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Women’s participation in the California workforce has become critical to families’ financial security and the state’s economic well-being. As part of our work on the California Women’s Well-Being Index, the Budget Center recently released a set of issue briefs focusing on women’s employment, earnings, and economic security, highlighting how gender- and race-based discrimination continues to hold women back. Labor Day presents an opportunity to highlight the data and analysis from these new briefs and also to discuss policy solutions that could boost the financial security of women and their families in California.

Mothers Have Become Breadwinners in California

The share of working women with children has nearly doubled in the past 50 years, and the most recent data show that 2 out of 3 women with children under the age of 18 are in the labor force. Because so many mothers are working for pay, over half (55%) made a significant contribution to their families’ finances in California in 2016 — more than double the share in 1967 (see chart below). Yet, despite the dramatic increase in mothers’ labor force participation, state and federal policies do not go far enough to support parents struggling to balance work and family obligations. This holds women, their families, and the economy back. The right policy choices are particularly important for parents with low incomes who often have limited benefits and are subject to unpredictable and nonstandard work schedules, making it difficult to both hold a job and care for their families.

Women Are More Likely Than Men to Earn Low Wages

Women are more likely overall than men to earn low wages, but a much larger share of Latinx women earned low wages compared to women in other racial and ethnic groups. In California in 2016, 55% of Latinx women earned low wages — defined as less than $14.71 per hour (see chart below). The share of Latinx women who earned low wages is more than double that of white women (26%). In addition, more than 1 in 3 Native American and African-American women earned low wages in 2016. Women earning low wages often struggle to pay rent or buy food. This lack of financial security is stressful and affects women’s mental and physical health as well as the health and well-being of their children.

Women Are Overrepresented in Low-Wage Occupations

More than half (53%) of workers in the 10 lowest-paid occupations are women, while only 30% of workers in the 10 highest-paid professions are women (see chart below). Women aren’t clustering in low-wage jobs simply due to personal preferences. Research shows that “women’s work” is often valued less than comparable work done by men, regardless of skill level. In fact, as the share of women working in a given occupation increases, the pay in that occupation decreases. Alternatively, women may make career choices — even taking a pay cut or turning down a promotion — to minimize harassment or maximize their ability to juggle work and family obligations.

Women Are Still Paid Less Than Men

For the reasons mentioned above, and more, women working full-time, year-round in California earned just a fraction of what white men earned in 2016. These disparities vary by race and ethnicity, but the wage gap is significantly larger for Latinx women, who earned just 42 cents for every dollar earned by white men (see chart below). Native American, Pacific Islander, and African-American women all earned less than 60 cents for every dollar earned by white men. Even the highest-earning racial groups — white and Asian women — earned just 78 and 75 cents, respectively, compared to white men.

If women had earned the same amount as comparable men in 2016, the state would have seen a decrease in poverty rates and an increase in economic activity. According to the Institute for Women and Policy Research, eliminating the wage gap in California would have resulted in an estimated average increase of roughly $6,400 in earnings per working woman. This would have cut working women’s poverty rate from 7.6% to 3.6%. Because 2 out of 3 mothers with children under the age of 18 were working in California in 2016, equal pay for working moms would have also benefited children across the state, cutting their poverty rate nearly in half (from 11.6% to 6.2%). Finally, eliminating the wage gap would have added $55.5 billion to the state’s economy, equal to 2.1% of California’s Gross Domestic Product in 2016.

Policy Solutions to Boost Women’s Economic Security

Women’s work is critical to their families’ financial security, and it is a boon to the economy. Yet, women continue to face persistent disparities that continue to hold them back — particularly women of color who face both gender- and race-based discrimination. State and local policymakers should craft policies that boost women’s economic security, particularly for working mothers. This includes increasing funding for the state’s subsidized child care and development system, continuing to strengthen the California Earned Income Tax Credit (CalEITC), adopting policies that combat unfair scheduling practices, and expanding California’s paid family leave program. (The Budget Center’s full suite of policy recommendations can be downloaded here.)

It is crucial that state and local policymakers work to address women’s economic security. This could improve health and well-being, with positive outcomes for women, their children, and the communities they live in. When women thrive, their families and communities prosper.

— Kristin Schumacher

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