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Indiana now has sixth widest gender pay gap in nation

The Indiana Statehouse. Indiana has the sixth widest gender pay gap in the nation, according to a new study.

Doug Ross, The Times

A new study by the Indiana Institute for Working Families found Indiana has the sixth highest gender pay gap in the nation, with women earning 26 percent less on average than men.

In 2016, Indiana's gender wage gap grew by 2 percentage points as compared to 2015, even while the gender pay gap shrunk nationally. The study found full-time male workers had a median income that was $12,717 more than full-time female workers made in Indiana last year.

Women only made 74 cents to every $1 men earned in Indiana in 2016, compared to 80 cents per $1 nationally.

"In Indiana, women earn less, own less and experience poverty more often than men," the authors of "Wages, Wealth, and Poverty: Where Hoosier Women Stand and Ways our State Can Close the Gaps" wrote. "These gaps raise important questions about identity, opportunity, and well-being, and they suggest that our systems could and should be structured differently to promote broader prosperity."

The authors of the study called for an examination of the way in which Indiana “distributes opportunities, resources and life outcomes.”

"An examination of the gender wage gap is a chance to open up much deeper conversations about gender, work and family, about who thrives and who struggles, and about whether or not the opportunity to prosper is truly accessible to all,” they wrote. “These are conversations that Hoosiers need to have."

Solutions

Government can address the pay gaps with policies like mandating paid leave or boosting the minimum wage, Indiana Institute for Working Families Policy Analyst Erin Macey said.

“It is something we need to work on,” she said. “We focus on business-friendly policies in Indiana. But we need to look at the effects of that and who’s left behind when we create those types of policies.”

Sexual harassment, which has emerged as a major societal issue after actresses spoke out about experiences with film producer Harvey Weinstein in October, has had serious implications on women’s earnings in many occupations, Macey said. Lower earnings over the course of a career have resulted in less wealth for women.

“They have less to save for retirement,” she said. “More onus is placed on the individual women. They’re less able to pay down their student loan debt. It exacerbates the difference between men’s wages and women’s wages, and it’s a conversation we need to have moving forward.”

Another significant problem is that 39 percent of single mothers statewide live in poverty, Macey said.

“It’s staggering,” she said. “That’s appalling. We need to look at how we support single mothers in the workplace. We need to look at fair scheduling, enough notice to secure child care, clearing pathways to higher wage jobs, guaranteeing paid sick days.”

40 percent differential

The gender pay gap was even more pronounced in Northwest Indiana, the study found. The difference between male and female wages for full-time workers was 40 percent in Porter County, 37 percent in Jasper County, 30 percent in Lake County, and 29 percent in LaPorte and Newton counties.

In Porter County, men working full-time earned a median income of $63,435 a year between 2011 and 2015, while women working full-time made a median income of $38,163 annually during the same period, according to the study. In Lake County, men made a median salary of $51,913 a year between 2011 and 2015, while women only earned a median income of $36,578 a year over that time.

Indiana University Northwest assistant professor of economics Micah Pollak said two of the biggest contributors were high poverty rates and the types of industries that are most prevalent in Northwest Indiana.

“Higher-paying jobs in Northwest Indiana are concentrated in male-dominated industries,” Pollak said. “Two of the highest-paying sectors in Lake County are manufacturing, which is 76.7 percent male with an average annual wage of $82,342 and construction, which is 92.6 percent male and has an average annual wage of $67,540.”

Lower-paying jobs and high poverty rates also pressure many households to choose between careers and families.

“Often, it is the women in these households who are forced to sacrifice career and pay in order to care for family,” Pollack said. “Mean household income for Lake County in 2016 was $65,888, which was 1 percent lower than for the state of Indiana and 15 percent lower than for the United States overall. The poverty rate for families in Lake County in 2016 was 13.8 percent or 2.8 percentage points higher than for the United States and 3.1 percentage points higher than for the state of Indiana.”

Diversification

Northwest Indiana could try to reduce the gender pay gap by recruiting industries that employ a larger proportion of women, Pollack said.

“This includes high-paying service-based industries in the knowledge economy that have been growing in employment nationally. One example is the ‘professional, scientific, and technical services’ industry, which includes fields such as law, accounting, architecture, computer systems, management, advertising, and more,” he said.

Cities, towns and employers across the Region also could consider policies and programs that would keep households from “needing to make difficult decisions between family and careers,” Pollak said.

“Requiring paid family/maternity leave and increasing childcare tax credits allow households to support families without making as many career sacrifices,” he said. “In addition, policies that reduce poverty and increase income, such as raising the minimum wage and finding ways to reduce the cost of health care, provide more economic flexibility to families and will help narrow the gender pay gap.”

Macey said while the state government would most effectively address the issue, it also could be tackled locally. Large employers could for instance look at salary data to see if women make as much as male counterparts and take corrective action if they don’t, she said.

The pay gap tends to be less of an issue at unionized workplaces where there’s more pay transparency and often uniform wages, Macey said. But unions still could be proactive in closing the gender pay gap when they negotiate contracts.

“Since women are disproportionately serving in caregiving roles, you need to look beyond wages to benefits,” she said. “If you look beyond wages to benefits, women need things like paid sick days if they have a sick kid at home. They need paid time off and no fear they will lose their jobs. We need thinking that supports all of our workers.”

Entrepreneurship

One option for women to potentially boost earnings over the long term is to go into business for themselves.

Currently, there are about six female-owned firms per 100 females of working age versus 10 male-owned firms out of 100 working-age males, according to the U.S. Small Business Administration.

But that’s changing, according to Lorri Feldt, the regional director of the Northwest Indiana Small Business Development Center.

“Just under half of our NWI SBDC clients are female and we see a lot of local women interested in starting or who already are growing their own businesses,” she said. “In the short term, most people regardless of demographics take a hit in terms of pay and wealth when starting a business. I just met with a woman this morning whose business is a few months old and she has not yet drawn any money out for herself and has put more personal money in to meet payroll.”

The risk in entrepreneurship is much higher than holding down a steady, regular job, but it can eventually pay off if there’s a good opportunity to seize.

“I think the key is encouraging women and people in general to start businesses when they have a strong idea, plan and market opportunity,” she said. “The ones who really suffer are those who try to enter a very competitive market and do not have a strong value proposition. I'm always excited when I find a woman or anyone who has an innovative or technical or very targeted solution to a market need.”

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Business reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.