By Devin Simpson
Expanding the Earned Income and Child Tax credits is a key component of broader efforts to close the women’s wealth gap, according to a new video.
In “Closing the Women’s Wealth Gap,” Elena Chavez Quezada, co-founder of the Closing the Women’s Wealth Gap Initiative, and Robert Reich, former Secretary of Labor, present policy solutions to address the women’s wealth gap – the disparity between the amount of money owned by women and the amount owned by men.
On average, women own just 32 cents for every dollar owned by men. This disparity worsens for women of color, who own significantly less than both white men and women. The wealth gap is driven by income inequality. It results from factors such as women’s predominance in low-income or part-time service sector jobs that do not offer benefits, and is perpetuated by a lack of access to tax subsidies that would help them build wealth. Without adequate wealth, lower-income women are unable to save for unexpected emergencies or invest in a home or business – barriers that are often passed down to future generations.
Quezada and Reich recommend a broad range of strategies to address income and wealth inequality. In addition to pay equity, their video highlights family care policies that support working mothers such as paid family leave and affordable child care.
The video also urges policymakers to focus on savings and tax benefits to address the wealth gap. Increased access to retirement accounts and accounts with portable benefits will help more women prepare and save for the future, according to Quezada and Reich. As tax reform looms on the horizon, the two urge policymakers to prioritize a tax plan that benefits women and families, in part by expanding the Earned Income and Child Tax credits to help women keep more of what they’ve earned and invest in long-term financial stability.
To learn more about the women’s wealth gap, read Closing the Women’s Wealth Gap Initiative’s new report.