Women’s increased earnings have helped raise family incomes in the US since the mid-1970s

While recent data have revealed that median male wages in the US have been essentially stagnant since the early 1970s, Richard V. Reeves and Nathan Joo at the Brookings Institution remark that women’s increased earnings over the same period have helped to lift median family incomes by 21%.

US Census Bureau figures indicate that the median male US worker employed year-round and full-time earned less in 2014 than a similarly situated worker earned forty years ago. However, the story for women is very different. In 2014, the median full-time female US worker earned 32% more than in 1975 and an impressive 74% more than in 1960.

Reeves and Joo stress that women still earn considerably less than their male counterparts (approximately 21% less), but note that in a world in which all adults—not just men—are breadwinners, “the economic prospects of US families are clearly linked to the future of women’s wages.” Focussing only on male wages would be a mistake.

In his article exploring equal pay legislation and the gender wage gap for IZA World of Labor, Solomon W. Polachek notes that the gap is already decreasing in most countries. He suggests that effective policies to speed up wage convergence should involve actions that stimulate women’s lifetime work. For example, eradicating taxes that decrease wives’ incentives to work will improve their likelihood of investing in their education and training, enabling them to climb the corporate job ladder. Promoting high-quality day care would achieve the same result.

Lawrence M. Kahn believes that understanding the gender pay gap can help in evaluating labor market efficiency. He says that policies that reduce occupational gender segregation and career interruptions by women may narrow the gender pay gap without the adverse employment effects that can be the result of such things as collective bargaining, minimum wages, or pay systems that compress occupational wage differentials and potentially reduce women’s incentives to enter male-dominated occupations or acquire skills.

Reeves and Joo’s opinion piece can be read in The Wall Street Journal.

Related articles:
Equal pay legislation and the gender wage gap, by Solomon W. Polachek
Wage compression and the gender pay gap, Lawrence M. Kahn