Washington, DC – In a major policy speech today hosted by the Center for American Progress, U.S. Senator Kirsten Gillibrand (D-NY) unveiled a new five-point package aimed at ensuring more middle class women workers have a fair shot at earning financial security by modernizing America’s outdated workplace policies that have failed to keep pace with the demands on the new workforce driving our economy and limits economic growth. With more dual income households than ever before, and 40 percent of women with children at home serving as sole breadwinners, when women get held back financially by systemic impediments in the workplace, the entire middle class and American economy gets held back too. Senator Gillibrand’s American Opportunity Agenda would create paid family medical leave, increase the minimum wage, make quality affordable child care accessible, provide universal pre-k, and ensure equal pay for equal work.
Americans today are doing everything they can just to get by, provide for their kids, and give them the best possible chance to succeed. But with rising costs and dropping wages, many families can’t even keep up, let alone get ahead. While the foundation of the American Dream has never changed, the skills and tools it took to reach it for our parents’ and grandparents’ generations won’t always cut it today in an increasingly competitive global economy. More importantly, the American family – and the face of the American workforce has changed significantly with the increased participation of women, especially mothers.
“The face of the American workforce has changed significantly with the dramatic increased participation of women,” said Senator Gillibrand. “The key to a growing economy – the key to a thriving American middle class in the 21st century – is women. We have to equip more working women with the tools and the opportunities needed to achieve their best in the economy, and their best for their family. These five long overdue solutions to modernize the American workplace with policies that empower women and families – will offer women a chance to earn their way ahead in the economy and achieve their full financial potential.”
“The evidence is clear: we need women to succeed at work for our families and our economy to thrive. Senator Gillibrand has put forward a set of smart and interrelated solutions that update our laws to reflect our changing workforce,” said Neera Tanden, President of Center for American Progress.
Current Family and Medical Leave law provides unpaid, job-protected leave for serious health related events, but only about half of the workforce qualifies for this unpaid leave, and many more simply cannot afford to take it because it is unpaid.
The Family and Medical Insurance Leave Act, or the FAMILY Act, would create an independent trust fund within the Social Security Administration to collect fees and provide benefits. This trust would be funded by employee and employer contributions of 0.2 percent of wages each, creating a self-sufficient program that would not add to the federal budget. The expected cost to the average worker would be similar to the expense of one tall latte a week. Benefit levels, based on existing successful state programs in New Jersey and California, would equal 66 percent of an individual’s typical monthly wages up to a capped monthly amount that would be indexed for inflation. The proposal makes leave available to every individual regardless of the size of their current employer and regardless of whether such individual is currently employed by an employer, self-employed or currently unemployed, as long as the person has sufficient earnings and work history.
The minimum wage disproportionally affects women – who are 64 percent of minimum wage earners. The Fair Minimum Wage Act would increase the minimum wage to $10.10 in three 95-cent increments over a three-year period. To keep up with the rising cost of living, the wage would be indexed to inflation.
The purchasing power of the minimum wage is currently at a historic low, with the last increase in the federal minimum wage taking place in July 2009. If the minimum wage had kept up with inflation, it would be estimated at more than $10.50 an hour today. The legislation would also raise the minimum wage for tipped workers for the first time in more than 20 years, raising it to a level that is 70 percent of the regular minimum wage.
Nationwide, increasing the minimum wage to $10.10 an hour could increase America’s GDP by approximately $33 billion over the course of three years as workers spend their higher earnings at local businesses. That injection of new economic activity would generate up to 140,000 new jobs in the same time span, according to the Economic Policy Institute.
A recent study by the National Women Law Center found that states with a higher minimum wage had a lower wage gap between men and women.
Statistics show that today’s working families must rely more on child care than ever before. A generation ago, a working mother with young children was far less common. In 1975, 39% of mothers with young children worked outside the home; in 2005, that number was 63%. Half of middle-class working moms with children under the age of 5 rely on day care centers or other paid care. Across the nation, more than 6.7 million children are in child care outside the home each day. Families with young children on average spend about $6700 a year on child care, nearly as much as what the average family spends on groceries.
To address the rising cost of child care, Senator Gillibrand is championing flexible options for different types of families with varying needs, to help reduce the cost of quality of child care.
Senator Gillibrand is working to more than double the Dependent and Child Care Tax Credit (DCTC). The current child care tax credit was originally capped at $2,400 in 1981. In the nearly thirty years since then, it has increased by only $600 – even though its value, adjusted for inflation, would be close to $5,700. The Right Start Child Care and Education Act will increase that ceiling to $6,000 per child, up to $12,000 for two children, restoring it beyond its original value, at a time when child care costs have risen to more than $14,000 for an infant. The Right Start Child Care and Education Act will also make the credit fully refundable, and increases the percentage of eligible benefits up to 50% (from 35%), and increases the maximum credit from $1,050 to $3,000.
Additionally, we should encourage college students to study and work in child care. The Right Start Child Care and Education Act will create a new tax credit of $2,000 a year for up to three years for any college graduate who specializes in child care and works at least 1,200 a year in a child care facility.
Finally, Senator Gillibrand will introduce the Child Care Deduction, which will allow families to deduct the costs of child care from their tax liability, up to $14,000. Families that opt not to receive the expanded DCTC, would be able to take the above-the-line deduction, which would help mitigate the high cost of child care. After all, child care expenses are necessary, non-optional costs to families with working parents that cannot forfeit needed wages. Therefore, it is inherently a business decision.
Research has consistently shown that high quality early learning programs improve cognitive, social, emotional, and language development, which are necessary skills for life. In addition, research shows that lowest-income and disadvantaged children are the least likely to participate in preschool programs. And children from middle-class families are only slightly more likely to participate. Preschool opportunities for 3-year-olds appear to be a particular challenge for some middle- income families. Among 3-year-olds, 34 percent of children in families earning $50,000 to $60,000 participate in preschool programs, compared to 42 percent of children in families earning less than $10,000.
Senator Gillibrand is sponsoring Senator Hirono’s Providing Resources Early for Kids (PRE-K) Act. This legislation will help more children arrive at kindergarten ready to succeed. It would establish a federal-state partnership to increase the number of high quality early childhood educators and improve the student to teacher ratios in preschools. It would also provide vital comprehensive services such as health screenings and nutritional assistance. The PRE-K Act would also increase the hours per day and weeks per year families have access to high quality early education programs and improve early education programs serving the youngest children, aged birth to three. Not only is pre-k important for childhood development, it allows parents who can’t afford childcare options to remain in the workforce contributing to the economy.
Even though the Equal Pay Act has been the law of the land for over 40 years, women earn on average 77 cents for every dollar a man makes, and even less for women of color. African American women earn 69 cents on the dollar, and Latinas earn just 58 cents to the dollar. The median earnings for women were $36,931 compared to $47,715 for men, and neither real median earnings nor the female-to-male earnings ratio have increased since 2009. Studies show that paying women a dollar for every dollar a man makes could grow America’s GDP by as much as 9 percent.
Senator Gillibrand is pushing the Paycheck Fairness Act which builds on the promise of the Equal Pay Act of 1963 and helps close the pay gap by empowering women to negotiate for equal pay, closing loopholes courts have created in the law, creating strong incentives for employers to obey the laws, and strengthening federal outreach and enforcement efforts. It closes loopholes employers can use to shortchange workers, hold employers accountable for pay inequity, make it easier for workers to pursue back pay, and provide working women with access to training and other resources to help empower them to negotiate for a paycheck that meets their value.