Does women’s work increase income inequality?
In recent years, it’s been fashionable in the United States to think so. Under eye-catching headlines like “Did Women’s Lib Cause Rising Income Inequality?” and “How When Harry Met Sally Explains Inequality,” proponents of an “assortative mating” theory of inequality have argued that the widespread movement of women into the professional workplace since the 1970s has brought high-earning men and women together into even more high-earning households in an entirely new way.
And yet, the preponderance of research looking at the relationship between women’s increased earnings from work and income inequality among households has long argued the opposite. Most recently, a new study of household income and married women’s employment data by my Center for American Progress colleague Brendan Duke shows that married women’s increased earnings between 1963 and 2013 had a marked effect on slowing the rate of growth of income inequality in the United States.
Duke’s data showed that income inequality among married households in the U.S. — measured by the distribution of income among the bottom 95 percent of married couples — rose 24.9 percent between 1963 and 2013. In that same period, women’s earnings rose fivefold. As Duke demonstrates, if women’s earnings had not increased as they did, inequality would have grown more than 50 percent more quickly.
In most of the advanced industrialized world, it’s long been common knowledge that when women work, whole families — and entire economies — thrive. As a result, most of our peer nations around the globe now provide smart work-family policies that help women remain in the workforce once they become mothers.
The nations with the best policies for promoting work-family integration — those with paid family leave provisions of six months to one year, and with extensive offerings of high-quality, affordable child care — have also emerged as the winners in the fight against income inequality.
Pär Nuder, Sweden’s former minister of finance, underscored this point in Washington, D.C., earlier this year at a gathering of the Inclusive Prosperity Commission, a transatlantic group of leading economists, government officials and policymakers chaired by former U.S. Treasury Secretary Larry Summers and former UK Shadow Chancellor Ed Balls. Explaining why the Scandinavian nations have largely managed to avoid the “toxic” levels of inequality now rampant in much of Europe and the United States, he noted, “we have, contrary to many other countries in Europe and elsewhere, mobilized the whole work force. Not only the male part but also women.”
Yet the United States remains an outlier among nations in our resistance to embrace the contemporary realities of working motherhood. As a result, we’re now the only industrialized nation that does not guarantee paid time off for working mothers —and fathers — to care for a new child. We’re one of the only high-income nations that does not guarantee workers paid sick leave or access to such supports as family-friendly flexible scheduling. And, partly as a result, we’ve fallen in recent years from being a leader to an international laggard in our rates of women’s workforce participation; from 1990 to 2010, the United States fell from 6th to 17th place in women’s labor force participation among OECD countries.
Late last year, the Department of Labor took a stab at quantifying what our destructive lack of support for working women means for the U.S. economy. They found that if women of prime working age in the U.S. were participating in the labor force at the same rate as they do in Canada or Germany, there would be roughly 5.5 million more women employed here.
All else being equal, that would increase GDP by an estimated 3.5 percent. As Heidi Shierholz, chief economist at the Department of Labor, explained, “That is over $500 billion of economic activity annually that we are leaving on the table in large part because we don’t have the labor market policies – paid leave, workplace flexibility, quality child and eldercare – that our peer countries have that boost labor force participation, productivity, work engagement and better allocation of talent across the economy.”
In the United States, a longstanding ambivalence about working motherhood has combined powerfully with organized business resistance to “government mandates” to keep our country from moving forward with the rest of the industrialized world in adopting policies that support women’s employment. This means we have deprived ourselves of a key engine of broadly shared economic growth. In 2013, the United States earned the dubious distinction of being the most unequal high-income country on earth. We can no longer afford to let emotion and ideology get in the way of change.
Judith Warner is a Senior Fellow at the Center for American Progress, and is author of the New York Times bestseller, Perfect Madness: Motherhood in the Age of Anxiety.