Women’s wages are rising, but families are getting poorer. Why?

3 Apr

From Brad Wilcox in the Atlantic:

Single mom and fast-food worker Liz Seelye with her kids at her home in Cleveland, Ohio (AP)

The good news, trumpeted in Women’s Work, the latest report from the Pew Economic Mobility Project, is that dramatic increases in women’s labor-force participation have boosted the “financial security and mobility” of millions of families across America since 1970. The bad news is that growing economic opportunities for women have not translated into more family income for poor and working-class families at the lower end of the income ladder. That’s surprising, because up and down the income ladder, women have been bringing home more bacon since the 1970s, as the figure below illustrates.

Average personal income for 25- to 50-year-old women, in 2010 dollars, by quintile (W. Bradford Wilcox/Rebecca J. Rosen)

What gives? What accounts for the paradox that women’s income is rising across the board yet family income is falling for the bottom 40 percent of families? Mainly, to paraphrase Hanna Rosin, the end of marriage and men in working-class and poor communities across the nation, coupled with the fact that maternal labor-force participation has plateaued since the 1990s. That is, a dramatic retreat from marriage, declines in men’s employment and income, and a leveling off of maternal labor-force participation have all combined to limit the income available to lower-income families, and to offset the increases in women’s income documented in this new report.

The economic bad news for lower-income families can be seen in the divergent fortunes of middle- and upper-class families versus working-class and poor families depicted below. Since 1970, family income has fallen for the lowest two quintiles, even as it has risen for the top three quintiles.

Average family income in 2010 dollars, by quintile (W. Bradford Wilcox/Rebecca J. Rosen)

One reason that lower-income families are losing economic ground is that gains in women’s income have been offset by declines in marriage among the poor and working class. As the figure below indicates, more than half of these families are headed by just one parent—typically a single mother. Lacking the income of two parents, or the income of a father, these single-parent families are much less likely to reap the benefits of increases in income that have accrued to today’s working women. This is one reason why single-mother families are much more likely to be struggling to make ends meet. Indeed, one recent estimate found that the median income for married families in 2012 was about $81,000, compared to about $25,000 for single mothers.

By contrast, for families in the middle and upper classes, women’s work has generally translated into more family income because marriage is alive and well. The figure below shows that married, two-parent families remain much more common at the upper-end of the family income ladder in America. So, one reason that the rich are getting richer is that they are much more likely to get and stay married, and profit from the benefits of pooling the relatively high income of two parents, compared to families down the income ladder, often relying on the relatively low income of a single parent. In the words of Richard Reeves, policy director of Brookings’ Center on Children and Families, “Matrimony is flourishing among the rich but floundering among the poor, leading to a large, corresponding ‘marriage gap.’”

W. Bradford Wilcox/Rebecca J. Rosen

Another major factor holding back families financially in the bottom 40 percent are declines in men’s income. Consistent with Rosin’s thesis, which argues that many men in the United States are seeing their economic fortunes erode, the graph below indicates that men’s personal income has fallen across most groups, but particularly among working-class and poor men. So, one more reason that family income has declined for poor and working-class families is that husbands and boyfriends have less dough to put on the table than they once did. This is particularly important because, even today, as the Pew report notes, men’s wage rates in couple-headed families are almost “twice as important as those of their female partners for boosting family income.”

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