Policy Brief June 2012
Louisiana: State of Pay Inequity An Analysis of the Gender-Based Wage Gap, Policy and Business Proposals, and the Economic Security of Louisiana’s Families As more and more women become the primary breadwinners for their families, policymakers are beginning to rethink traditional approaches to overcome the gender wage gap. The high unemployment rates and economic instability associated with the global recession have shed new light on the crucial role that working women play in family-caregiving, local communities, and the larger economy.
The Challenge for Louisiana: Balancing Business and Families Family Economic Security In Louisiana, women make up 52% of the population and nearly half of the workforce.i Women are more likely than ever to be in the workforce as key breadwinners, children are more likely to live in families in which both parents work, and families are struggling more than ever to make ends meet. Working families urgently need public policies that help them meet the dual demands of work and family.
Failure to Act in the State Legislature In the 2012 Legislative Session, numerous bills were introduced to address the issue of equal pay for men and women. SB 568 by Senator Peterson, HB 573 by Representative Norton, and SB 189 by Senator DorseyColomb would have established an Equal Pay Act for Louisiana. All three bills died in committee. SB 577 by Senator Peterson would establish a taskforce to examine the issue of equal pay in Louisiana and make recommendations on how to address the wage gap. The bill passed both the House and the Senate, but was vetoed by Gov. Jindal due to the “costs” it would take to implement such a taskforce. At a time when our families and our economy are struggling, Governor Jindal vetoed legislation that would only create a task force to help understand and address wage disparity.
A Non-Partisan Issue Improving the economic outlook for families by addressing wage disparity should not be a partisan issue. Most citizens support the core American values of fairness and equality, including ways to improve the wages and lives of families no matter their race, geographic location, socioeconomic status or political affiliation. By vetoing the measure, the Governor has shown his lack of commitment to the business implications of the wage differentials and the impact on the economy in Louisiana. Balancing the interests of business and Louisiana’s Working Families families is critical for the future of Louisiana. 1,042,165 Women Work (47% of the State Workforce) Contents of Policy Brief: 739,181 Children in Families in which The Wage Gap All Parents Work (70 %) The Benefits Gap 296,000 Households Headed by Economic Impact on Families and Women Businesses 560,000 Family Caregivers Business Solutions Source: U.S. Census Bureau Policy Solutions
Not just a “Woman’s Problem”: Economic Implications of the Gender Wage Gap Real Wage Gaps. Real Implications. With a poverty rate of 18% and a median income of $41,896 Louisiana is in the top 10 poorest states in America, according to 2010 U.S. Census Bureau. In Louisiana, the median pay for a woman working full time, year round is $30,600 per year, while the yearly pay for a man is $45,524 per year. This means that women are paid 67 cents for every dollar paid to men, amounting to a yearly gap of $14,924 between full-time working men and women in the state.ii
Dual Discrimination for Women of Color Women of color experience even greater disparities. Latinas working full time in Louisiana are paid just 60 cents for every dollar paid to all men, which amounts to a difference of $18,330 per year. African American women fare worse, being paid just 53 cents on the dollar, or $21,536 less than all men per year of employment.iii
Working Families in Louisiana Nearly 300,000 households in Louisiana are headed by women. According to the Center for American Progress (2012), “Because of this gap women working full time are able to afford less education, housing, transportation, food, and health care for themselves and their families than their male counterparts. As a result women and femaleheaded households are more likely to be in poverty and less likely to have health insurance. The pay gap translates into a significant economic disadvantage for women and their families, especially when nearly two-thirds (63.9 percent) of women are now either the primary breadwinner or a co-breadwinner, bringing home at least 25 percent of their family’s income. But the gender pay gap isn’t just an issue of fairness. It is also a question of economic empowerment, both for working women and for their families.”iv
Federal Laws on Equal Pay In 1963, Congress passed the Equal Pay Act, which requires employers to give men and women employees “equal pay for equal work.” One year later, in 1964, the Civil Rights Act was passed. Title VII of that act bars all discrimination in employment, including discrimination in hiring, firing, promotion, and wages on the basis of race, color, religion, sex, or national origin. Yet these legal protections have not ensured equal pay for women and men. The first piece of legislation signed into law by President Barack Obama, the Lilly Ledbetter Fair Pay Act of 2009, provides some additional protection against discrimination. The law clarifies that pay discrimination occurs when a pay decision is made, when an employee is subject to that decision, or at any time an employee is injured by it; employees have 180 days from any of those instances to file a claim.
