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Pay gap and other workplace hurdles hamper women

Monday, December 27, 2010  
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Lower pay, lack of representation in top corporate jobs, expensive childcare and inflexible work arrangements are hampering women's contribution to the economy, according to a report released in mid-December 2010 by the U.S. Congress Joint Economic Committee.

"Invest in Women, Invest in America: A Comprehensive Review of Women in the U.S. Economy” found full-time, year-round working women earn 77 cents for every dollar earned by men, about the same gap found nearly 10 years ago. Over the course of a career, the pay gap has an enormous cumulative impact -- an average $430,000 by the time she retires.

"Women have made extraordinary progress in the last several decades – in pay, education and overall economic health,” said JEC Chairwoman Carolyn Maloney (D-New York). "But we still have a ways to go to eliminate the pay gap and to achieve true economic equality. To really rev up the U.S. engine of economic growth, we need to finally and fully unlock the economic potential of women.”

A recent GAO report, which looked at the pay gap among women and men employed in management positions, found full-time female managers earn 81 cents for every dollar earned by their male manager peers. Indeed, despite women making up nearly half of employees at Fortune 500 companies, women make up just 15.7 percent of board seats, 14.4 percent of executive officers, 7.6 percent of top earning executive officers and 2.4 percent of chief executives, the JEC reported.

This disparity in career advancement exists even though companies with the most women on their boards of directors outperform those with the fewest women on their boards on several key performance measures. Return on invested capital is 65 percent higher in firms with strong female representation, Return on equity is 53 percent higher and return on sales is 42 percent higher. The 25 Fortune 500 firms with the best records of promoting women to senior positions record returns on assets 18 percent higher and returns on investments 69 percent higher than the Fortune 500 median for their industry, according to the JEC report.

While the inequalities in pay and position remain, a women's paycheck has grown as the share of all household income. In the typical married household where both spouses work, the wife’s paycheck accounts for more than one-third (36 percent) of the family’s income, an increase from 26.6 percent in 1970, the report found. Among all working wives in 2008, 38.1 percent earned as much or more as their husbands, compared to 18.7 percent in 1967.

The pressure on work/life balance continues, with more women with children working and the cost of annual full-time, center-based childcare for an infant reaching $18,310 in 2009. In 2008, 64.3 percent of mothers with a child under age six worked outside the home, an increase from 39.6 percent in 1975. But only half of American workers agreed they have the flexibility they need to successfully manage their work and family life.

 One problem: The early care and education system in the United States remains "underdeveloped and under-funded, and access to quality, affordable care for young children represents a major source of financial and emotional stress for working parents,” the report concluded.

The JEC suggested several policy options for consideration in the next Congress, including a fair pay bill and a measure that would provide employees with the right to ask for a more flexible work schedule.

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