Tuesday, September 10, 2013
The Rise of (and need for) Female Economic Power
When I was growing up, my father noted that something had noticeably changed in the American economy since he was a young man. Whereas his parents could get by quite well and even live a middle-class lifestyle on just one income, that had changed by the early 1970's.
By that time, maintaining a grip on a middle-class lifestyle typically required two incomes, forcing both parents into the workforce.
Since that time, the situation has become even more pronounced.
According to the Families and Work Institute in New York, 80 percent of today's married/partnered couples have both people in the work force, up from 66 percent in 1977.
The proportion of wives working year-round in married-couple households with children increased from 17% in 1967 to 39% in 1996.
By 2012, the share of married-couple families with children where both parents worked was 59 percent. And the labor force participation rate (the percent of the population working or looking for work) of married mothers with a spouse present was 68.3 percent, according to the BLS.
Of course, the number of women in the workforce is considerably higher when you include single and divorced women. And a dual-income household includes unmarried people, such as cohabiting couples of both sexes, as well as roommates who share expenses.
The issue is the number of families with children that require two incomes just to make ends meet. For most American families, there is no choice in whether a mother or father gets to stay home and parent their children. Having two working parents is now an economic necessity for almost all families.
The annual median wage fell in 2010 for the second year in a row to $26,364, a 1.2 percent drop from 2009, and the lowest level since 1999, according to David Cay Johnston at Reuters. And according to the Census Bureau, per capita income was $27,915 in 2011.
This is why most households now require more than one income to get by.
According to the Social Security Administration, 40.28% of all American workers currently make less than $20,000 a year. One in five people with a job earns only the minimum wage.
This just reaffirms why the majority of American households require two income earners, not just one.
Median household income has been sliding backward for the last six years, according to a new Census Bureau report. In 2007, at the beginning of the Great Recession, it was $55,480. By June, 2009, when the recession had officially ended, it had fallen to $54,478. And by June of this year, it had dropped to $52,098.
Income of that level does not go far in our economy, given the cost of food, energy, housing, education, and healthcare.
During the Great Recession, and even in its aftermath, companies cut jobs and salaries to get leaner and lower costs. But the financial struggles of average Americans are not just a matter of lower incomes; the problem is coupled with the continually diminished purchasing power of our money.
This is attributable to the pernicious effects of inflation, which is engineered by the Federal Reserve (meaning that it is intended). Inflation is not some mysterious phenomena. As the Fed has continually increased the money supply through the decades, it has steadily eroded and devalued the buying power of our money.
Inflation is a topic that I have explored repeatedly on this page through the years.
The effects of inflation, plus stagnant wages, have driven most American women into the workforce over the past four decades. This has resulted in such a historic shift that it can be aptly described as a sea change.
In 2010, for the first time in American history, the balance of the workforce shifted toward women, who now hold a majority of the nation’s jobs.
Women also dominate today’s colleges and professional schools: for every two men who will receive a B.A. this year, three women will do the same.
According to the Bureau of Labor Statistics, women now hold 51.4 percent of managerial and professional jobs — up from 26.1 percent in 1980. They make up 54 percent of all accountants and hold about half of all banking and insurance jobs. About a third of America’s physicians are now women, as are 45 percent of associates in law firms — and both those percentages are rising fast.
To be clear; not all working women are in the workforce simply out of economic necessity. Many women desire to work for a variety of personal reasons. Many of them have a skill or degree that they wish to utilize. Work can provide all people with a sense of community and of belonging. It can provide structure and a sense of purpose. Work can also be socially and mentally engaging. Additionally, it can provide a sense of identity and pride.
But there is no denying the economic impetus that has driven so many mothers into, or back into, the workforce.
It's bad enough that so many mothers are compelled to work as a result of economic necessity, even if they'd rather be at home with their young children. But they are also paid considerably less than their male counterparts for the very same jobs.
Women in the United States today are paid on average 77 cents for every dollar paid to men. The gap is even worse for African-American and Latina women.
Women ages 25 to 34 with only a high-school diploma currently have a median income of $25,474, while men in the same position earn $32,469.
Even among educated women, this wage-gap still exists.
The life-time earnings for a male with a professional degree are roughly 40 percent (39.59%) higher than those of a female with a professional degree, according to the Census Bureau. The lifetime earnings gap between males and females is the smallest for those individuals holding an Associate degrees, with male life-time earnings being 27.77% higher than those of females.
According to a new study done by the National Partnership For Women And Families (NPWF), the median yearly pay for women who are employed full time is $11,084 less than men’s.
This has has major implications for the ability of families and single women to afford essentials like food, housing and gas. According to NPWF, in more than 15.1 million families the woman is the breadwinner. And 31 percent of these families fall below the poverty line.
So, while women have advanced professionally in so many ways relative to men in recent decades, their pay still lags their male counterparts. This affects the men in dual-income households as much as it does the women.
If women were paid commensurately to men, all American families would benefit.
In 1970, women contributed 2 to 6 percent of the family income. Now the typical working wife brings home 42.2 percent. And four in 10 mothers — many of them single mothers — are the primary breadwinners in their families.
However, as women climb the ranks of the professional world, advancement eventually stalls out. Only 3 percent of Fortune 500 CEOs are women. But given societal trends, that will likely change sooner than later.
Women now earn 60 percent of master’s degrees, about half of all law and medical degrees, and 42 percent of all M.B.A.s. Most important, women earn almost 60 percent of all bachelor’s degrees — the minimum requirement, in most cases, for an affluent life.
This is the first time that the segment of Americans ages 30 to 44 has more college-educated women than college-educated men. So this is not a new trend; it has been underway for some time.
As women have stepped up and taken on increasingly larger roles in society and the workplace, their earning power has allowed many more families to maintain their foothold in the middle-class.
In fact, in many cases wives now out-earn their husbands — another historic shift. Of all married couples, 24 percent include a wife who earns more, versus 6 percent in 1960.
But as women have increasingly taken on a larger role in the workplace — whether voluntarily for personal reasons, or less voluntarily due to economic reasons — it has created a greater demand for child care and resulted in more latch-key kids. This has increased the pressure (and expense) for both parents.
It's laudable when women are able to enter the labor force at will to utilize their skills or degrees for their own self-fulfillment. But it's not so great when women must work just make ends meet for their families, yet get paid less than their male counterparts for doing the very same jobs.
The great middle-class expansion in the U.S. began following World War II. Women had entered the workforce during the war as a matter of patriotic duty and necessity. Millions of men were fighting overseas, so women stepped up and fulfilled many of the jobs suddenly left vacant by men.
In 1940, only 28 percent of women were working; by 1945, this figure exceeded 34 percent. In fact, the 1940s saw the largest proportional rise in female labor during the entire twentieth century.
However, more than half of the women drawn into the workforce by the war had left at the end of the decade. The Baby Boom had begun and for most of them work had become a choice — not a necessity.
In contrast, by 2011, 58.1 percent of women were in the labor force (which includes the noninstitutionalized civilian population, 16 years of age and over, that is willing and able to work and is either employed or actively seeking employment). But in recent years that percentage has been shrinking due to high unemployment. The women’s labor force participation rate peaked at 60.0 percent back in 1999.
Having more women working can be viewed as a sign of progress and of gender equality. But the wage difference between men and women remains very antiquated and even sexist. This bias is impacting nearly all American households.
The primary issue is that the post-war rise of the American middle-class was built largely on the backs of a single income-earner (typically men). But in order for the vast majority of American families to maintain their tenuous grip on that middle-class status, it almost certainly requires two incomes these days.
That's surely not a sign of progress.