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American Working Women in Poverty and
the Effect on the Economy

Women in America facing poverty makes up twelve percent of
Americans in poverty.  Over half of these
women in this category are working and have children.  In fact, working women are twice as likely as
men to be in poverty if they are a mother according to U.S. Bureau of Labor Statistic
(“A Profile
of the Working Poor, 2015: BLS Reports: U.S. Bureau of Labor Statistics”,
2018). Unfortunately, this rate is steadily increasing with no signs of
improvement.  Woman are more educated
than they have ever been in history and laws are in place to make it illegal to
discriminate amongst this class of people. 
However, women in poverty in the United States still remain below the poverty
level.  The segregation of paying jobs,
head of household status and cost of childcare are contributing factors that
have an effect on women in this classification. 
For the American economy to reach its fullest potential policies must be
put in place to combat poverty, especially for women that are major
contributors financially to most households throughout the country.

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Segregation of Paying Jobs

Men in the workforce generally earn more than women.  The segregation of gender paying jobs can be
seen in every region in the country and industry from healthcare to real estate.
When women are not paid equally it results in lower wages going into the household’s
budget.  According to the Institute for
Women’s Policy Research if women were paid equally “the poverty rate for all
women would be cut in half, falling to 3.9 percent from 8.1 percent and equal
pay would mean a significant drop in poverty from 11.0 percent to 4.6 percent” (“How Equal Pay for
Working Women Would Reduce Poverty and Grow the American Economy | Institute
for Women’s Policy Research”, 2018).

Equal pay for women has an impact on the entire family.   The
discrimination that they face to have higher earnings like their male colleagues
prevents many women from making ends meet. 
Women may have to pay for basic housing and food needs with the help of
government programs like Section 8 and Food Stamps.

The wage gap also
plays a role on various other sectors.  Women
making less also contribute less to their retirement or social security that
will affect them in their future.  The family
takes the biggest loss by this discrimination because women can’t raise a
family with the wages many of them are receiving despite having similar skills
and education that males do.  Businesses
also suffer from costly discrimination lawsuits.  This inequality has existed since women
entered the workforce and will more than likely continue for decades to come.

Head of Household Status

Working women in poverty are usually the primary care givers
to their families. American women in forty percent of all households with children
are also the head of their household and primary breadwinner (“Breadwinning
Mothers Are Increasingly the U.S. Norm – Center for American Progress”,
2018).  The family structure is at an
all-time high with single-family households. 
The majority of these families leave the woman responsible for the
children and providing the income to sustain her entire household.  They must work full time in order to pay for
her family’s basic needs.  Women in this
group take careful consideration when taking time off work for sick leave or pregnancy
related time off so that they receive full compensation for the jobs that they
work. Children and sometimes elderly
parents depend on the women’s income as a single parent household.  According to the Harvard Business
Review article titled, Executive Women
and the Myth of Having It All, a study found that one child produces a
“penalty” of 6% of women’s earnings, while two children produce a wage
penalty of 13% (“Executive Women and the Myth of Having It All”,
2018).  If motherhood results in a penalty
that greatly causes a disadvantage and impact to their finances it’s hard for
women to raise their income with limited resources. 

Cost of Childcare

The cost of childcare for younger children is a major
expense in a household’s monthly budget. 
 The high cost of day care exceeds
housing and transportation for most families. 
This expense can place a major strain on the family’s finances.  Some women, especially in poverty will choose
to stop working to stay home and care for their child by relying on government
assistance for all of their other bills. 
When parents are having a hard time paying for today’s childcare it’s unlikely
that they are able to save for future expenditures.  This will also have an impact on the future
when families have little saved for retirement or emergencies.

Macroeconomics Policy to Reduce Poverty

America has a big problem on their hands that involves women
and poverty.  If we significantly decrease
the wage gap between men and women, offer more support and tax credits to the
head of the household and provide affordable childcare we can help millions of
women advance above the poverty level.  The
government’s involvement with policies on state and federal levels as well as
businesses that focus on cultures of equality and incentives that will help
with the family household will also eliminate poverty for working women. All of
these factors will help women reach their highest potential but also boost the
economy now and in the future.  Children
born into poverty are more likely to experience poverty and hardship throughout
their life.  If we stop the cycle now we
can help the economy on the broader level with growth, productivity in the
workforce but more importantly we can make a difference in lives of families throughout
the nation.



A Profile of the Working Poor,
2015 : BLS Reports: U.S. Bureau of Labor Statistics. (2018). Retrieved
29 January 2018, from


Banking on Women and Girls:
Key to Global Poverty Alleviation. (2018). Harvard Business Review. Retrieved
28 January 2018, from


Breadwinning Mothers Are
Increasingly the U.S. Norm – Center for American Progress. (2018). Center for
American Progress. Retrieved 29 January 2018, from

Breadwinning Mothers Are Increasingly the U.S. Norm


Cohn, D., Caumont, A., Cohn,
D., & Caumont, A. (2018). 10 demographic trends that are shaping the
U.S. and the world. Pew Research Center. Retrieved 28 January 2018,


Executive Women and the Myth
of Having It All. (2018). Harvard Business Review. Retrieved 28 January 2018,


How Equal Pay for Working
Women would Reduce Poverty and Grow the American Economy | Institute for
Women’s Policy Research. (2018). Institute for Women’s Policy Research. Retrieved 28
January 2018, from 



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