Proposal 3: The Wage Gap & The American Economy

For my third proposal I have decided to take a look at the gender wage gap from an entirely new perspective.  I will be looking into how the gap impacts the American economy and how reducing it can have an immense impact on stimulating the economy.  I had always thought of the gender wage gap as an individual or family issue, but this week I learned that the gap has massive implications on the American economy as a whole.

About a month ago The Huffington Post published an article about the gap and its large-scale economic implications after a spectator at the second presidential debate asked the candidates what they planned to do about the gap.  Instead of reporting on the size and scale of the gap, Huff Post reported on how the economy would benefit if the gap were eliminated.  The article cites that equal pay would allow the American economy to grow by 3-4 percentage points (the 2009 stimulus package only resulted in a growth of 1.5%)!  This percentage would further increase, as more women would join the workforce after becoming enticed by higher pay.  There would lead to greater investment in women-owned businesses.  According to the National Women’s Business Council, this could equate to a $3 trillion dollar impact on the economy and “the maintenance of 23 million jobs, 16 percent of all U.S. jobs.  These jobs not only sustain the individual worker, but contribute to the economic security of their families, the economic vitality of their communities and the nation.”

Additionally, higher wages will leave women with increased disposable income, which will ultimately cause them to consume at a greater rate.  Moreover, 70% of those who receive Medicaid and 80% of those who receive welfare are women.  By increasing females’ income we will reduce the number of individuals who rely upon federal aid.  This will amount to large savings for the American government.

For my white paper I would like to focus on the impact of the wage gap on the individual as well as on the economy as a whole.


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