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Is The Wage Gap Keeping Our Economy From Bouncing Back?

When discussing the wage inequity in America, most people bring up the emotional argument that it’s not fair. It is not fair that women earn less than their male counterparts within all racial and ethnic groups. Women who work full-time earn 78% of what men make, and there is no justice in that. But lately, a new argument is emerging. The wage gap is playing a large role in our economy now. So, whether or not you personally care that the wage gap exists, it is affecting you.

Fixing the Economy

 

Economists argue that the widening wealth gap is creating disparities which are affecting America’s ability to recover from the Great Recession. Until last year, the median American income had spent the past decade declining. Now it’s not declining, but it’s not increasing either. The median American income has stagnated, which is progress but not a victory. What could help get income increasing once more is greater pay equality.

Like the median income, the pay gap has also stalled. The gap was shrinking over the past couple of decades; it narrowed from 36 cents in 1980 to today’s reported 22 cents – but somewhere around the turn of the century, women’s wages were put on pause and have struggled to make progress since. The Paycheck Fairness Act, which prohibits gender-based pay discrepancies, failed to pass in 2010, 2012, and this past year. This doesn’t just affect one group of women, but every working woman no matter her race, education, or job.

How Those Lost Wages Can Help

 

When women are paid less than men it affects an entire household. By enacting equal pay, families will have more money to put back into the economy – especially single mother households and households with working women of color, both of whom earn even less than their married/white counterparts. The difference between men and women’s earnings is given at 22%, which accumulates over time until the average woman loses $320,000 over a 40-year working career. This is why last year, when the gender pay-gap shrank a tad, it was enough to stop the median income from declining again.

Closing the gender pay wage gap won’t just help stimulate the economy, it will help put more money into Social Security so that the program doesn’t go into shortfall. The Institute for Women’s Policy Research conducted a study that showed closing the wage gap would have generated $447.6 billion in extra income in 2012. That’s almost $450 billion dollars that would have been bound by social security taxes. That money would go far to help the baby boomers who are now using the social security program rather than funding it, and can help women save for their own retirement. Since the average woman now lives to be about 84, her economic security is vital.

Moving Forward

 

The wage gap should be easy to fix, because there’s no real reason that it exists in the first place. Even when a male and female employee share the same background the wage gap exists, proving that the gap is born from discrimination plain and simple. The President recently passed the Lilly Ledbetter Fair Pay Act into law, to help female and minority workers challenge discriminatory pay. By also passing the Paycheck Fairness Act, America can choose to re-stimulate its economy into stability.

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