4 Sound the Alarm

In 2013, Barbara found herself in a situation no one wants to be in: suddenly and unexpectedly out of a job. Receiving only $1,000 from Social Security to pay her rent and bills, as well as to eat, she temporarily relied on the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps. “No one really wants to go on this program,” she shared. “You have to hit rock bottom before you sign up. But it helped temporarily until I started working again.”

Barbara is not alone. Women’s economic opportunities related to jobs, income, professional development, and wealth have never been more at risk. That’s a strong statement, but there are facts to back it up. As two-thirds of all minimum wage earners,¹ women not only face wage and hiring discrimination but are also at the epicenter of a huge crisis in our nation related to wealth inequality and our rapidly shifting work structures. In the last chapter, we covered the top 10 percent of earners who are hitting glass ceilings. Now we draw our focus to the 90 percent of women in our nation, many of whom are struggling to get by in a changing economy where wealth inequality is expanding and the fastest growing job sectors in our national economy are in low-wage industries.² These include retail, food service, and direct-care industries (which employ domestic workers and the people taking care of our homes, children, and elders). In addition to this rapid expansion of low-paying jobs, the “gig economy”—the rise of short-term contract work instead of full-time positions—as well as disruption across industries, automation, and a shift from holding one or two jobs in our lives to many, all demonstrate how work has changed for most Americans.

Because of these shifts, fewer and fewer women have access to economic protections like job-based retirement, health care, and other traditional employer-linked benefits that play a role in stabilizing economic security. Addressing wealth inequality will be crucial in the next wave of the women’s movement. The need for universal protections and benefits that stay with the worker instead of being tied to a specific workplace, which everyone—at every wage level—can access, is becoming increasingly urgent. This urgency is partly because jobs within the growing “gig economy” are largely missing these crucial protections. It’s also because today, the lower the wage someone earns at their job, the less likely that person is to have access to necessary workplace protections like earned sick days, paid family/medical leave, adequate health care coverage, and affordable childcare. These protections are a given in most other industrialized countries. We are in a perfect storm. Shifting work structures and a damaging lack of workplace benefits and protections are happening at the very same time that the incomes of women are increasingly needed to fuel the family budget and as female-dominated, low-wage jobs are among the fastest growing employment sectors in our economy.³

Fast. Growing. Those sound like good words. Working in one of the fastest job growth sectors could sound positively great until you have to rely on minimum or low wages for things like feeding kids and putting a roof over your family’s head. Pricilla is a good example of how this plays out in real life. A mother of four, Pricilla works in the direct-care industry as a home care worker in North Carolina. Five days a week she’s on the late shift, taking the bus at three p.m. to care for as many as twenty people each day, often not getting home until after midnight. Pricilla earns only $12 per hour after five years on the job and doesn’t have paid sick days or vacation. As a leader with We Dream in Black (a program within the National Domestic Workers Alliance), Pricilla has been raising her voice so the work she and other home care workers perform is valued. She said, “We should be treated for the quality of the work that we perform and get paid for that quality as well.”

But that’s not happening. The average pay for domestic workers, including those in home care like Pricilla, is low and discriminatory. Domestic and farm workers have long been unfairly excluded from critical worker protections established by the Fair Labor Standards Act. That’s largely because, when the law was passed in 1938, members of Congress from Southern states didn’t want to include farm or domestic workers, who were primarily Black. This is a big deal because the Fair Labor Standards Act established the forty-hour work week and mandated that employers pay the minimum wage and overtime pay. But domestic and farm workers still aren’t fully protected by the Fair Labor Standards Act. This has got to change.

Women are now the majority of workers in these job sectors, and it is these job sectors that are expected to have the most job growth in the coming decade. Specifically, direct-care and in-home occupations such as in-home direct-care aides to elders and people with disabilities, as well as in-home childcare providers, are expected to grow 53.2 percent, compared with a much lower 14.3 percent growth for other occupations.⁴

Though this job sector provides ample opportunity for people to find work, it’s on us to make sure that this sector provides economic security to the people who hold these jobs and fosters our economy at the same time. There’s a lot of work to do. To start, the wages in this sector are unethically low: The median hourly wage for a non-agency–based direct-care aide worker, which includes in-home health care aides and personal care aides,⁵ is $12/hour for a white worker, but only $10.37 for a Black worker and $10.53 for a Hispanic worker in that same profession.⁶ It also can’t be ignored that direct-care and domestic workers, and workers in many other fast growing low-wage job sectors, often don’t have workplace protections or family economic security policies, and are also regularly hard hit by wage theft, which means not being paid at all for some or part of their work.

