'Motherhood Penalty' Adds Up for Working Mothers
NATIONAL REPORT — While the Bureau of Labor's latest statistics show at least 75% of women participating in the workforce during their prime working years, the so-called "motherhood penalty" is still acting as a drag on women's earning potential, with the effects adding up over time.
With women disproportionately more likely than men to assume caregiving responsibilities and household labor, a new report from Bankrate, based on an analysis of the Census Bureau’s Current Population Survey (CPS), found mothers earned 31% less in wages than fathers in 2023, while both childless women and men have a still-present but much smaller gap in earnings.
The report found those lost wages can compound, adding up to roughly half a million dollars for mothers over a 30-year career, even assuming her earnings remain the same. Women can then further find it more difficult than their male counterparts to save money, pay down debt or invest for retirement over the long term.
In comparison, there is no parallel fatherhood penalty, with full-time working fathers with children under 18 making roughly 23% more than full-time working men with no children the same age.
Bankrate additionally found full-time working mothers with children under 18 are more likely than fathers to say money (53%), parenting (36%) and chores/household obligations (29%) negatively affect their mental health.
Yana Rodgers, faculty director of the Center for Women and Work at Rutgers University, also pointed to some of the more invisible decisions mothers may make that ultimately end up depressing wages, such as women taking on lower-paying jobs in the first place that may offer more flexibility to working parents but won't meet their financial goals.
[Read more: Organizations Need to Shift Support for Working Caregivers]
"Why are they doing that? It's mainly because we still have an uneven distribution of care work that's being done in the home, where women do more care work than men," she said. "Sometimes women exit the labor market completely."
Bankrate did find some avenues for women to help alleviate a potential motherhood penalty, though it may not address all issues stemming from such a wide ranging problem. Among other things, it recommended mothers, if they can:
Assign a "job" to every dollar earned to help track financial goals.
Save the percentage that's matched by their employers in a 401(k).
Divide savings funds into different accounts for different purposes.
Always negotiate salary and benefits when offered a new position.
A full analysis of the CPS findings, along with greater detail from Bankrate's report, can be found here.
