Introduction

Since the founding of the United States, women and people of color have struggled to achieve equity, in particular with white men. This struggle was vividly manifested in the protest movements of the 1960s and 1970s, but has been ongoing throughout history. While meager gains have been made over the past 50 years, women and people of color still fall well behind their white male counterparts.

Median incomes for women and people of color — and especially for women of color — fall well below those for white males. Research shows this is true even within the same occupations, and these lower wages cannot be attributed solely to types of employment. Instead, they are the combined result of history, discrimination, policy and politics.

Beyond lower median incomes, though, women and people of color are disproportionately less likely to earn a living wage for their family. While all workers earn wages across the pay spectrum, women and people of color are disproportionately concentrated in low-wage work.

When working families don’t earn enough to make ends meet, they are forced to cut back on necessities. Families earning below a living wage typically cannot afford to save for emergencies, let alone for retirement, and parents even skip meals to ensure that their children can eat.

Equity in the Balance builds on previous reports in the Job Gap Economic Prosperity Series and contributes to the discussion of pay equity by examining the concentration of women and people of color in low-wage work at the national level and in 10 states and New York City. This study provides an analysis of the disparities in who earns a living wage in each locality, examining race and ethnicity, gender, and citizenship.

Personal stories in this report from women of color struggling to provide for themselves and their families on sub-living wages illustrate the impossible choices families face when working full-time does not provide enough to make ends meet and when living wage jobs are not available. The lack of living wage jobs hurts our economy, and it continues to hurt communities that have struggled for so long to achieve pay equity.

National Findings:

Who Earns a Living Wage?

For the purpose of this study’s national analysis, a wage of $15 per hour in 2013 is set as a proxy for a national living wage (for more information on this definition, see Technical Notes). A living wage is a wage that allows a worker to provide for the basic needs of herself and her family, without public assistance, with money left over for savings and some miscellaneous personal expenses.

Nationwide, just over 60 percent of all full-time workers age 16 and older earn $15 per hour or more, leaving more than 43.5 million workers at risk of being unable to make ends meet. In the geographies examined in this report, $15 is enough for a single adult in only two states, and falls well below the living wage for any family larger than a single adult. So, for single adults with children or for two-parent households, even $15 may fall well below the amount families need to get by.

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Women and People of Color Disproportionately Less Likely to Earn a Living Wage

For workers of color, the situation is even more dire. In 2013, 52 percent of workers of color nationwide earned $15 per hour or more, leaving one in two workers of color earning less than a single adult needs to make ends meet. And, only 51 percent of Black workers and 50 percent of Native American workers earned at or above that living wage threshold. Additionally, only
42 percent of Latino workers earned $15 per hour or more, compared to nearly two-thirds of non-Latino workers. When workers of color are concentrated in low-wage work, it can affect not only individual workers and their families, but also entire communities.

Women are also less likely than men to earn a living wage. Of the more than 45 million women over age 16 nationwide, only 57 percent had an annual income that was greater than or equal to $15 per hour, compared to almost two-thirds of male workers. However, because women are more likely to be single parents,1 even $15 per hour may still fall well short of many mothers’ ability to provide for their families’ needs.

Additionally, we observe significant wage inequities based on citizenship, as only 38 percent of non-citizen workers earned $15 per hour or more, compared to
63 percent of citizens. (While the Census Bureau attempts to include undocumented immigrants in its count of non-citizens, the true percentage of non-citizen workers earning less than $15 per hour may be even greater, as undocumented immigrants are “less likely to respond to surveys, less likely to speak English, more likely to have informal or temporary living arrangements … [and] many fear census takers will report them to the government”2 and are more likely to work in low-pay, low-skilled work.3)

The analysis of who earns a living wage at the state level (and nationally at the $15 threshold) relies on two primary sources of data: the Census Bureau’s American Community Survey 2013 one-year PUMS estimates (released October 2014) and the living wage figures calculated in Families Out of Balance as part of the 2014 Job Gap Economic Prosperity Series (released August 2014).

Our findings represent the percentage of full-time workers who are age 16 and older who reported earnings in 2013 at or above calculated living wage levels at five household types: single adult; single adult with a school age child (age 6-8 years); single adult with a toddler (12-24 months) and a school age child (6-8 years); two adults (one of whom is working) with a toddler and a school age child; and two adults (both of whom are working) with a toddler and a school age child. The living wage levels are calculated individually for each of the 10 states included in the report, and New York City.