The key factor driving this fast job growth in the direct-care sector is the “Silver Tsunami.” In 1930, seniors over age sixty-five were about 5 percent of the population, but today they make up 15 percent. In 2050 they’ll make up 22 percent; and by 2060 seniors will make up a full 24 percent of our population.⁷

The Silver Tsunami means that a lot of eldercare is going to be needed, and much of this work is carried out by domestic workers as well as by home care aides, home health aides, personal aides, and certified nurse assistants.

Ai-jen Poo of the National Domestic Workers Alliance is deeply involved in raising workers’ voices and won a MacArthur “genius” grant for her work. She dove into this area of advocacy after visiting her grandfather in a nursing home with substandard care. “He begged me to take him out of there. But I couldn’t,” recalls Ai-jen. “Through my grandfather, I found out that our care system is dehumanizing and problematic all around. I knew that the lack of dignity my grandfather faced was also experienced by the care workers. These jobs are some of the most vulnerable and also undervalued in our whole economy. But this situation isn’t impossible to fix. There are better solutions than what we’re doing now.”

Domestic workers aren’t the only women being underpaid for hard work. Though nearly 70 percent of our GDP is based on consumer spending,⁸ job growth in the United States has mostly occurred in low-wage jobs that barely allow people to pay their bills. If people don’t have funds to spend at local stores, to buy kids that new pair of shoes, to see a movie, then both businesses and our consumer-fueled economy will falter.

Raise the Wage

At just over half of our population, women hold up more than half the sky. But our half weighs more, costs us more, and is the heaviest. In fact, women are 30 percent more likely than men to live in poverty.⁹

On the whole, one in seven people in the United States is living in poverty right now. But when you dive into the numbers, it’s clear that the sky isn’t only heavier for women, it is also heavier for people of color.¹⁰

The total number of white people who are living in poverty—27 million—exceeds the total number of people in any other race or ethnicity who are living in poverty. But that 27 million number only represents 11 percent of all white people. In comparison, a total of 11 million Hispanic people (19 percent), 9 million Black people (22 percent), and 2 million Asian people (10 percent) are living in poverty.¹¹ It’s easy to see the compounded impact of discrimination over time in the percentage of people of each race and ethnicity living in poverty.¹²

Increasing the minimum wage for everyone, including direct-care and domestic workers, is absolutely necessary to combat poverty. This would have clear benefits for millions of low-wage workers as well as for the strength of our overall economy, especially since our economy and workforce are shifting quickly. In fact, it’s safe to say that raising the minimum wage is now a bigger deal than at any time in recent history.

David Rolf rose up the ranks of union organizing to become president of SEIU Local 775 and vice president of the national SEIU. To say that David pays close attention to labor force trends is an understatement. After working in labor policy for several decades and doing a tremendous amount of research, David observed that raising the floor for the minimum hourly wage has become even more critical as many protections for workers have eroded or been outright abandoned. This erosion ranges from moving to defined contribution pensions (retirement plans that an employee pays for) instead of defined benefit pensions (retirement plans the employer pays for); to offering high-deductible health care plans (which places a higher financial burden on the employee) instead of employer health care coverage (which places the financial burden on the employer); and also includes eliminating collective bargaining. All of these changes—and more—transfer the cost of doing business from the actual business to the individual worker.

These changes, combined with low or stagnant wages, create a crisis for women and families.

Cindy, a married mother of one child who lives in Florida, has experienced this crisis firsthand. Her husband works at a temporary job that he’s had for the last two years, making minimum wage (just under $8 an hour), and she works for Red Roof Inn, also at minimum wage. In order to pay basic health insurance, car insurance, and have food for their daughter, Cindy and her husband went into debt paying for their home and, ultimately, were evicted. They now live in a three-hundred-square-foot room at the hotel Cindy works for, which deducts $300 every two weeks from her check. They had to go on the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) to be able to provide enough food for their daughter, and both Cindy and her husband eat only one meal a day.

