The Economic Impact of Equal Pay by State
Persistent earnings inequality for working women translates into lower lifetime pay for women, less income for families, and higher rates of poverty across the United States. In each state in the country, women experience lower earnings and higher poverty rates than men. The economic impact of this persistent pay inequality is far-reaching: if women in the United States received equal pay with comparable men, poverty for working women would be reduced by half and the U.S. economy would have added $482 billion (equivalent to 2.8 percent of 2014 GDP) to its economy. This fact sheet presents state-level data on the impact equal pay would have on poverty and each state’s economy.
Download the fact sheet, The Economic Impact of Equal Pay by State.
Equal Pay Would Reduce Poverty for Working Women in Each State
Closing the gender wage gap would lower the poverty rates among women in every U.S. state and help many women and families achieve economic security. In the United States as a whole, if working women aged 18 and older were paid the same as comparable men—men who are of the same age, have the same level of education, work the same number of hours, and have the same urban/rural status—the poverty rate among all working women would fall from 8.2 to 4.0 percent.
- If working women were paid the same as comparable men, the poverty rate among all working women would fall by more than half in 28 states (Figure 1 and Table 1).
- New Hampshire would see the greatest impact on poverty reduction, with equal pay cutting poverty by 60 percent among working women. Wyoming (58.5 percent), Maryland (57.6 percent), North Dakota (57.4 percent), and Vermont (57.0 percent) would also see the greatest impacts of equal pay on reducing poverty.
- Equal pay would also cut poverty significantly in states with higher than average poverty rates among working women. New Mexico’s poverty rate among working women would decline to 6.1 percent from the national high of 13 percent, Mississippi’s would decline to 7.7 percent from 12.5 percent, and Louisiana’s would decline to 5.3 percent from 12.1 percent.
The high poverty rate among working single mothers would also fall dramatically from 29.3 percent to 15.8 percent—by nearly half—if they earned the same as comparable men.
- In 16 states, the poverty rate among single mothers would fall by more than half if working single mothers were paid the same as comparable men. In all states, poverty among working single mothers would fall by nearly a third or more (Table 1).
- The poverty rate among single mothers would see the greatest reduction in Louisiana, where it would fall by 61.3 percent. Louisiana has the highest poverty rate among single working mothers in the nation. In the southern states taken together, poverty among single working mothers would fall by nearly half, from 30.8 percent to 15.9 percent.
Equal Pay Would Grow Each State’s Economy
Closing the gender wage gap would help many women and families, and particularly single women and mothers, achieve economic security. For each state and the nation overall—and for the men, women, and families who live in communities around the country—equal pay could provide a significant boost to the economy.
If all working women in the United States aged 18 and older were paid the same as comparable men—men of the same age, level of education, and urban/rural residence, and who work the same number of hours—women’s average earnings would increase from $37,358 to $43,909 ($6,551 or 17.5 percent) annually (Table 2). Added up across all working women in the United States, this would amount to an earnings increase of $482.2 billion, or 2.8 percent of the country’s gross domestic product (GDP) in 2014 (see Figure 2 for state-by-state data). Put another way, U.S. women—who are also consumers, savers, and asset owners—lost $482 billion in 2013 due to the gender wage gap.
Closing the gender wage gap would increase women’s earnings and grow each state’s economy.
- Idaho would see the largest proportional boost to its state economy if working women in the state were paid the same as comparable men (Figure 2). Working women in Idaho would earn $6,620 more per year (a 22.1 percent increase in annual earnings). Added up for all working women in Idaho, the state would have added $2.5 billion dollars to its economy, the equivalent of nearly 4.0 percent of the state’s GDP in 2014. Half of the U.S. states would have boosted their economy by at least 3.0 percent of the state’s overall GDP if women had equal pay (Figure 2 and Table 2).
- Larger state economies would also see a boost from equal pay. If women were paid the same as comparable men in California, the state’s working women would have earned $51.8 billion more dollars, an earnings increase that, by itself, is greater than the entire economy of South Dakota ($45.9 billion). Similarly, women in Texas would have earned $39.5 billion more, which is much larger than the entire economic output of Vermont ($29.6 billion).