Closing The Gap

Latinas lose $1.1 million over their careers due to the pay gap—here's what needs to change

Alistair Berg | DigitalVision | Getty Images

Latinas, on average, are earning $0.57 for every dollar paid to White, non-Hispanic men, according to the National Women's Law Center

Latina Equal Pay Day, which this year falls on Oct. 21, marks the day to which Latinas must work — an additional ten-and-a-half months — to earn as much as their White, male coworkers made in 2020. That gap in pay translates to a significant loss of $1,156,440 over a 40-year career.

Break that down further and you'll find $28,911 in lost wages per year, or $2,409 every month — money that could pay for 11 months of child care or 10 months of rent payments and food costs, NWLC calculates.

The wage gap varies for certain Latina communities. Honduran and Guatemalan women, for example, make the smallest percentage of what their White male co-workers are paid, 44% and 47% respectively, compared to Argentinian women who make 83% of their White, male co-workers' salary. Latinas of every origin are also typically paid less than their Latino counterparts in the U.S. — averaging around 82% of their pay.

This lost income, one expert says, has only widened the gap for Latinas during the pandemic.

"These lost earnings not only leave Latinas without a financial cushion to weather the current crisis," Jasmine Tucker, NWLC's director of research, tells CNBC Make It. "But also make it harder for them to build wealth, contributing to the racial wealth gap and barriers to Latinx families' economic prosperity."

While on average women in the U.S. are paid only $0.82 for every dollar paid to men, the gap for many women of color is even larger.

Here's how Tucker says the government, employers and employees can work to close that gap.

Solutions from the top

At the federal level, says Tucker, policy needs to be passed to raise the minimum wage.

"We know that Latinas are overrepresented among low paid and minimum wage jobs," Tucker explains. According to a 2018 survey by the U.S. Census bureau, Latinas make up 16% of the low-paid workforce.

Current legislation, like the Paycheck Fairness Act, has been introduced to address wage discrimination on the basis of sex — defined to include pregnancy, sexual orientation, gender identity and sex characteristics.

But, Tucker says, additional support from the government and employers should also come in the form of high quality and affordable child care for women who are primary household caretakers.

Tucker noted a significant drop in the workforce among women that appears to revolve around the school year — a phenomenon she says has been accelerated by the pandemic. "What we see in September in particular, which also lines up last January, is that women have dropped out of the labor force," says Tucker. In September 2021, more than 300,000 women left the labor force, the largest drop-off of women from the workforce since September 2020, reports the National Women's Law Center. According to the Bureau of Labor Statistics there were 497,000 fewer Latinas in the labor force in September 2021 than February 2020 and are no longer counted in unemployment statistics.

"There needs to be policies in place at the state level and at the federal level that are going to make [closing the gap] even possible," Tucker explains.

Advocating for workplace protections

There is a misconception that when a recession ends, says Tucker, the economic pain ends too: "That's not true."

At its peak in April 2020, the unemployment rate for Latinas reached 20.1%, and it remained in the double digits for six months before finally declining. While Latinas' unemployment rate was 5.6% in September 2021, that is largely because there were fewer Latinas in the labor force overall.

Because of Latinas' higher rates of unemployment, she says, when they return to the workforce, many will be willing to accept the first job offer they receive which may pay less. Latinas, Tucker says, should take a hard look at the work they're doing, and how they're being compensated in comparison to their peers.

"It's hard at the individual level to give advice right now because there are so many people looking for work," Tucker admits. "It's a really scary place to be right now if you don't have a job and you need income."

It shouldn't just be on the worker, says Tucker, to close the gap. She says employers need to take a look internally to see who is being promoted and where the pay gap exists: "Employers can really think about how they're paying people, how that's being reflected?"

Employers, she says, are talking about how they can go back to February 2020, but employees don't want to go back. Tucker recommends companies put workplace protections in place that allow employees to safely share their concerns.

Still, she says, Latinas should support and advocate for policies within their states and workplaces that will support their needs — like child care or family leave. Even exploring unionization options if you're not already represented, she says.

"Latinas have been shortchanged and their work has been undervalued," says Tucker. "Neither they nor their families can afford to wait for change."

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