Cindy remarks, “When people say the minimum wage is enough to live on, I don’t know what cost of living they are looking at, but to me it seems impossible to surmise that it would come even close to being able to meet even the most basic of needs. We’re not the only ones in this hard situation. In the hotel I work at there are over a dozen families (single or both parents with children) trying, and failing, to make a life for themselves, many of whom are making more than the current minimum wage. Is this the new American Dream?”

The majority of people who earn the minimum wage are women—28 percent of whom have children.¹³ Many do critical work in our communities like preparing and serving food, cleaning offices and schools, and caring for the elderly.¹⁴ More than half are working full-time and still living below the poverty line.¹⁵ This is destructive for a whole host of reasons. One of the most important reasons is that, in our consumer-fueled economy, women and moms make nearly three-quarters of purchasing decisions.¹⁶ That’s a lot of consumer power. But it also means that when women and moms aren’t paid fairly and don’t have funds to spend, our entire economy is negatively impacted.

The minimum wage is far too low for women, for families, and for our economy to thrive. In 2017 the federal minimum wage was still stuck, as it has been since 2009, at the deplorably low rate of $7.25 per hour,¹⁷ or $15,080 per year for a person who works full-time year-round with no breaks. And the federal minimum wage for tipped workers is just $2.13 per hour. Nearly half of all current minimum wage workers have had some college experience or an associate’s degree. One in ten minimum wage workers has a bachelor’s degree or higher. Only 20 percent of minimum wage workers are teens.¹⁸ The scale of the income inequality crisis overall is illustrated by the fact that 50 percent of all working people in our nation make $17.81 per hour or less each year,¹⁹ which means that a large number of people are holding low-wage jobs.

Think about those low numbers. Remember that women are currently 42 percent of all primary breadwinners for families and that three-quarters of moms are in the labor force contributing to the family income.²⁰ Particularly with women making up nearly two-thirds (64 percent) of minimum wage workers,²¹ raising the minimum wage would be a good start on the road to addressing the disproportionate income inequality and poverty that women face and to boosting our economy.

But hold on to your hats, because the data gets even more troubling: The federal minimum wage for tipped workers is just $2.13 per hour, and over half of tipped workers are women, disproportionately women of color, and over a quarter are moms. Tipped workers haven’t seen a raise since 1991.²²

Victoria worked for tips for over twenty years while her kids were in school so she could be home when they were awake and they could spend more time together. She notes: “$2.13 an hour is not only horrible wages, but most people do not understand that tipped workers are taxed based on a percentage of their sales, not how much they make in tips. This often means they are paying income tax on tips they never received.” In addition, when a tipped worker gets laid off their unemployment benefits are based on the $2.13 an hour and no tips are included!

When Victoria got laid off from her full-time job as a waitress at a three-star restaurant, unemployment insurance only paid her $46 a week because of this unfair formula. She was taxed on her full earnings, but the restaurant only had to pay benefits based on the $2.13 an hour wage—not including whatever tips she might have received for working hard and doing well at her job. This subminimum wage for tipped workers is, in effect, legislated pay inequality for a majority female workforce, perpetuating the gender pay gap. To make matters worse, there’s rampant sexual harassment in the restaurant industry, which leads all industries in charges filed by women with the Equal Employment Opportunity Commission.²³

That being said, restaurant workers are organizing and speaking out, with the Restaurant Opportunities Centers United leading the charge to increase the federal and state minimum wages for tipped workers. Seven states have stepped up and eliminated the lower wage for tipped workers, including California, which has the nation’s largest restaurant industry.²⁴ Studies are showing that by offering one fair wage, these states are faring as well, if not better, in terms of sales and job growth in the restaurant industry, higher rates of tipping, and comparable menu prices.²⁵ The poverty rate among tipped workers is lower by one-fifth in states with higher minimum wages, and the reduction is most significant for workers of color—a full 18 percent of tipped workers of color in states with a subminimum wage live in poverty, compared to 14.5 percent in states without a subminimum wage.²⁶

