Growing Occupations Could Help Decrease the Wage Gap if They Were to Pay a Living Wage

This article was published by the Center for American Progress.

By Jane Farrell and Lindsay Rosenthal

Approximately 6.2 cents, or 27 percent, of our nation’s 23-cent gender wage gap can be explained by occupational segregation. This means that women are more likely to be employed in low-wage or minimum-wage service-sector positions such as home health aides, retail salespersons, or food-service workers.

These jobs fill essential functions in our economy, are increasingly in high demand, and represent occupations with the largest projected job growth over the coming years. Unfortunately, they are also undervalued and most of these positions are not currently providing adequate compensation to the people who work in them, predominantly women.

The top 16 occupations with the most expected job growth will create a total of 6.5 million new jobs by 2020.[1] Women made up 70 percent of workers in these occupations in 2010,[2] but the median annual wage for these 16 jobs was just $30,015 (in 2010 dollars). If these trends hold true through 2020, a disproportionately large and growing number of women will continue to occupy these oftentimes low-wage jobs.

One way that policymakers can help close the gender wage gap is by supporting policies that ensure that all jobs pay a living wage and provide adequate protections and benefits to workers. Our labor policies, including minimum-wage requirements, should help protect those who occupy important, if currently undervalued, positions in our economy.

Sectors with projected job growth must pay a living wage

As shown in the chart below, two of the top four occupations with the most projected growth are home health aides and personal care aides. (see Figure 1) In 2010 women were 88 percent of home health aides and 86 percent of personal care aides. Of these women, half were women of color, who on average experience an even larger gender wage gap than white female counterparts in the same industries.

Jobs in the fastest-growing sectors could decrease the wage gap if they paid a living wage

The median annual wage for these jobs is around $20,000 per year, and many do not offer important benefits. Less than half of home health aides and personal aides employers provide health insurance, and even fewer offer paid sick leave. Women who work in these jobsfrequently rely on public benefits such as food stamps, public housing, or energy assistance to make ends meet even though they are fully employed. While providing important and needed care to other people’s families, they are often forced to choose between missing a day’s pay or caring for their own loved one.

While home health and personal care aides are not currently receiving the compensation they deserve, they provide vital services by caring for elderly and disabled Americans. Millions of Americans currently rely on home health and personal aides for their care and medical needs, and that number is only going to grow in the coming decades as the ratio of people over age 64 to people ages 20 to 64 is expected to rise by 80 percent. Moreover, the home care industry is thriving, bringing in more than $84 billion in revenue in 2009 alone.

Since positions such as home health and personal care aides don’t offer access to decent wages or benefits, these positions suffer from turnover rates of 40 percent to 60 percent. High turnover rates take a toll on the bottom line of the companies that employ these workers because the costs of replacing and training an employee are very high. Replacing an employee making $30,000 a year or less can cost an employer as much as 16 percent of the employee’s annual salary. Turnover also may take a toll on the quality of care that patrons receive. Having a workforce that is always in flux likely limits consumer access to highly experienced home-care providers.

Our society needs the services women are providing in the health sector, and we need to offer them wages and benefits that makes holding those jobs sustainable.

Conclusion

Women are overrepresented in professions that make the list of the top 16 jobs with the most projected job growth over the next few years, but these occupations also pay the lowest median wages.

Looking at particular industries shows stratifications between men and women’s access to higher-paying jobs. Figure 1 above, for example, shows that women are 94 percent of child-care workers, who typically make a median annual wage of less than $20,000 per year. Conversely, women make up less than half of postsecondary teachers, who earned a median annual wage of more than $45,000 in 2010. While women are also more than half of all food-service workers—one of the fastest-growing professions—they are 70 percent of low-paid counter workers, servers, and food-preparation workers but only 20 percent of chefs and head cooks. The same can be said of women and men in retail. The gender wage gap within retail sales is among the largest of any occupation, with women only making 64.3 percent of what their male counterparts make.

The evidence is clear: Women are currently employed in jobs that are serving vital functions in our society. In fact, their labor is in such demand that many of the jobs primarily held by women are among the fastest growing in the country. But we are not valuing their work by compensating them fairly and giving them access to the benefits or salaries that they need. Until we recognize and reward the work of women who currently hold the lowest-paying jobs in this country, we are unlikely to eliminate the wage gap.

Jane Farrell is a Research Assistant with the Economic Policy team at the Center for American Progress. Lindsay Rosenthal is a Research Assistant with the Health Policy program and the Women’s Health and Rights program at the Center.

Endnotes

[1] We chose the top 16 occupations because they were all projected to grow by approximately a quarter of a million jobs or more between 2010 and 2020.

[2] Based on author’s calculations using data from the Bureau of Labor Statistics, Employment and Earnings Report, January 2011 (Department of Labor, 2012); Bureau of Labor Statistics Employment Projects, “Table 1.4: Occupations with the most job growth, 2010 and projected 2020,” available at http://www.bls.gov/emp/ep_table_104.htm (last accessed April 2013).