Not Just a Louisiana Problem Ensuring that women receive equal pay for equal work is a common-sense issue that affects all working women and their families. By eradicating unfair treatment in the labor market, we can help families gain the resources they need to ensure that their children have access to a better future.
Skeptics--Is There Really a Wage Gap? Skeptics of the pay gap claim the difference in pay between men and women is because male workers are more educated and more experienced. But even after adjusting for education and age and other factors, a wage gap remains. The reality is that wage disparities or discrimination can be difficult to identify and harder to prove. Often, the discrimination is subtle and plays out over years in numerous hiring, compensation, promotion and other workplace decisions. According to the National Women’s Law Center, Louisiana has the 2nd largest wage gap between men and women in the country.
States with the Greatest Wage Gap States
In 2012, the Paycheck Fairness Act is a comprehensive bill aimed at updating the Equal Pay Act by closing loopholes, strengthening incentives to prevent pay discrimination, and prohibiting retaliation against workers who inquire about employers’ wage practices or disclose their own wages. “This is not an issue we as Americans should be divided on. Workplace equality is essential, especially as an increasing proportion of women become breadwinners for their families. Today, women make up almost half of the workforce in Louisiana, but they only earn 69 cents for every dollar their male coworkers do. On average, these women will earn $598,000 less than their male counterparts during their lifetimes and will have to stretch their budgets further in order to make ends meet.”
- U.S. Senator Mary L. Landrieu
1.Wyoming 2.Louisiana 3.Utah 4.Alaska 5.Conneticut 6.Indiana 7.Michigan 8.West Virginia 9.New Jersey 10.Illinois
Male Median Earnings $50,854 $45,524 $46,609 $56,643 $60,168 $44,851 $48,953 $42,126 $57,978 $50,549
Female Median Earnings $32,425 $30,600 $32,163 $42,376 $46,004 $32,221 $36,413 $29,651 $45,936 $38,638
$18,429 $14,924 $14,446 $14,267 $14,164 $12,630 $12,540 $12,475 $12,042 $11,911
Source: National Women’s Law Center
However, even when looking at occupation choice data from the U.S. Census Bureau 2010 American Community Survey shows that a pay gap still exists in Louisiana.
Traditional Men’s Occupations
Traditional Women’s Occupations
Male Median Earnings
Female Median Earnings
Male Median Earnings
Female Median Earnings
Community and Social Services
Teachers and Librarians
Occupations Business and Financial Operation Architecture and Engineering
Healthcare support Cooks and Waiting Office and Administrative Support Sales and related Occupations
Source: Institute for Women’s Policy Research
The Wage Gap is Not a Matter of Personal Choice The wage gap remains even when accounting for personal choices – such as work patterns and education – according to a Government Accountability Office study. Working mothers pay a “penalty” for having children while fathers get a bonus. Nationally, women with children are paid 2.5 percent less than women without children, while men with children experience a boost of 2.1 percent over men without children.
The wage gap persists regardless of industry- in the industries with the most employees – education and health services, wholesale and retail trade, financial activities, and professional and business services – women are consistently paid less than men. In the financial industry, women are paid just 71 cents for every dollar paid to men. In manufacturing, just 74 cents. In education and health services, 77 cents. And in public administration, women are paid 79 cents for every dollar paid to men. Across industries, women are paid disproportionately low er salaries than their male counterparts. The wage gap exists regardless of education level-despite women’s increasing presence in higher education, education does not reduce the wage gap. Women with professional degrees are paid just 67 cents for every dollar paid to men with professional degrees. Further, women with doctoral degrees are paid less than men with master’s degrees, and women with master’s degrees are paid less than men with bachelor’s degrees.