It’s time for a little more myth busting in order to help raise the wage. Raising the minimum wage boosts the economy, not the other way around. Before we dive into this further, let’s get one thing clear: We’re aren’t talking about more than doubling the minimum wage tomorrow; we’re talking about an increase over time. Gradually raising the minimum wage to $15 by 2024 would directly lift the wages of 22.5 million workers and affect another 19 million workers who would benefit from a spillover effect. All in all, raising the minimum to $15 in 2024 would directly or indirectly lift wages for 41.5 million workers, or 25 percent of the projected labor force in 2024,²⁷ which is a significant boost to our consumer-fueled economy.²⁸ Multiple studies show these ripples would lift businesses and our economy in major ways.²⁹

Because low-paid workers have to spend much of their extra earnings fairly immediately on the necessities of day-to-day life, this injection of wages would increase consumer spending, which would help stimulate the economy and spur greater business activity and job growth.³⁰

In fact, a study from UC Berkeley Labor Center found that the poverty-level wages paid by employers cost U.S. taxpayers $152.8 billion each year in public support for working families who otherwise would not be able to put food on the table. By raising workers’ wages, fewer people will have to depend on programs like SNAP.³¹

Unemployment would also be affected in good ways by raising the wage. One study showed that raising the minimum wage would create 140,000 new jobs (or more).³² The Federal Reserve Bank of Chicago says a raise in the minimum wage would help our economy by increasing household spending nationwide by roughly $48 billion. That’s enough to move the needle on our gross domestic product.³³ It’s clear that raising the minimum wage boosts families and our economy. It’s no coincidence that Seattle, the city with the highest minimum wage in the country (approaching $15 per hour), also has the nation’s highest job growth.

Our Economy Has Changed; Our Policies Must Change Too

The minimum wage needs our close attention, particularly because our economy has changed. We used to be more economically based on manufacturing, but today, our economy largely depends on consumer spending. Jobs in the manufacturing sector have declined, due to globalization and a variety of other factors (including automation across multiple job sectors ³⁴). It also means that the job growth that does exist is often focused in industries that have low wages, offer few if any benefits, and are often in female-dominated sectors. This combination of economic and human factors is the reason many tech, union, and industry leaders along with politicians are pushing to not only raise the minimum wage and protect existing safety net programs but also to move forward innovative policies to boost our economy and families alike, like a possible universal basic income, which is a set amount of money that everyone would receive each month.

We need to work to create a better economy full of better jobs, and we also need to make sure that there are supports in place for people right now—not in the future, not when Democrats win back Congress and the presidency, not when we solve all of the problems we currently face, but right now. This means looking into innovative solutions that affect women and their families and also ensuring the strength and continuation of our social safety net programs—like SNAP, WIC, the earned income tax credit (EITC), Temporary Assistance for Needy Families (TANF), Head Start, Medicaid, and more—that immediately inject funds into our economy as they allow people to buy the groceries and other basic goods and services needed to thrive and survive. For instance, for every $1.00 that goes into funding SNAP, our economy gets back $1.70.³⁵

Safety net programs fuel our economy. Don’t let anyone tell you otherwise. For instance, Social Security provides vital economic security to American women. Since women, on average, are family caretakers, receive lower pay, are less likely to have private pensions (retirement), and live longer, Social Security is particularly important to our lifetime well-being. “Social Security is a women’s issue,” explained Nancy Altman, president of Social Security Works. “Social Security has transformed the nation, allowing dignity and independence when wages are gone.”

Women fuel our economy, too. Our buying power is one of the biggest drivers in our economy overall, not trickle-down economics, as some elected leaders have erroneously asserted. In fact, the whole idea of trickle-down economics, where the ultra-wealthy and corporations are given tax breaks that are usually funded by cutting safety net programs with the supposed idea that this will fuel our economy, has been proven time and time again not to work. It’s a fantasy that doesn’t materialize in the real world. In the past, both wages and productivity have grown substantially faster in decades where corporate tax rates were higher, not lower. Neither the Reagan-era tax reform nor the cut to taxes on dividends in 2003 increased wages or productivity.³⁶ Look at it this way: A billionaire can only buy and eat so many burgers, and then the rest of their funds often get locked away in investments or savings accounts, where they aren’t doing much to fuel our consumer-driven economy. On the other hand, a woman who buys groceries and essentials using the money from a safety net program puts those funds to work in our economy and our communities immediately. We need to change the way we think about our safety net programs. Instead of being viewed as handouts, it should be understood that these programs actually lift and boost our entire economy.

