Giving Compass' Take:

• Richard V. Reeves and Ashley Schobert discuss the family wage penalty that hurts low- and middle-income parents.

• Hocan funders work to reduce/eliminate the motherhood/family wage penalty? 

• Read about paid leave and economic growth. 

To bolster middle class family incomes, women are likely to have to work more, rather than less. This has costs in terms of family time, leisure, but it is a fact of modern economic life. Better to help families cope with it–through paid leave policies, flexible working arrangements, affordable childcare, and fair scheduling rules–than to rail against it.

Poor families have long been reliant on women’s wages, not least because many of them are single parents. But today, women are the main breadwinner in 40% of middle-class families (those in the middle three-fifths of the income distribution) compared to 26% in 1975. Far from being “pin money,” the earnings of women, including mothers, are keeping middle class families economically afloat. Because the drop in a woman’s earnings following the birth of a child is so severe, household income drops by six to eight percent, a hit that persists for years.

Over the last few decades, the wages of men with less than a college education have not been growing, while the wages of women have risen across the board, though much more so at the top. What this means is that the motherhood wage penalty has become a family wage penalty.

The earnings of a new mom fall by four to ten percent. Even as more mothers work, the motherhood wage penalty remains largely unchanged. Why?

One obvious reason is that women still take on more childcare responsibilities than fathers. To that extent, the wage “penalty” is in part a reflection of family preferences.

The U.S. remains the only advanced economy without a national paid leave policy, although there are growing bipartisan calls for movement on this front and many states have introduced legislation. There is strong evidence that access to paid leave can help parents, especially mothers, to keep earning. Paternity leave can help Dad to do more on the home front, thereby easing pressure on Mom.

Second, when both parents are at work, access to affordable, high-quality childcare is vital. =

Third, a growing number of parents have to cope with uncertain schedules.

Read the full article about the family wage penalty by Richard V. Reeves and Ashley Schobert at Brookings.