Jul 14, 2023
Lowest Paid Workers In U.S. Are Mostly Women. Paying Them More Helps GDP
Paying people a living wage may also boost the economy. There are 21 million people working in the most underpaid, undervalued jobs in our country — and nearly two-thirds of these workers are women,
Paying people a living wage may also boost the economy.
There are 21 million people working in the most underpaid, undervalued jobs in our country — and nearly two-thirds of these workers are women, according to a new report from the National Women’s Law Center.
The lowest-paying jobs, which pay $15 or less an hour, include fast food workers, restaurant servers and bartenders, child care workers, preschool teachers, hotel clerks, personal care and home health aides, grocery store cashiers, among others. (Currently, minimum wage in 20 states remains at $7.25 per hour.)
Labor Day became a national holiday in 1894 to celebrate the contributions of American workers after labor activists pushed for greater workers’ rights, such as an eight-hour workday and the elimination of child labor. As we honor the workers who keep the country running, it’s important to note that in 2023 working a full-time job still does not guarantee making a living wage and being free from poverty — especially for mothers and women of color.
Moreover, roughly 38% of women in the lowest-paid jobs live in or near poverty, which is defined in the report as having a household income that’s below twice the federal poverty line.
The report finds that women of color’s share of the low-paid workforce is up to two times larger than their share of the overall workforce. Combine that with the motherhood penalty, and the systemic barriers that make it harder for women with children to support themselves and their families, and having a job doesn’t necessarily mean you’re able to make ends meet.
Christine Matthews, thirty-seven, is a single mother of two daughters ages five and twelve, and a newborn son who lives in Charleston, South Carolina, and has been working in low-paying jobs most of her life.
Matthews tried to change that in 2013 when she received a Registered Medical Assistant license, which would enable her to be hired by doctors, medical clinics, and hospitals to care for patients by taking their weight, temperature, blood pressure, etc. before patients met with their doctors. Matthews was offered a RMA job immediately after getting her license that paid $25 an hour, but was forced to turn it down because she couldn’t find affordable child care in her area.
She had to move into her parents’ house and worked part-time as a cashier at Harris Teeter for five years. “I’d tell them the hours I could work when I had child care covered from 9 a.m. to 2 p.m. and they’d give me that schedule because I’m a good worker,” Matthews said.
After taxes, she made only $120 per week, and could never seem to get ahead. “You can’t live on $8.25 an hour,” Matthews said. “Try stretching that, and you’ll see it only goes so far. It’s impossible to pay for childcare on those wages.”
When the pandemic shuttered daycares and schools, we saw up to 40% of working parents quitting or reducing their hours. This is because having affordable and reliable childcare is essential for being able to work.
"You can work hard, get an education, and apply for a job, when you then realize you can't actually work 40 or 50 hours a week in a higher-paying job because you can't secure that many hours of child care to be able to go to work, which then often pushes people into part-time jobs," Julie Vogtman, co-author of the report and director of job quality and senior counsel at the National Women’s Law Center, said.
Another issue is jobs paying close to minimum wage often lack benefits, such as paid sick days and family leave, and are likely to have unpredictable schedules, such as shifts that change weekly.
Vogtman says that there are policy tools that can make the most low-paying jobs — many of which are essential to our economy — jobs that people can actually survive on. “President Biden proposed many of them in his Build Back Better plan, and some were put in place temporarily during the pandemic—things such as paid sick days, paid caregiving leave, rental assistance, an expanded child tax credit and earned income tax credit, and substantial increases in federal funding for child care,” Vogtman said. “But most of these measures have expired or—like the child care funding—will soon. If we want to permanently change our economy, we need to permanently change our policies.”
Putting policies in place that pay workers a living wage or offer workers paid time off to care for themselves and their families isn’t a hand out. “Research shows that these practices not only benefit workers, but can improve the bottom line for employers as well by improving employee productivity and morale and reducing turnover costs,” Vogtman said.
Paying people a living wage may also boost the economy: The Economic Policy Institute estimated that raising the federal minimum wage to $15 by 2025 could save taxpayers between $13.4 billion and $31.0 billion annually on major public assistance expenditures, all while increasing tax revenues since people are making more money.
Today, Matthews is making $16 an hour as an administrative assistant at a construction company, but the hours are unpredictable and some weeks she doesn’t get any hours at all. Childcare and schedule constraints continue to be hurdles for her when it comes to working a traditional job, because school and summer programs typically don’t match the typical nine-to-five job schedules.
“That's where I fall in the gaps—I cannot work full time, because programs often end at three o'clock,” says Matthews. “Also, my five-year-old has autism and a lot of programs will not accept her because she has special needs. While I qualify for a registered medical assistant position and I also have done HR work, I can't do that because those jobs are from eight to five. Even if an after-school program ends at five, I couldn’t get to pick up by five if I have to work until that time. I don’t have help; my parents are older and my mom doesn’t drive any more.”
Matthews’ personal struggles reflect larger public issues of how workplaces are not set up for caregivers. "Until we change our policies on a permanent basis to ensure higher wages and other labor standards, like paid sick days, paid family and medical leave, and fair work schedules, we can't expect to change the living standards of so many people in our country who are really doing their best to try to provide for their families," says Vogtman.
Matthews also thinks corporations can play a bigger role in making workplaces work better for parents, such as by accommodating the need for flexible schedules and offering child care stipends.
“I have a lot to offer a company, and there's a lot of people that have a lot to offer who are willing and able to learn new things, but we can't get in the door because of childcare,” says Matthews. “Companies could be growing a whole lot more if they offered better options for us as parents, because by not doing so, they are missing out on great, loyal employees.”