Fact Sheet from National Partnership for Women and Families
Minimum Wage Is A Floor, Not A Ceiling! The first minimum wage law in the United States was established on June 4, 1912 in Massachusetts. The first federal minimum wage law was established in 1938. The purpose of a minimum wage law was not only to protect workers from abuse by their employers, but to also ensure fair competition by requiring that all businesses play by the same rules. The minimum wage peaked in 1968, and has since trailed behind the rising cost of living. In fact, the minimum wage would be $10.55 today if it had kept pace with inflation. Instead, it’s only $7.25 an hour – or just over $15,000 a year.v
Minimum Wage Jobs have come to define a significant share of the labor market with low-wage industries among the economy’s fastest-growing sectors. Some of the lowest paid occupations are expected to create the largest numbers of new jobs over the next several years. For many employers low wages are part and parcel of a robust growth strategy. vi Raising the minimum wage is considered one of the quickest ways to close the gap between women’s and men’s earnings. Women comprise the majority of low-wage workers in this country making up 57.5 percent of US workers who earn the minimum wage or slightly above. Although data are not available for males/females by state, Louisiana is tied with Arkansas for 49th place (5.2 percent) in the percent of workers paid at or below the minimum wage, ranking behind Mississippi (5.3 percent) and West Virginia (5.6 percent). Roughly two-thirds of all low-wage workers are in service-type occupations, mostly in food service jobs.vii Another consideration in raising the minimum wage as a way of improving women’s earnings is that more women, and particularly women with children, and women who work part-time, spend a larger part of their employment years in minimum wage positions and are therefore more likely to have what is called a “minimum wage career.” As women move in and out of the labor force to care for children or the elderly, their re-entry into positions is often at the bottom, and at the minimum wage.viii
Living Wage Calculation for Louisiana The living wage shown is the hourly rate that an individual must earn to support their family, if they are the sole provider and are working full-time (2080 hours per year). The state minimum wage is the s ame for all individuals, regardless of how many dependents they may have. The poverty rate is typically quoted as gross annual income. We have converted it to an hourly wage for the sake of comparison. Wages that are less than the living wage are shown in red. For other family configurations that aren't shown here, we've provided a spreadsheet to help with adapting the results below. The Living Wage was calculated for 2012 by Dr. Amy K. Glasmeier and The Pennsylvania State University. Hourly Wages Living Wage Poverty Wage Minimum Wage
One Adult $7.83 $5.04 $7.25
One Adult, One Child $15.39 $6.68 $7.25
Two Adults $12.33 $6.49 $7.25
Two Adults, One Child $19.89 $7.81 $7.25
Two Adults, Two Children $26.09 $9.83 $7.25
Not Just Wages, But Benefits Gap Too Now, more than ever, Louisiana’s workers – both women and men – need workplace and public policies that will promote healthy careers and healthy families.
The most significant problems with minimum wage jobs are that most employers offer no benefits such as health insurance, paid sick leave, family medical leave and supports for child care or family care.
Insurance Access to health insurance is an important benefit for employees. Unfortunately, over 750,000 people in Louisiana are uninsured.
