Wednesday, November 14, 2012

Gender Income Differential

One of the interesting aspects of the wage gap between men and women is that it can be easy to ignore for traditional nuclear families.  If the wife doesn't make the money, the husband can pick up the slack.  Such an argument ignores the fact that there are a huge number of families that don't have a second income as a safety net.

That number is 10 million. [Citation]

These families are headed by a single female, who is only bringing in 72% of what a family with a male wage earner does.  And it is a growing population.  Take some of the neighborhoods around Washington DC that have 20% of the households in this category.  Most of these areas have a median individual income of $40,000.  For every 10,000 people, you would be taking $22,000,000 out of the economy.

But at an individual level, the numbers are simply terrible.  On a median salary of $40,000, 72% is an annual salary of $28,000.  That takes a monthly salary from $3333 to $2400.  That $900 is a larger drop than the average American family spends on any expense other than housing.  [Citation]