Income and Economic Standing of WoC
The lack of equity in income and wealth shapes the way women of color can respond to social and financial crises, sometimes escalating minor financial setbacks into an array of economic hardships which make a recovery difficult. Women of color are, unfortunately, at the center of economic inequality and most in need of paid leave and wage increases.
The COVID-19 pandemic set back workforce gains made among women of color. For instance, from 2008 to 2018, Latinas’ share of the labor force increased 1.8%. They were projected to comprise 9.2% of the labor force by 2028. Thus, the she-recession is particularly worrisome, as it has likely jeopardized momentum made by women and women of color over the past decade.
Women make up 64% of the low-paying workforce, representing about 14 million out of the 22 million people who work in the 40 lowest paying jobs, often receiving less than $12 an hour. Black, Latina and immigrant women are over-represented in low-paid jobs. Black women comprise 6.3% of the overall workforce but 9.7% of workers in low-paid jobs. Latina women comprise 7.7% of the overall workforce but 16% of the low-paid workforce, and immigrant women have similar representations. Women of color are also overrepresented in “essential” yet low-wage service jobs. These are also jobs that lack protections and benefits to mitigate the pandemic’s social and financial impacts. Even when working full time, more than 40% of Latinas, Native American and Black women had household incomes below the poverty line. Job layoffs, business closures and reduced hours due to COVID-related closures likely worsened their preexisting low incomes.
Paid Leave & Wage Increases are Imperative to Women of Color
Approximately 67% of Black mothers, 43% of Latina mothers and 43% of Asian American and Pacific Islander (AAPI) mothers are breadwinners for their families, meaning they earn at least half of their total household income. They are also more likely to be single heads of families: 20.5% of Black households and 14.3% of Hispanic households were led by a single mother. For comparison, 5.9% of White households were led by a single mother. As substantial providers for their families, these working mothers need livable wages to provide for themselves and their families. The federal minimum wage currently stands at $7.25 per hour. For tipped workers, the subminimum wage standard is $2.13 per hour. Women essential workers make up 23% of all workers making under $15 an hour. The proposed Raise the Wage Act of 2021 would raise wages for 32 million workers; 59% of those who would see wage increases are women. 23% of those workers are Black women or Latinas.
Reskilling of workers will also be important in the post-COVID landscape. Pre-COVID, about 11% of Hispanic and Black women were underemployed — meaning part-time workers who were willing and able to work full-time.
Women of color are more likely to be breadwinners and single heads of families. Yet, 62% of Black adults and 73% of Latino adults could not afford to take unpaid leave under the federal Family and Medical Leave Act. Despite a majority of Americans supporting paid family and medical leave, only 20% of private industry workers and 26% of state and local government workers have access to it. Paid leave is needed more than ever, as children have been forced into homeschooling, and households of color are working in jobs with a higher risk of COVID-19 exposure.
Households of color are also more likely to be multigenerational, resulting in more caregiving responsibilities for both children and elderly family members. Cross-national studies of paid leave policies have found that paid parental leave with long durations results in a smaller maternal wage penalty. Paid leave facilitates workforce attachment, promotes greater use of health services, and improves child and maternal health outcomes by allowing mothers the proper time and care to heal from childbirth and childcare in general.
Over the past few decades, women of color have made substantial gains in the overall economy, in addition to playing a significant caregiving role to their families and in their communities. Pre-pandemic, the country was due for change in its minimum wage and paid leave policies. The COVID-induced recession’s stark impacts on America’s working women — especially working women of color — means there is no better time than now to address these issues.
Sally Sim is a NCRC Race, Wealth and Community research consultant.
Jamie Buell is NCRC’s Racial Economic Equity Coordinator.