BUSINESS
06/06/2013 09:22 am ET

Minimum Wage Boost Would Shrink The Gender Pay Gap: Analysis

AP

Raising the federal minimum wage would have an unexpected effect on how much women earn relative to men, according to a recent analysis from the National Women’s Law Center, a non-partisan, non-profit research and advocacy group.

Since women make up a large share of low-wage workers nationwide, increasing the minimum wage would help close the overall gender pay gap, the report found.

“[Raising the minimum wage] is one issue that people often think of separately from fair pay,” said Joan Entmacher, the vice president of NWLC, in an interview. “But it is a fair-pay issue.”

Women accounted for two-thirds minium-wage workers last year and make up half or more of the workers earning at or below the minimum wage in every single state, according to the NWLC. Overall, women workers make about 77 cents for every dollar their male counterparts make, on average, according to government data.

The difference between women's and men’s earnings in a state where the minimum wage is above the federal level is three cents smaller, on average, than the gender wage gap in states using the federal minimum wage, according to NWLC. Eliminating that three-cent difference nationwide may close the pay gap by more than 13 percent.

“It only makes sense that if you raise the wages for workers at the bottom, which is where women are concentrated, you will help close the wage gap,” Entmacher said.

The report found that seven out of the 10 states with the smallest difference between what men and women make on average have a minimum wage above the federal level of $7.25 per hour. On the other end of the spectrum, seven out of the 10 states with the largest gender wage gaps have their minimum wage set at the federal level.

“It’s hard to say exactly how much [raising the minimum wage] would do, but it certainly would be particularly important for the lowest-paid women and women of color who now have the largest pay gaps,” Entmacher said. “It would be targeted to women who are put in the greatest economic stress because of the wage gap.”

President Barack Obama proposed raising the minimum wage to $9 an hour and tying it to inflation in his state of the union address earlier this year. Such a plan could help everyone; some economists estimate that if male and female workers made the same amount, economic growth would see a boost of 3 to 4 percentage points.

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