The labor market is remarkably strong — unemployment is sitting at five-decade lows even as the Federal Reserve does all it can to cool the economy in its fight against inflation. Wage growth is also increasing as labor demand outpaces supply.
But not all workers have benefited equally from those wage gains.
A new Wells Fargo report shows that the number of single women in the labor force has grown three times faster than the broader labor pool over the last decade. At the same time, their salaries have failed to keep up with those of their male counterparts.
Those gaps have a profound effect not only on the well being of workers but also on the overall economy and stock market.
What's happening: Never-married women earned just 92% of what never-married men did last year, according to the Wells Fargo report. Women also reported having 29% less wealth, overall.
It's not just single women. The overall wage gap between men and women has stagnated over the last 20 years.
In 2022, US women on average earned about 82 cents for every dollar a man earned, according to a new Pew Research Center analysis of median hourly earnings of both full- and part-time workers.
That represents an improvement of just 3 cents since 2002.
Those wage gaps are "persistently disappointing," ADP's Chief Economist Nela Richardson told CNN on Thursday. She said the gaps are seen across all age groups, job levels and industries.
They're also bad for the economy as a whole. On average, women employed in the US lose a combined $1.6 trillion every year due to the wage gap, according to the National Partnership for Women and Families. That loss of wages means women have less money to support themselves and retire on, as well as to spend in their communities.
Markets suffer: Companies with smaller gender pay gaps tend to be rewarded by their shareholders. That may be because of the popularity of ESG investing — when traders evaluate companies using environmental, social and governance factors.
"The gender pay gap is informing investment strategies," wrote Refinitiv analysts in a recent report. "Our recent analysis shows that [shares of] companies with no gender pay gap outperform companies with pay gaps between male and female employees," wrote Refinitiv.
Companies with more women in high-paying, executive positions also tend to be more profitable.
The SHE fund, which was designed to measure the performance of US large cap stocks that are gender diverse, has returned 3.1% so far this year — that's a full percentage point higher than the S&P 500.
A McKinsey study of 366 companies across the United States and United Kingdom found that companies in the top 25% for gender diversity on executive teams were also 25% more likely than their counterparts to achieve above-average profitability.
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