personal finance

Equal Pay Day: Single Moms Are Hit the Hardest by the Gender Pay Gap — and Custody Arrangements Can Matter


When single mom Lakeesha Brown got divorced six years ago, she opted to forgo child support and instead split custody of her two young daughters with her ex-husband.

It was the best decision she made, said Brown, 43, who lives in Farmington, Connecticut, with her kids, now 8 and 10.

"It was a leap of faith," she said.

The shared custody allowed Brown to grow her career and her income. She's now vice president of human resources at a substance use treatment center.

"I was able to move out of a job into something brand new that gave me license to be creative, to have more say, to work directly with the CEO," she said.

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Brown is fortunate. While full-time working women lag behind men in pay, making 82 cents for every $1 a man makes, mothers are even further behind. Moms earn 75 cents for every dollar paid to fathers and single mothers bring in 54 cents for every dollar earned by married men, according to the National Women's Law Center.

A recent survey shows custody arrangements have a bearing on what single mothers earn. Those with a 50/50 parenting schedule are 54% more likely to earn at least $100,000 a year than those whose kids are with them most of the time, according to the Single Mom Income and Time-Sharing Survey. It polled 2,270 single mothers in the U.S. during the summer of 2020.

"There is a lot of pressure on moms to be the primary parent," said the survey's author, Emma Johnson, founder of Wealthy Single Mommy, a website dedicated to single mothers. "That is our culture."

Jacalyn Shirley, with two of her three kids, had to adjust her work schedule to care for her children.
Jacalyn Shirley
Jacalyn Shirley, with two of her three kids, had to adjust her work schedule to care for her children.

Jacalyn Shirley, who lives in Ocean Beach, California, has custody of her three children 75% of the time. Shortly after the pandemic hit, the 36-year-old lost her job at a finance company. To make matters worse, when she was offered a job at a bank in June, she said had to turn it down due to lack of child care. Her children are 4, 6 and 14 years old.

In order to meet her kids' scheduling needs, Shirley started her own mortgage company. However, she can't devote herself to it full time and is making about 40% of her former salary.

"If I can work 80% of the time, I can bring myself up to 80% of that salary," Shirley said.

To overcome the pay gap, it is not just about equal pay, it is also about finding an equitable, financial situation for single moms whenever possible, said certified financial planner Marguerita Cheng, CEO and co-founder of Blue Ocean Global Wealth, based in Gaithersburg, Maryland.

Ideally, that should be done before the divorce is finalized. However, negotiations can be made along the way for more equitable parenting schedules that create flexibility for working moms. That can help give them time to devote to their career, return to school, take some professional development courses or network.

"Many single moms may be part time, or they may be solopreneurs, or freelancers," said Cheng, a member of the CNBC Financial Advisor Council.

"If a single mom happens to have full time employment, it's not just the paycheck she's collecting or receiving or earning," she added. "It is employer benefits, such as paid time off."

That may also include other safety nets such as health, disability and life insurance, as well as a retirement savings plan.

Flexibility with parenting may also give mothers more opportunity to increase part-time and freelance work.

In addition, Cheng advises single moms to focus on the long-term, not the short term, when dividing property in a split.

"What does it look like if I keep $100,000 worth of stock vs. 100,000 of cash?" she said. "What does it look like if I keep the house versus the retirement plans?"

"It doesn't mean they shouldn't keep the house but understanding, 'Ok, maybe I keep the house for the short term,'" Cheng added. "But I need to have a plan and understand the long-term implications of that.'"

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