pay, an amount which is equivalent to 2.8 percent of 2016 gross domestic product (GDP).

Women are the sole or co-breadwinner in half of American families with young children. If women were paid the same as comparable men—men who work the same number of hours, are the same age, have the same level of education, and live in the same region of the country with the same urban/rural status—working women would have earned an average of $6,870 more in a single year.

“Our analysis specifically aims to compare men and women who have similar human capital characteristics,” said IWPR President Heidi Hartmann, Ph.D. “Simply paying women fairly for their work would reduce poverty rates by half for them and their families and put half a trillion dollars in the pockets of working families—is there any current policy initiative that could come close to that? Getting to equal pay should be the policy goal of our lifetime.”

Additional findings from IWPR’s analysis include:

  • Nearly 60 percent of women would earn more if working women were paid the same as comparable men. Nearly two-thirds (65.9 percent) of working single mothers would receive a pay increase. 
  • The poverty rate for all working women would be cut in half, falling from 8.0 percent to 3.8 percent. The very high poverty rate for working single mothers would fall by nearly half, from 28.9 percent to 14.5 percent.
  • For the 15.3 million single women—divorced, widowed, separated, and never married women living on their own—equal pay would mean an even larger proportional drop in the poverty rate from 10.8 percent to 4.4 percent. Approximately 25.8 million children would benefit from the increased earnings of their mothers if they received equal pay.
  • Approximately 2.5 million children with a working mother would be lifted out of poverty because of the increased earnings of their mothers, reducing the poverty rate among these children by nearly half.
  • The United States economy would have produced additional wage and salary income of $512.6 billion if women received equal pay; this represents an amount equal in size to 2.8 percent of 2016 gross domestic product (GDP).

The briefing paper summarizes work prepared for and funded by LeanIn.Org for #20PercentCounts, a public awareness campaign highlighting the unfairness of the gender pay gap. LeanIn.Org is an initiative of the Sheryl Sandberg & Dave Goldberg Family Foundation to empower women to achieve their ambitions. Learn more at leanin.org/equalpay

The Institute for Women’s Policy Research (IWPR) is a 501(c)(3) tax-exempt organization that conducts and communicates research to inspire public dialogue, shape policy, and improve the lives and opportunities of women of diverse backgrounds, circumstances, and experiences.

-END-