We, as women and as a nation, are facing some extreme challenges. We must protect and advance programs that we know work, like those that build our safety net. We must also explore and advance innovative new programs to match our modern economy. I don’t have all the answers here; I’m not sure anyone does. But a ton of conversation and research is going on in response to the fact that as our economy is rapidly transforming, so are the job opportunities, the ways that women work, and the overall workforce.

Wealth Inequality Is a Crucial Women’s Issue

Roll up your sleeves and put on your data detective hat: It’s time to dive into the subject of income, wealth inequality, and women. Income inequality is how income—which includes wages and salaries—are distributed across a population. Basically, this is the gap between people who make a lot of money and people who don’t make a lot.³⁷ (For example, if everyone made $50,000 a year, we wouldn’t have income inequality.) In the United States, income inequality—the gap between the amount people are earning at the high and low end of the incomes scale—has been rising steadily since the 1970s. Partly, that’s because the wealthiest Americans have been earning more of the overall total available income in the United States.³⁸ This is a relatively new trend. One hundred or so years ago, the wealthiest people got their income primarily through the wealth of prior generations. In the United States, we now have a category of working wealthy.³⁹

Women are particularly hard hit by income inequality because we are facing wage, hiring, and advancement discrimination, all of which directly impact our income. But that’s not all: There’s also a trend of growing wealth inequality.

Wealth inequality is the unequal distribution of assets among people across a population—the gap in overall wealth between the rich and poor. This can include things like readily available cash in a savings account, but also reflects assets like retirement accounts such as 401(k)s, home equity, and investments like stocks and bonds. The United States has a higher wealth gap between rich and poor people than any other developed nation.⁴⁰ This wealth gap is largely fueled by the super-rich (the “1 percent”), with a significant rise in the wealth gap taking off in the 1980s.⁴¹

The nexus between income and wealth inequality is where it gets particularly tricky for women: Due to the income inequality and opportunity gap that women are facing, as well as other intersectional discrimination, wealth inequality often hits women the hardest. Single women, in particular, are negatively impacted in this way. This is not a small group of people: 49 percent of women over eighteen are unmarried at any given point,⁴² and nearly half of all marriages end in divorce.⁴³

Let’s dig into wealth inequality through the lenses of gender and marriage for a moment, too. Most wealth in our nation is held at the household level, many of which are mixed-gender households and benefit from the relative lack of economic discrimination that men face. Unmarried women are less likely to hold just about every kind of asset than unmarried men. Divorce also negatively impacts women’s economics more than that of men. For example, single women experience:

Higher debt-to-income ratios

More wealth tied up in housing, which can be volatile

Lower overall savings

Less access to credit (women-owned businesses are more likely to fail at least in part because of this)

Greater likelihood of labor market uncertainty ⁴⁴

It turns out that tricky isn’t even the half of it. Inequality in all its forms is a too often silent, persistent, and pernicious crisis—and it’s a crisis that has a disproportionate impact on women, particularly women of color, single women, and moms. For instance, because of wealth inequality, one recent study found that a middle-class income doesn’t directly correlate with middle-class economic security for everyone. For instance, white households earning an annual income between $37,201 and $61,201 owned eight times as much wealth as Black people in that same income bracket, and ten times as much as Latino people in that same income bracket.⁴⁵ The racial wealth gap is much bigger than the wage gap, and this impacts whole communities being able to pay for things like college, times out of the labor force, retirement, starting a business, buying a house, passing down resources to children, investments, sabbaticals, and much more.⁴⁶ This is a big deal. This is one example of why our fight for equity and equality must always be intersectional—and it is part of why addressing wealth inequality will be crucial in the next wave of the women’s movement.

Few people realize that wage inequality and wealth inequality aren’t the same thing, assuming that everyone starts at the same place on the same playing field. But we don’t. We have to fight for both equality and equity, so at least we can all start equitably on the same field. It’s only fair. Some forms of inequity and inequality are rarely discussed but have a tremendous impact on women, families, and our overall economy, and wealth inequality is one of those.⁴⁷ The United States is a wealthy country overall; it’s just that the wealth is extremely unequally and inequitably distributed.

