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Closing Alabama’s Gender Pay Gap Could Grow Economy by $22B

New research found that improving gender equity across the state would increase the state’s income by $15.4 billion and would create 59,000 new jobs. Women earn less than men in every county except Greene.

a flag that reads "mind the pay gap"
(TNS) — Closing the gender pay gap in Alabama would increase state income by $15.4 billion and grow the state economy by $22 billion in one year, as well as create 59,000 new jobs, according to research presented at the inaugural Alabama Workforce and Wage Gap Task Force meeting Tuesday, Aug. 16.

“That’s roughly equal to all the growth we’ve seen in Alabama’s economy since 2004,” said Peregrine Strategies Principal Allen Freyer of the potential state economic growth following a wage gap elimination. “This could be the single largest economic development tool that is on the table,”

The 11-member group, chaired by Melanie Bridgeforth of the Women’s Foundation of Alabama, will meet each month to hear from experts before putting together legislative recommendations and releasing a report in December. The 2023 legislative session will begin in March.

Bridgeforth said that closing the gender wage gap would reduce poverty in the state by half and pointed out that, at the current rate of average pay increases, women in Alabama would not receive equal pay until 2089. Alabama was the 49th state to pass equal pay legislation in 2019, and Bridgeforth said it holds the eighth-largest wage gap in the country.

Freyer also said that women earn less than men in every Alabama county except Greene county and noted there are disparities even within the wage gap between white women and women of color, who still typically earn less than their white female counterparts.

Freyer, whose company Peregrine Strategies is a research partner of the Women’s Foundation of Alabama, presented “big-picture strategies” for maximizing women’s participation in Alabama’s workforce, including closing the gender pay gap, removing barriers to labor force participation and ending occupational segregation.

The first strategy – closing the wage gap – could include strengthening the Clarke-Figures Equal Pay Act, requiring businesses to post salaries in job advertisements and prohibiting businesses to require applicants to reveal prior wages or salaries or retaliate against employees who discussed pay in the workplace.

Barriers to childcare appeared as a frequent issue regarding women’s workforce participation.

In the Status of Women in Alabama report, data showed that 74 percent of women in the state were “breadwinners,” or someone who earns 40 percent or more of total income.

Of those 74 percent, 60 percent were single mothers, said Rachel Bunning, the vice president of external affairs at the Women’s Foundation of Alabama.

Committee member Rep. Joe Lovvorn (R- Auburn) said that he is aware of efforts in the legislature to find childcare solutions for working parents.

Similarly to the predicted impact of closing the wage gap, closing the labor force participation gap would increase the number of women in the labor force by roughly 209,700 and boost average earnings in the state by $7.1 billion. One of the predicted ripple effects would be a creation of more than 32,700 new jobs, which Freyer compared to the population of Gadsden.

“We could add a whole new city to Alabama’s workforce, effectively,” Freyer said.

In addition to legislative suggestions, committee member Amanda Foster, who is a certified financial planner and the co-president of the Huntsville chapter of the American Association of University Women, said she would like to see an increase in STEM camps and guidance for middle school girls.

“Obviously, legislation is probably meant to address things more quickly, but I would love to see some sort of crafting of, you know, whatever bill we come up with, that gives incentive to host these STEM camps,” said Foster, who added that she fell in love with her job in middle school.

During Freyer’s presentation, he said that women in Alabama work in minimum wage jobs at three times the rate of their male counterparts.

“Women, especially women of color, are disproportionately working in the lowest wage occupations. Examples are personal care assistants, office support, food service, while men are typically on average over-represented in the highest wage occupations,” Freyer said. “They’re architects, they’re working in tech, they’re working in management occupations, which means that women are typically working in these jobs to pay a whole lot less.”

Alabama doesn’t have a state minimum wage, meaning that it mirrors the federal minimum wage, which is $7.25.

Freyer added that because women in Alabama are disproportionately represented in minimum wage jobs, a minimum wage increase could be significantly impactful, though it raises concerns about “benefits cliffs,” or a direct cutoff from government benefits, like the Supplemental Nutrition Assistance Program, because of additional income.

Committee member Kelly Woodward, associate dean and professor of management at the University of South Alabama, said that it would be beneficial to have a labor economist look into the potential benefits and pitfalls of raising the minimum wage.

“We can say we’re gonna raise the minimum wage, but we know that there are dominoes that it helps and it hurts,” she said. “Somebody who has that labor economics background that can help provide additional information on both the pros and the cons, and ways of doing it that have the highest positive impacts with the lowest negative impacts.”

Bunning said that the committee will hold a meeting each month until the December report, and that they hope to focus primarily on learning from experts on the front end and begin brainstorming legislative solutions by October or November.

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