19 September 2008

Sara K. Gould on the Economic Crisis and Its Disproportionate Impact on Women and Families

Amidst the emphasis on solving the economic crisis facing Wall Street, the crisis crippling women and their families on Main Street continues unabated. Sara K. Gould, President and CEO of the Ms. Foundation, and an expert on women's economic development, warns that the plummeting U.S. economy will further threaten millions of women whose lives already hang in the balance.

"Even at the beginning of the economic downturn, more women than men, and more African Americans and Latinos than whites, were caught in the sub-prime mortgage trap," notes Ms. Gould. "Now that the crisis has escalated, we must expect that the negative repercussions for women -- especially women of color -- will escalate as well.

"Women across the U.S. are playing with the economic deck stacked against them. Taking into account longstanding pay inequities, insidious barriers to employment, record levels of inflation and ever-increasing childcare expenses, women and their families are struggling to keep up and get by. For women who confront the additional barriers of race and class, the obstacles are much greater and the economic straits even worse."

Ms. Gould foresees that the current instability roiling Wall Street's markets will lead to an increasingly dire economic situation for women. "This is especially true," she states, "for low-income women, women of color, single mothers and others who have long experienced the disproportionate impact of flawed economic policies."

Women faced challenges to their economic security before the recent turmoil in the stock markets.

  • The gender-wage ratio has not improved significantly for nearly two decades. Women are still paid only 77.8 cents for every dollar a man makes for full-time work. The disparity is even greater for women of color: African-American women make 63 cents and Latinas make only 52 cents for every dollar of white male earnings. [1] [2]

  • Women comprise the majority of low-wage workers: Women accounted for 68.4% of minimum-wage and below-minimum-wage workers in 2007. [3]

  • Most poor Americans are women and children, with women comprising a full 39%, children, 35%; and men, 26%. [4]

  • Accounting for 37% of families in poverty, the poverty rate for single female-headed households is higher than any other demographic group. [5]

The current economic downturn will impact low-income women and their families the hardest, and drive even more into poverty.

  • Already, the sub-prime mortgage crisis is taking a higher toll on women -- especially women of color. 32% of women borrowers hold sub-prime mortgages vs. 24% of men; and African American and Latino homeowners were 30% more likely to have received sub-prime loans. [6] [7]

  • Poverty rates increase during economic downturns. With the increasing costs of even basic necessities of food, transportation and energy, the number of poor families is growing. [8]

  • Once a family has fallen into it, poverty is difficult to escape. An estimated 60% of families that are in the bottom fifth of income remain there a decade later. [9]

"Across the U.S., women are too well-acquainted with poverty and economic insecurity. Because they know these challenges personally, however, " Ms. Gould points out, "they are often best positioned to develop the most effective strategies to address them.

"Women must be better represented at policy tables; their perspectives and leadership are crucial to bring about long-term economic stability and well-being -- for women, families and communities. So as we hold key members of the public and private sector accountable for our country's worsening economic disaster, let's turn to women driving change at local, state and national levels for economic-justice solutions."

About Sara K. Gould:
Ms. Gould is a national authority on women's economic development and economic security, and a groundbreaking innovator in philanthropy. Ms. Gould was named to the NonProfit Times 2008 Top 50 Power and Influence List for her visionary leadership in advancing women's economic security, in particular her founding of the Collaborative Fund for Women's Economic Development, a pioneering grant-making initiative which leveraged over $10 million in the field of women's microenterprise development in the United States.

  1. "The Gender Wage Gap: 2007," [pdf] Institute for Women's Policy Research. August 2008.

  2. "Data Tables on the Economic Status of Women of Color in the United States: Key Data Points," [pdf] Women's Data Center, Institute for Women's Policy Research. May 20, 2008.

  3. "Characteristics of Minimum Wage Workers: 2007," [pdf] Bureau of Labor Statistics. March 24, 2008.

  4. "Living in Poverty: Vulnerable Women and Children," Headwaters Group for the W.K. Kellogg Foundation. July 2008. p. IV

  5. "Living in Poverty: Vulnerable Women and Children," Headwaters Group for the W.K. Kellogg Foundation. July 2008. p. IV. Based on the "Current Population Survey, 2007 Annual Social and Economic Supplement," U.S. Census Bureau.

  6. "Women are Prime Targets for Subprime Lending: Women are Disproportionately Represented in High-Coast Mortage Market," [pdf] Consumer Federation of America. December 2006.

  7. "Unfair Lending: The Effect of Race and Ethnicity on the Price of Subprime Mortgages," [pdf] Center for Responsible Lending. May 31, 2006. p.3.

  8. "Living in Poverty: Vulnerable Women and Children," Headwaters Group for the W.K. Kellogg Foundation. July 2008. p. IV

  9. The State of Working America, [pdf] Economic Policy Institute. August 2008. p. 4.

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