Types of Coverage for Health Insurance People who do not have health insurance
People covered by Individual Policies People are covered by employer sponsored health insurance People covered by Medicaid Other Public Insurance- Medicare, VA etc. Kaiser State Health Fact Sheet-statehealthfacts.org
# of People 759,000
Percentage 16% 5%
Paid Sick Leave More than 600,000 workers in Louisiana don’t have the right to earn paid sick days to recover from common illnesses, care for their families or get necessary preventive care. Working women, who are often their families’ primary caregivers and sole or co-breadwinners, face impossible choices between their own health and the health of their families when illness strikes if they don’t have this basic right. Low-wage workers and those in the service, hospitality and restaurant industries are particularly vulnerable because very few have paid sick days through their employers and their families too often already live on the brink of financial disaster. Women are increasingly becoming the breadwinner or co-breadwinner of their families. However, women are still expected to care for a sick child, family member, or parent. Particularly with single mothers missing a few days of work to care for a sick child results in lost wages. Imagine a single mother of 2 and one of the children gets sick which requires taking off for three days. If the job pays $10 an hour and the mother works 8 hours a day her family would have lost $240 for the week.ix
Family Leave Policies Changes in the demographic composition of the workforce mean that more women and men are actively engaging in both paid work and family care work. As of 2010, the percentage of children who had both parents (in married‐couple families), or their only parent, in the labor force reached 72.3%, an increase of 13 percentage points since the mid‐1980s. x Despite public conversation and energy around the value of strong families and secure childhoods, a mere 11% of private sector workers and 17% of public sector workers report having access to paid family leave; among those earning in the bottom quarter of wages, those percentages drop to 5% and 14% respectively.xi A recent Census Bureau report concludes that, between 2006 and 2008, only 50.8% of women who were employed during pregnancy used some form of paid leave after their child’s birth. Not surprisingly, the likelihood of reporting paid leave was higher for women aged 25 and over, for white women, for married women, and for women with a college education. Only a third of working mothers without post‐secondary education reported paid leave time.xii Women who take paid leave are 39% less likely to receive public assistance and 40% less likely to receive food stamps in the year following a child’s birth, when compared to those who do not take any leave. Not only is paid leave associated with fewer dollars in public assistance spending, it reduces the chance that a family receiving public assistance will increase its use of public funding following a child’s birth.xiii
Increase Support for Childcare Support Child care helps children, families, and communities prosper. It gives children the opportunity to learn and develop skills they need to succeed in school and in life. It gives parents the support and peace of mind they need to be productive at work. And, by strengthening the current and future workforce, it helps our nation stay competitive. Yet many families, especially in today’s economy, have great difficulty paying for child care.
The average fee for full-time care ranges from $3,600 to $18,200 annually, depending on where the family lives, the type of care, and the age of the child. Child care assistance can help families with the high cost of care; particularly low-income families who are struggling to meet their basic expenses and stay employed in a challenging time. Many times women’s careers are disrupted by the need to care for a child. Numerous companies have reported that childcare issues often cause tardiness and absenteeism in employees. A history of continuous work is often correlated with higher pay and better benefits for employees.
Obstacles to Solving the Wage Gap No Local Paid Sick Leave Policies Unfortunately, the 2012 Legislative Session limited solutions for local municipalities. Senate Bill 521 by Sen. Ronnie Johns signed by Governor Jindal, prohibits a parish or municipality from establishing a minimum number of sick days (paid or unpaid) that an employer is required to give. The current law prohibits parishes and municipalities from raising the minimum wage. While proponents of this bill claim that it is needed for businesses to “remain competitive” and “attract and retain the highest poss ible caliber of employees”, in truth it hurts working families and the state’s economy along with stripping many localities right to self -governance. Around the country, local governments are considering local policies to create a “living wage standard ,” paid sick day standards as well as other local policies to promote the economic development and vitality of their communities.
Legislation has been introduced in more than 20 states and localities would complement businesses’ existing family friendly practices while establishing a minimum paid sick days standard for all employers. This standard would level the playing field by making paid sick days a universal practice, while also ensuring enough flexibility for employers to continue offering more generous benefits. Businesses already providing basic paid sick days protections would not need to change their practices. The result: healthier workplaces, reduced turnover, more satisfied and productive workers and better bottom lines.
State Policy Solutions Support for Child Care The Child Care Assistance Program (CCAP) helps low-income families pay for child care while working or attending school or training. CCAP allows parents to select any Quality Rated child care center, school-based before and after school program, licensed child care center, registered Family Child Day Care Home, or InHome provider active in the CCAP provider directory. This program is operated by the Department of Children and Family Services (DCFS). Louisiana should also enact policies that encourage large employers to offer child care services.
