Tags: low wages | women | poor | economy | income inequality | jobs

Low Wages, Not Income Inequality, Keeping Women Poor

By    |   Wednesday, 04 Jun 2014 01:51 PM

Poverty and low wages, not income inequality, are hurting women's fortunes, according to the Economic Policy Institute, and the obvious way to solve that issue is to simply pay people more money.

"If we don't boost wages, then we're not going to get middle-class income growing, and we'll never lift people out of poverty," the institute's president, Lawrence Mishel, told The Washington Post.

In a paper to announce the EPI's "Raising America's Pay" initiative launched Wednesday, raising wages is "the central economic challenge of our time — essential to addressing income inequality, boosting living standards for the broad middle class, reducing poverty, and sustaining economic growth."

According to the EPI, normally people get paid more when they produce more. But that link ended about 30 years ago. While worker productivity is up by 65 percent since 1979, the paper says, hourly compensation has only gone up by 8 percent for production and nonsupervisory workers.

However, if the minimum wage rises, jobs could be lost, according to the Congressional Budget Office.

President Barack Obama's plan to raise the federal minimum wage to $10.10 an hour would cost as many as 1 million jobs by late 2016, the CBO said earlier this year. If Obama and his fellow Democrats are successful in pushing the measure through, the increase would be fully implemented by the end of 2016. It would raise the rate for 16.5 million Americans.

The current minimum wage is $7.25 an hour.

But, EPI says, people's wages haven't been rising for years. People at or below the 30th percentile of income earners has been flat for years, while wages for the poorest 10 percent have dropped. And at all levels, women earn less money than men.

Many women who live in poverty also work. According to the policy group Demos, of the 7.2 million women working in retail, 1.3 million live at or near the poverty line.

Poverty can be harmful for women, reports the Brookings Institution. A woman at the bottom of the income distribution level at age 55 can expect to live a decade less — 80 years instead of 90 — than a wealthier woman.

To top things off, the EPI report states that income-adjusted federal minimum wages are 25 percent lower than their peak level, and because women account for about two-thirds of all minimum-wage workers, a higher wage policy would benefit them.

Raising education levels would also lift women out of poverty. Estimates show a woman with a college degree earns about $23,000 more a year than one who graduated only from high school.

The EPI report says low wages persist because some employers improperly classify workers as independent contractors.

Employers save money with independent contractors because they don't have to pay  unemployment insurance or workers' compensation. Such workers aren't covered by minimum wage laws, and employers don't need to pay for their health insurance.

Wage theft also lowers paychecks when employers pay less than minimum wage, don't pay overtime, and require unpaid work to be completed, the report says.


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Poverty and low wages, not income inequality, are hurting women's fortunes, according to the Economic Policy Institute, and the obvious way to solve that issue is to simply pay people more money.
low wages, women, poor, economy, income inequality, jobs
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2014-51-04
Wednesday, 04 Jun 2014 01:51 PM
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