Nationally, we use $15 an hour as a conservative representation of a living wage. It is noteworthy that our state living wage findings show that a $15 threshold falls well below household types with children and all but two states’ living wage threshold for a single adult.

For more, see Technical Notes.

Discussion and Analysis

The concentration of women and people of color, and especially women of color, in low-wage work is deeply rooted in historical, cultural and political factors. Discrimination has been a mainstay in the United States for generations. As momentum builds across the country to increase wages, the disparate impact of low wages on women and people of color cannot be overlooked.

Gender Disparities in Earnings Over Time

The gender pay gap of today that leaves women without full access to the pay and benefits received by their male counterparts goes back to the country’s founding — when only white male property owners were allowed the right to vote in most states.4 In fact, under the laws of coverture, married women were considered dependents of their husbands, and so could not own property or even control their own earnings.5 These early laws paved the way for gender disparities still evident in the workforce today.

By the 19th century, equity laws were enacted in many states to allow married women the right to own property in their own name,6 giving women more autonomy. Passage of these laws encouraged more married women to work outside of the home. As the 19th century continued, women were employed in large numbers at textile mills and garment shops,7 as well as in domestic service.8 As more women left the home to work, the gender pay gap emerged, as “factory owners sought women employees because they could pay them much less than men.”9

While the labor movements of the late 19th and early 20th centuries helped workers see income gains and greater benefits, occupations dominated by women were largely left out of the movement. “Although the factory system was springing up … industrial workers played little part in the early trade union development.”10 Additionally, the original Fair Labor Standards Act did not include domestic workers.11

By the 20th century, almost half of single women had jobs, but only 6 percent of married women did, with many single women leaving their jobs once they were married.12 Beginning in the 1920s, married women’s participation in the labor force began to steadily increase, as did single women’s — though single women’s participation dipped after World War II when many single women left the jobs they had worked during the war to pursue higher education, and began to steadily rise again in the early 1970s.13

Despite this increase in participation, though, women in the labor force continued to be paid less than their male counterparts. From the 1930s to the 1980s,14 the pay gap between women’s and men’s median earnings held steady at about 40 percent, despite the passage of laws during the 1960s — including the Equal Pay Act of 1963 and the Civil Rights Act of 1964 — which should have ensured equal pay and protection from discrimination.15 Since the 1980s, the gender pay gap has slowly decreased, but for single women householders the pay gap remains at about
30 percent.

Single Female Householder Median Income as Percentage of Single Male Householder Median Income by Year, with No Spouse Present16

Year

Percentage

2013

69%

2010

64%

2005

66%

2000

67%

1995

64%

1990

57%

1985

59%

1980

58%

The gender pay gap holds true regardless of race or ethnicity, with single women householders of all races earning less than single men householders of those races and single Latina householders earnings less than single Latino householders, with the exception of Asian American women in 2013.

Single Female Householder Median Income as
Percentage of Single Male Householder Median
Income by Year, by Race and Ethnicity, with No Spouse Present17

Year

White

Black

Asian

Hispanici

2013

72%

69%

107%

62%

2010

69%

66%

73%

60%

2005

70%

62%

74%

59%

2000

72%

56%

76%

64%

1995

70%

58%

72%

59%

1990

63%

52%

59%

50%

1985

64%

57%

N/A

40%

1980

62%

56%

N/A

52%

This gender pay gap persists regardless of whether women are in occupations that predominately employ women or those that are dominated by men. As the Institute for Women’s Policy Research found, there are only three occupations in which women’s median weekly earnings are greater than men’s.18 Additionally, women are concentrated in occupations that see low median earnings, such as retail salespersons, cashiers, waiters and waitresses, maids and house-cleaners, and child care workers.19 In the meantime, women have surpassed men in attainment of higher education degrees, with women accounting for nearly 60 percent of university graduates, 60 percent of master’s degree graduates, and 52 percent of doctorate graduates.20

Current policies, like allowing a tipped minimum wage that is lower than that for non-tipped workers, also contributes to the low earnings of women, allowing tipped workers to be paid less under the assumption that they will make up the difference in tips. Two-thirds of tipped workers are women, including 70 percent of servers.21

The concentration of women in low-wage work also means that they are more likely to live in poverty than men. In 2013, the poverty rate for men was 11 percent; for women, the poverty rate was
14.5 percent.22 Additionally, poverty rates for women of all racial and ethnic groups were higher than for white non-Hispanic men, and were higher than for their male counterparts within their racial or ethnic group.23 The poverty rate for single female-led households was nearly 40 percent, while the rate for single male-led households was 19.7 percent.24 These higher poverty rates leave women more likely to have to cut back on essentials just to scrape by.

