- Women would have an additional $1.6 million in retirement income if they invested all of the money lost to the gender wage gap.
- Women also receive smaller annual Social Security payments than men.
- Some Democrats are renewing the push to shore up the "care economy" to address the wage gap.
The gender wage gap that plagues women during their working years also follows them into retirement, according to new analysis released Wednesday.
Government data show women earn an estimated 83 cents for every dollar earned by men. That adds up to a $10,435 gap in median wages every year. By the end of her career, a full-time working woman will have lost out on $417,400 of income.
The Center for American Progress, a left-leaning think tank, calculated how the missing wages could affect women's ability to save for retirement. Assuming a 6% annual rate of return, the group found that investing just 20% of those earnings could yield an additional $323,000 in retirement savings. If all of the money were invested, it would boost retirement income by $1.6 million.
"For so many women, this gender wage gap acts as virtual tax, making it so much more difficult to invest in their future," said Jennifer Klein, director of the White House Gender Policy Council, at a virtual conference organized by the think tank on Tuesday.
The numbers are even more dramatic for women of color. They face a larger wage gap, and lose out on even more potential savings.
The lifetime earnings loss for Black women is $976,800, according to CAP. The sum translates into as much as $3.8 million in potential retirement savings. For Hispanic women, missing wages total $1.2 million over their careers, which would end up costing them as much as $4.5 million in retirement.
The wage gap also means that women receive smaller Social Security checks than men. According to the Social Security Administration, the average annual benefit for men ages 65 and older was $17,374 in 2019. For women of the same age, it was $13,505 — a difference of 22 percent.
In addition, the agency estimates that women live longer, to an average of 86.5 years old compared to nearly 84 years for men.
"We get to old age, we get to retirement, and we've got women who are less prepared, and they're going to live longer," Betsey Stevenson, a public policy and economics professor at the University of Michigan, said at the conference.
Some signs suggest that the wage gap could shrink — or even disappear — among future generations. An analysis from Pew Research Center released this week found that young women in 22 cities, including New York and Washington, D.C., earn at least as much as men.
But Stevenson cautioned that the disparity in earnings tends to grow over time, especially as women have children. She called it "death by a thousand cuts."
"Maybe you're just a little bit delayed in getting that promotion, but that lasts your whole life," she said. "That's a whole lifetime of raises where you're one year behind."
In Washington, Democrats' attempts to address the wage gap by shoring up the so-called care economy have largely stalled. Instead, President Joe Biden's latest budget prioritizes fiscal responsibility, safety and security and domestic investments.
Though it calls for a significant increase in funding for low-income schools, it does not include the sweeping expansion of the social safety net that defined his previous proposals — leaving that debate for lawmakers.
House Assistant Speaker Katherine Clark, D-Mass., is circulating a letter to Biden calling on the administration to renew its push for child care investments, according to a copy obtained by CNBC. She is advocating for subsidies for low- and middle-income parents, expanded access to prekindergarten, higher wages for child care workers and support for child care centers.
So far, more than 70 members have signed on.
"It is clear that child care and early learning investments are an integral part of our nation's strategy for supporting a robust economy, lowering costs for families, and ensuring the long-term success of our children," the letter states.