The net wealth in the United States is over $84 trillion, according to the Federal Reserve.⁴⁸ But there is an enormous problem within that $84 trillion: The wealthiest 10 percent of U.S. households hold an astonishing 76 percent of all the wealth in our country, and the bottom 40 percent of U.S. households have negative wealth. What does this end up looking like for families? A full 44 percent of adults say they could not easily cover a $400 emergency expense, and 47 percent say their spending was higher than their income last year.⁴⁹

Angela shared that she spends $400 per month more for food and gas than she did just a few years ago because the minimum increase in salaries that Angela and her husband received hasn’t kept up with the rising prices on necessities. Rising wealth inequality is playing a role in Angela’s financial worries. Partially due to unfair wages, partially due to investments like real estate and the stock market, and partially due to inherited funds, wealth inequality is a constant in most of our lives. And at the end of the day, very little of the wealth in our nation is going to the majority of people who work (and who spend the most money fueling our economy). The problem isn’t just what income we’re earning; it’s also that with the wealth gaps that already exist many women and people of color are starting way behind.

Starting from behind can happen in a multitude of ways. So can starting ahead. People from wealthy families often don’t face college debt, they get assistance with a down payment for a home, and they even make contacts with other wealthy families for jobs and internships—not to mention that people from wealthy families often have the option of doing unpaid internships when most others don’t have that option because income is a necessity.

In short, wealthy people have more resources and can more easily set up the next generation to also be wealthy—without having to open any doors for additional people to work their way up the ladder of the American Dream. The playing field is far from level. We need equity and equality. We need the same starting line for everyone. We all need access to the American Dream.

The Current State of the American Dream

We’re a country that self-identifies as dreamers, a people filled with hope. But the level of income and wealth inequality in our nation right now is closing the door to the American Dream for too many. While 40 percent of people in the United States may think that it is common for people born into poor families to work their way toward the top, the sad reality is that, right now, 70 percent of those born into families at the bottom of the income distribution never even make it to the middle.⁵⁰ This isn’t an arbitrary thought: Many experts have been researching this area, including two Princeton professors, Anne Case and Angus Deaton. As they’ve researched the impact of income inequality combined with lack of access to education and advancement opportunities at work, they’ve found that the crisis of inequality is also a crisis of hope and health that has rippling negative repercussions for people across every race and ethnicity.

Too many women have to walk uphill both ways through life. Too many of us are working hard, but not earning a living wage because the minimum wage is insufficient to fuel our families or our economy. Too many of us, again and again, face tax policies that regularly give breaks to the wealthy and piles on the rest of us, which sucks the wind out of the economy.⁵¹

The United States isn’t doing well when it comes to income inequality overall. We rank far behind many other nations. In fact, the United States of America is now the third worst nation in terms of income inequality—after Chile and Mexico—among the Organisation for Economic Co-operation and Development countries.⁵² The high level of income inequality in our nation led MIT economist Peter Temin to assert that we’re regressing to developing nation status. In 2017, Temin noted that the United States has largely become a two-track economy, with roughly 20 percent of our population educated and in good jobs, and 80 percent working in the low-wage sector with little hope of advancement.⁵³

This situation can’t be ignored. Wealth and income inequality are important for everyone to address, regardless of where you are on the income spectrum. That’s because data shows that the bigger the gap gets between the rich and the poor, the lower overall economic growth will be, the fewer the jobs will be, and the less economic security and hope there will be for women and families. As I’ll discuss further in the next chapter, many women are hitting an economic wall when they become moms and begin to raise a family. In other words, even when women work hard and play by the rules, many struggle to put food on the table or advance up the career and wage ladder. Essentially, the ladder up is broken at the same time as the waters of economic inequality are rising at the feet of America.

Those waters are rising the fastest at women’s feet.

4

Sound the Alarm

Raise the Wage

Our Economy Has Changed; Our Policies Must Change Too

WHAT WE CATCH IN OUR SAFETY NET

Wealth Inequality Is a Crucial Women’s Issue

The Current State of the American Dream