Racial Disparities in Earnings Over Time

As with the gender pay gap, the income gap between white workers and workers of color is also rooted in a history of discriminatory policies that leave workers of color disproportionately in low-wage work. Just as women were excluded from voting when the country was founded, people of color were also excluded from the political process in most states, even if they were free.25 For those who were enslaved, not only was participation in the political process denied, but so too, the right to be seen as more than property. That lack of opportunity to earn wages or buy property has led to generational disparities in wealth that continue to undercut the ability of people of color to get ahead today.26

By 1776, African Americans made up 20 percent of the population of the original 13 colonies,27 though the percent colonies’ total population that was enslaved varied greatly. While slavery was especially endemic in the South, even northern urban centers like Boston had significant slave populations.28 As labor-intensive crops grew in importance in the South, the free labor provided by slavery became increasingly important to the economy. Even after the Civil War, though, many African Americans continued to earn low wages.29

As the country expanded into the South, where slavery would become further entrenched, and later to the West, Native Americans were forced from their homelands, leaving their self-sufficient communities behind. “In 1823 the Supreme Court handed down a decision which stated that [Native Americans] could occupy lands within the United States, but could not hold title to those lands.”30 That decision paved the way for full-scale removal of Native people from their land and of their right to own that property. Through persuasion, bribery, threatening, and even war, Native Americans were forced from their homes to smaller and smaller portions of land, often through the guise of treaties31 This forced removal left Native communities without access to the resources they once relied upon to be self-sufficient. Native communities were thrown into a cycle of poverty that continues today.32

In addition to African and Native Americans, non-white immigrants were also systematically restricted from prospering in their new home. The 1790 Naturalization Act stated that only those immigrants who were free and white could become citizens.33 While this was challenged successfully for African Americans after the Civil War, court cases in the early 1900s to change this law on behalf of other immigrant groups — especially Chinese, Japanese, and Indian immigrants — were denied.34 Restriction on immigration was tied to labor interests, especially as the labor union movement grew. While employers wanted to recruit foreign workers who would work for low wages, labor unions pushed for restrictions so that immigration did not undermine their efforts for better wages.35

Even as policies eventually allowed non-whites to gain citizenship and freedom, and to own land and other property, policies did not always result in greatly better circumstances. The 14th Amendment made anyone born in the United States a citizen, but Jim Crow laws continued to keep African Americans and other people of color from fully integrating with whites.36 That amendment also guaranteed equal protection under the law, but equal protection was not always equal.

Additionally, as was true for women, the rise of labor unions did not ensure that the jobs held by people of color would see higher wages or greater benefits. In 1895, the American Federation of Labor (AFL) chartered a whites-only machinist union; after that, there became a clear race element to the labor movement,37 which was further solidified when agricultural workers were excluded from the 1938 Fair Labor Standards Act.38

The Civil Rights Act of 1964 sought to end discrimination based on race (and gender), including in the workplace. Despite the passage of this act and subsequent refinements in the years since, people of color continue to struggle to achieve pay equity with their white peers.

Household Median Income as a Percentage
of Median Income for All Households39

Year

White

Black

Asian

Hispanic

2013

106%

67%

129%

79%

2010

105%

65%

130%

76%

2005

105%

67%

132%

78%

2000

105%

71%

133%

79%

1995

105%

66%

119%

67%

1990

104%

62%

128%

75%

1985

105%

63%

N/A

74%

1980

106%

61%

N/A

77%

The concentration of people of color in low-wage work means that families of color, and more broadly communities of color, are more likely to live below the poverty line than their white peers. As with the national findings, while Asian households appear to be better off than other races, the aggregation of Asian households under one race hides significant disparities among many communities of Asian descent. Policies like the tipped minimum wage that disproportionately affect women also affect people of color, who are especially concentrated in the restaurant industry’s lowest paid positions.40

The poverty rate for blacks is more than double that of whites, at 27.2 percent and 12.7 percent, respectively.41 The Census Bureau also found that those who identified as Hispanic (any race) were nearly three times more likely to live in poverty than those who identified as white, not Hispanic. Additionally, more than one in four Native Americans live in poverty,42 with rates as high as 69 percent on some reservations.43 People of color, already at risk of experiencing racism in their daily lives, are less likely to be able to make ends meet for themselves and their families.