Pay Transparency and Pay Secrecy The IWPR/Rockefeller Survey of Economic Security reveals that pay secrecy is quite commonplace. Among all workers surveyed, 51 percent of women and 47 percent of men reported that in their workplaces discussion of pay information is discouraged by managers, or prohibited and/or punishable. Also, a higher rate of single mothers, 63 percent, reported experiencing pay secrecy in their workplaces. xiv Pay secrecy is less prevalent in the public sector; most government workplaces have grade and step systems which make wage and salary information publically available. Indeed, the survey found that 18 percent of women and 11 percent of men in the public sector experience pay secrecy, while 62 percent of women and 60 percent of men in the private sector experience it. Because the gender wage gap is larger in the private sector, it is possible that the greater pay secrecy in the private sector contributes to lesser gender equity there relative to the public sector.xv
“Pay secrecy” is when employers discourage employees from discussing their salaries with one another. Sometimes employers make the discussion of salaries between employees an offense one can be fired for. Under this system employers can get away with paying women less since women are unaware of what their male coworkers are making. Ending pay secrecy will empower women with the ability to hold their employers accountable.xvi
Economic Development and Training Initiatives A study from the Institute of Women’s Policy Research found that high skilled female dominated occupations only made 66.9% of the wages in male dominated high skilled, 79.8% medium skilled, and 73.8% of low skilled.xvii The way to fix the pay gap between men and women is to encourage women to enter nontraditional work fields such as engineering, medical doctors, and finance.xviii Businesses can accomplish this by exposing women at a young age through education that they can work in these fields that have been traditi onally dominated by men.xix Businesses can also offer scholarships that target women to pursue such careers.
Create new Career Pipelines for Women – Trades, Science, Technology, Engineering and Mathematics (STEM) The Louisiana STEM Research Scholars Program which could develop elementary, middle, and high school initiatives that encourage young girls to enter mathematic and scientific fields .xx LaSTEM could also expand scholarships awarded to young women who enter such fields. Currently, women need the advantage provided by higher education both to get a job and to advance in one’s occupational field. Additional efforts need to be made at both the secondary and postsecondary levels to support the skills, interests, and career goals of women and girls and to encourage them to explore a wider range of occupations consistent with those interests, particularly in non-traditional fields of employment. Louisiana can foster workforce and training partnerships with job training programs and higher education to reduce Louisiana’s occupational segregation and to help women enter high-paying jobs. In jobs such as police, firefighter, plumber, electrician provide on-the-job training or apprenticeship programs, the recruit is paid while being trained. So-called Pink-collar jobs such as secretary, nurse, kindergarten teacher require the applicant to be trained prior to employment and thus to personally carry the costs of training without a means of doing so. Non-traditional jobs are those occupations in which women comprise 25 percent or less of the total workers. They include: Skilled trade occupations, such as carpenter, electrician, millwright, plumber and sheetmetal worker; Technical jobs such as drafter, rigger, computer technician, and airline mechanic; Service jobs such as taxi driver, furniture mover, chef and head cook; Public service jobs such as firefighter, police officer and ambulance driver; Professions such as chemist, aerospace engineer, city manager, clergy. By and large, these top growth jobs are in the same occupational fields the US Department of Labor lists as the ten fastest growing occupations in the next ten years (primarily those relating to computers, personal/home care aides and medical assistants).
How to Fix the Gender Gap? Solutions for Business and Industry Local businesses themselves can help solve the gender pay gap and help working families of the state of Louisiana. Businesses can do this by offering employees paid sick leave, providing access to childcare services, establishing base salaries, ending pay secrecy, offering employees flexible work schedules, and reaching out to the community through economic development initiatives.
Establishing Base Salaries Many times men and women start out at different salaries when first hired. By establishing a base salary in which men and women get paid the same for doing the same work, employers will help to alleviate the gender pay gap and provide for better economic security for the state as a whole.
Offering Flexible Work Schedules-Helps Families Parents miss work to take on many family care taking activities. This often leads to parents’ wages being significantly diminished. By employers offering flexible work schedules many parents can choose when and where to work which will help to alleviate the pay gap. Flexible work schedules are not only in the interest of women, but also many employers since the results are reduced turnover which means lower costs of recruitment and training of replacement employees. Another benefit of flexible work schedules is healthier employees.xxi
Why should businesses address the wage and benefit gaps? The Business Benefits are Significant Many leading business owners and managers have implemented effective family friendly policies that give workers paid, job-protected time off to address basic health needs. These leaders understand the business benefits of allowing employees to take time away from work to cope with personal and family illnesses.
