Today is Equal Pay Day, which marks how far into the new year women had to work to earn what men made in the year prior—getting paid just 82 cents for every dollar paid to men. This gender wage gap hurts all women, and we need to fix it. But this year, we’re sounding the alarm for the millions of Latinas and Black women who have been pushed to the edge of poverty by COVID-19 and a system that’s failed them for generations.
Black women and Latinas face an even bigger pay gap than women overall: Black women are paid just 63 cents, and Latinas only 55 cents, for every dollar paid to white men. This makes it much harder for them to save to weather financial challenges—let alone the economic crisis created by COVID-19.
According to new research by LeanIn.Org and SurveyMonkey, half of Latinas and Black women have struggled to pay for basic necessities like rent and childcare in the past year. Before the pandemic, a third of Black women and Latinas had less than $300 in savings. Now fully half of Latinas and Black women have less than $300 to fall back on. Three hundred dollars is barely a month’s worth of groceries. It won’t cover a visit to the emergency room or the cost of replacing a car radiator, leaving many Black women and Latinas one mishap or missed paycheck from being wiped out financially. One in five Black women and Latinas say the pandemic has been “devastating” to their finances—and they’re twice as likely as white men and women to feel this way.
Of course, this economic inequity predates the pandemic; the system has long been stacked against Latinas and Black women. Compared to other groups of workers, Latinas and Black women are overrepresented in low-wage jobs, and they are far more likely to have lost their jobs as a result of the pandemic. And these income disparities are exacerbated by discriminatory lending practices. In 2019, an analysis of more than 7 million mortgages by the University of California at Berkeley showed that Latinx and Black borrowers were more likely to be denied loans than white borrowers with similar incomes and credit scores.
Put all this together and it’s almost impossible for Black women and Latinas to achieve financial security, let alone accumulate any wealth. As one Black woman in our Lean In Circles community told us, “There’s a sort of mental calculus that you do when you’re just making enough. You’re often just thinking how can I get food, how can I have a little bit of spare change? You’re not thinking about saving for a rainy day or an emergency fund. You’re definitely not thinking about saving for retirement.”
On top of this, Latinas and Black women are less likely to receive the critical support they need to manage work and life. They are less likely than white workers to have access to paid leave, which means they’re more often forced to choose between staying home to care for their families or going to work to feed them. In our recent survey, 47% of Black women and 41% of Latinas said they went to work during the pandemic despite having a good reason to stay home, such as feeling sick or not having childcare, compared to about a third of white women. According to data from the Economic Policy Institute, the average cost of childcare for two children can be upwards of $20,000 a year, which puts many Black and Latina mothers in an impossible position. They need childcare to go to work, but paying for it can cut their income by more than half.
Congress’s passage of the American Rescue Plan is a critical step to get Black women and Latinas—especially mothers—through the coming months. But these are long-term systemic problems, and they require long-term systemic solutions. Business leaders need to close the gender and racial pay gaps once and for all, and policymakers at all levels need to take bold steps to address the trifecta of issues that disproportionately impact Black women and Latinas. They need to raise the minimum wage to $15 an hour, make childcare far more accessible and affordable, and provide national paid family leave to all employees.
If Latinas and Black women were paid fairly—i.e., at the same level as white men—a typical Latina would earn more than $1 million in additional income over the course of her career, and a typical Black woman would earn close to an additional $950,000. Those lifetime earnings would go a long way toward allowing Black women and Latinas to build real safety nets for their families. If the minimum wage rose to $15 an hour, more than one in three women of color would get a raise. And national paid leave and affordable childcare would create the infrastructure to lift up millions of working moms and their families.
It shouldn’t have taken a global crisis, but the path forward has never been clearer. If we want to fix the system, we need to put policies and programs in place to support Latinas, Black women, and other groups of women who have been underserved for too long. We need our leaders to fight like hell for the women who need it most.
Rachel Thomas is the CEO of LeanIn.Org. Stacy Brown-Philpot is the former CEO of TaskRabbit, a board member of HP, Nordstrom, and Black Girls Code, and an adviser to the SB Opportunity Fund.