Compounded Effects of Race and Gender for Women of Color Struggling to Make Ends Meet

Because women and people of color have been subject to policies that restrict their ability to see pay equity with their counterparts (male and white, respectively), women of color are further restricted as these two demographics intersect and the effects compound.

Single Female Householder with No Spouse Present Median Income as Percentage of Median Income for All Workers by Year, by Race and Ethnicity44

Year

White

Black

Asian

Hispanic

2013

72%

54%

115%

56%

2010

71%

52%

95%

55%

2005

74%

49%

95%

55%

2000

75%

51%

91%

57%

1995

72%

46%

90%

43%

1990

70%

42%

83%

42%

1985

70%

41%

N/A

38%

1980

70%

43%

N/A

41%

The low median incomes earned by women of color when compared to white women, men of color, or especially white men, also leave women of color more likely to live in poverty. In 2013, 25.3 percent of black women and 23.1 percent of Latinas lived in poverty, compared to 10.7 percent of white women.45 Asian American women, who have median incomes slightly higher than white women, had a poverty rate of 11 percent — and that rate masks the even higher poverty rates among select groups of Asian women.46 Additionally, 26.8 percent of Native American women lived in poverty.47 While women and people of color overall are more likely to earn low wages and live in poverty, it is especially true for women of color.

WHAT IS A LIVING WAGE?

A living wage is one that allows families to meet their basic needs, without public assistance, and that provides them some ability to deal with emergencies and plan ahead. It is not a poverty wage.

Living wages are calculated on the basis of family budgets for several household types. Family budgets include basic necessities, such as food, housing, utilities, transportation, health care, childcare, clothing and other personal items, savings, and state and federal taxes. As calculated previously in the 2014 Job Gap Economic Prosperity Series, living wages for a single adult range from $14.40 per hour ($29,957 annually) in Montana to $19.08 ($39,682 annually) in Connecticut, and $22.49 per hour ($46,771 annually) in New York City. This assumes full-time work on a year-round basis. For a single adult with two children, living wages range from $25.12 per hour ($52,239 annually) in Idaho to $40.48 per hour ($84,208 annually) in Connecticut, and $40.66 per hour ($84,563 annually) in New York City.

State-by-state living wage estimates, are as follows. All data assumes full-time work on a year-round basis:

For a single adult, the living wage ranges from $14.40 per hour ($29,957 annually) in Montana to $19.08 ($39,682 annually) in Connecticut, and $22.49 per hour ($46,771 annually) in New York City.

For a single adult with one child, the living wage ranges from $19.85 per hour ($41,293 annually) in Montana to $28.81 per hour ($59,916 annually) in Connecticut, and $31.23 per hour ($64,962 annually) in New York City.

For a single adult with two children, the living wage ranges from $25.12 per hour ($52,239 annually) in Idaho to $40.48 per hour ($84,208 annually) in Connecticut, and $40.66 per hour ($84,563 annually) in New York City.

For two adults, one of whom is working, with two children, the living wage ranges from $28.44 per hour ($59,163 annually) in Montana to $35.18 per hour ($73,182 annually) in Connecticut, and $37.49 per hour ($77,976 annually) in New York City.

For two working adults with two children, the living wage per adult ranges from $17.69 per hour ($36,799 annually) in Idaho to $24.92 per hour ($51,839 annually) in Connecticut, and $25.14 per hour ($52,288 annually) in New York City.

What Happens to Families Who Do Not Make a Living Wage?

When families are unable to find work that pays living wages, many are forced to make difficult choices between adequate health care, balanced nutrition, paying bills, and saving for emergencies. The personal stories in this report illustrate some of the complex issues and choices confronted by households living on less than a living wage.

In the pages that follow, this report provides state-by-state findings that show who earns a living wage in each state and, consequently, who is unable to make ends meet. Additionally, stories highlight the real tradeoffs that working families make when wages don’t cover the cost of living.

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National Equity Report

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