Cost Savings from Greater Workforce Stability Replacing workers can cost anywhere from 25 to 200 percent of annual compensation. Paid sick days result in reduced turnover, which leads to reduced costs incurred from advertising, interviewing and training new hires. This is particularly important in lower-wage industries where turnover is highest. Employers also reap the benefits of greater worker loyalty by providing health insurance.
Increased Productivity Employees with access to health care and paid time off are more productive, don’t come to work sick and endanger business profits by putting the health and productivity of other workers — as well as customers and the public — at risk. The risks and costs of contagion are highest in workplaces where employees regularly deal with the public, and these are frequently the very workplaces without paid sick days for all workers. In the restaurant industry, for example, about three-quarters of workers lack access to paid sick days — and nearly two-thirds of servers and cooks report that they have served or cooked while ill. This puts workers, customers and the business itself in danger.
Lower Health Care Costs Lack of paid sick days drives up health care costs for businesses and the public. Workers without paid sick days are more than twice as likely as those with paid sick days to seek emergency room care because they can’t take time off during normal work hours. Parents without paid sick days are five times more likely to seek emergency room care for their children.
The Time to Act Is Now As our economy continues to recover from the Great Recession, we need to do everything possible to sustain and support the recovery. Taking steps to close the pay gap is not only the right thing to do for women; it's the right thing to do for Louisiana. Women make up a majority of the population of both Louisiana and the United States and are therefore an integral part of the economy. Further, the fact that women are increasingly becoming the breadwinners or co-breadwinners of many families, tackling the issue of equal pay will benefit all of Louisiana’s families.
National Partnership for Women and Families. “Working Women and Louisiana’s Wage Gap.” June 7, 2012 Ibid iii Ibid iv Separa, Matt. “Infographic: The Gender Pay Gap.” Center for American Progress. 16 Apr. 2012. Web. 7 June. 2012. v BLS. "Characteristics of Minimum Wage Workers: 2002." http://www.bls.gov/cps/minwage2002.htm vi Excerpted from oped in The Hill Congress Blog on June 4, 2012, by Christine Owens is executive director of the National Employment Law Project. vii BLS. "Characteristics of Minimum Wage Workers: 2002." http://www.bls.gov/cps/minwage2002.htm viii Carrington, Wm. and Bruce Fallick. "Do Some Workers Have Minimum Wage Careers?" Month Labor Review, May 2001. Available at: http://www.bls.gov/opub/mlr/2001/05/art2full.pdf. ix Glynn, Sarah Jane. “The Gender Wage Gap Double Whammy.” Center for American Progress. 16 Apr. 2012. Web. 7 June. 2012. x United States Census Bureau. (2010). Employment Characteristics of Families. Retrieved 25 October 2011, from http://factfinder2.census.gov. xi United States Department of Labor, Bureau of Labor Statistics. (2011, March). National Compensation Survey: Employee Benefits in the United States, March 2011 (Tables 33). Retrieved 25 October 2011, from http://www.bls.gov/ncs/ebs/benefits/2011/ebbl0048.pdf. xii Ibid xiii Ibid xiv Hayes, Jeff and Heidi Hartmann. 2011. Women and Men Living on the Edge: Economic Insecurity After the Great Recession. Washington, DC: Institute for Women’s Policy Research. xv Ibid xvi Peterson, Laytoya. “How Do We End The Wage Gap? Demand Transparent Salaries.” Jezebel. 24 Feb. 2010. Web. 8 June 2012. xvii Covert, Bryce. “How to Fix the Gender Wage Gap: Going Far Beyond an App.” Next New Deal: The Blog of the Roosevelt Institute. 2 Feb. 2012. Web. 8 June. 2012. xviii Willinger, Beth. “Closi ng the Gender Wage Gap: How Are Louisiana Women Doing?” Tulane University. N.d. Web. 8 June. 2012 xix Dey, G.D., Goldberg, J. “Behind the Pay Gap.” AAUW Educational Foundation. Apr. 2007. Web. 8 June. 2012 xx “About the LA-STEM Research Scholars Program.” Louisiana State University. N.d. Web. 8 June. 2012 xxi Levin-Epstein, Amy. “The Gender Pay Gap: One Way To Solve The Issue.” CBS Money Watch. 15 Sept. 2012. Web. 8 June 2012 ii