According to a Wells Fargo report, women’s wages remain nearly 18 cents below every dollar earned by their male counterparts. If the Fed halts wage increases, it could widen the gap.
Despite the Federal Reserve’s (Fed) moves to cool the U.S. economy by raising interest rates the most in such a short period of time, government data indicate that unemployment remains at a five-decade low. However, the central bank has stated that it will not relent in its intentions to reduce inflation, so the wage increases that marked 2022 have been halted this year. The bad news is that women will (again) be hit the hardest by this situation.
During much of 2021 and the first half of 2022, many companies developed different incentives, including raising their wages, to attract labor force in the face of worker shortages in various industries. Several U.S. state governments raised the minimum wage in their jurisdiction. Increases are even expected this 2023.
Unfortunately, not all workers have benefited equally from the wage increases. And yes, we’re talking about the gap widening in relation to women and minorities.
A new report from Wells Fargo showed that wages for single women in the workforce have not caught up to those of their male peers, despite growing three times faster than the workforce as a whole over the past decade.
Last year, unmarried women earned 92% of what never-married men earned, according to the banking group’s report. Women also reported having 29% less wealth, overall.
This concludes that the overall wage gap between men and women has stagnated over the past 20 years.
A Pew Research Center analysis of median hourly earnings for full-time and part-time workers found that U.S. women earned on average about 82 cents for every dollar earned by a man during 2022.
According to reports, this represents an improvement of only 3 cents since 2002. The differences are seen across age groups, employment levels and industries.
While it is a blow to individual pocketbooks, especially for female heads of households, it is no lighter for the economy as a whole. On average, employed women in the United States lose $1.6 billion each year due to the wage gap, according to the National Partnership for Women and Families. That wage loss means women have less money to support themselves and retire, as well as to spend in their communities.
According to Department of Labor metrics, wage growth peaked in the middle of last year and has since slowed. A comprehensive measure of employee pay showed that employer spending on wages and benefits grew by just 1% in the last three months of 2022. Analysts suggest that the slowdown is due to the Fed’s actions.
If that wasn’t enough, in his recent appearance before the Senate, Fed Chairman Jerome Powell anticipated that more aggressive interest rate hikes could be coming at the central bank’s next few meetings.
If so, the wage gap between men and women could be larger this year than it was in 2022, based on the reports presented.