Funding paid leave and child care narrows gender wage gap, says new report
The COVID-19 pandemic made it very clear that women still bear more of the responsibility for caring for their children and families, while also taking care of household tasks. That takes a toll on their employment, yet federal and state policies can help to close those gaps, according to a new analysis.
In states that offer benefits like paid leave and child care, the gender pay gap is smaller, on average, and women have a slightly higher labor participation, according to a recent report from the Century Foundation, a progressive think tank.
Researchers graded each state ranging from A to F on their laws and regulations in five policy areas related to care: child care and early learning; home and community-based services/long-term care; paid family and medical leave; paid sick and safe days; and fair working conditions for care workers.
The majority of U.S. states do not provide any paid family or medical leave, and lost points on their overall grade. In fact, 35 states received a grade below a C, while five states—Florida, Alabama, Indiana, West Virginia, and Mississippi—received an F. No state received an A grade.
“This report really makes one thing absolutely clear, and that is when it comes to caregiving policies, the United States simply is not making the grade. Some states have made some great strides forward, including my home state of Washington, but they can’t do it alone anymore,” Sen. Patty Murray (D-Wash.) said Wednesday.
Yet enacting policies that make childcare affordable, provide universal pre-K, and provide paid family and medical leave can actually help narrow the gender pay gap and increase women’s participation in the workforce.
“We know care policies deliver an array of benefits to children, families, communities, employers, and investing in the care economy is essential to building an equitable and sustainable economy,” said Julie Kashen, director of women’s economic justice at the Century Foundation.
"This report makes clear, falling short on caregiving is perpetuating sexism and racism that have long harmed workers of color and women and held our economy back from its potential. When push comes to shove, it should not matter what state you live in, or how much you make. Everyone should have the caregiving support they need to thrive," Murray said.
Although the $3.5 trillion budget reconciliation is still ongoing, the House Ways and Means Committee has passed provisions of the Build Back Better Act reconciliation budget that would allow for 12 weeks of paid family and medical leave for all workers.
Currently six states—California, Massachusetts, New Jersey, New York, Rhode Island, and Washington— and Washington, D.C. have paid family and medical leave programs in place. Connecticut, Oregon, and Colorado will implement their programs in 2022, 2023, and 2024, respectively.
As part of the reconciliation process, the House committees have also approved federal funding to help families with children under the age of 5 spend no more than 7% of their annual income on childcare. It also includes universal pre-K, the creation of a Child Care Information Network, a new Child Care Wage Grant program to boost wages for childcare workers, as well as $15 billion for direct investments in childcare facilities.
Yet this funding package still faces an uphill battle to get through Congress, with both moderate Democrats, including Sen. Joe Manchin (D-W.V.), and Republicans saying they can't support the multi-trillion dollar price tag. Even House Speaker Nancy Pelosi (D-Calif.) said Sunday that it seemed "self-evident" that the final package would fall below the project $3.5 trillion—although what will be cut to make room is unclear.
But advocates like Murray say the proposed care policies should prevail, contending that child care and leave provisions not only helps workers, but also the broader U.S. economy. "I cannot overstate how important this fight is because passing these policies will truly be transformative for our working families for women, for people of color for children for older Americans for people with disabilities, and ultimately for our entire economy," she said.
More must-read business news and analysis from Fortune:
- What a modern energy crisis looks like and why no country is safe
- Frustrated carmakers upend industry after chip shortage shatters their faith in suppliers
- Portugal leads the world in COVID-19 vaccinations
- A WHO-approved Novavax vaccine could upstage mRNA jabs—if it can solve its manufacturing delays
- Bitcoin has another major pollution problem brewing
Subscribe to Fortune Daily to get essential business stories straight to your inbox each morning.