K-shaped economy puts pressure on women, as lower pay and higher costs reduce spending

The Labor Department reported on Friday that 92,000 jobs were lost in February, as the unemployment rate rose to 4.4%.

The unemployment rate for women held steady at 4.1% for the first two months of the year, according to the latest data from the Bureau of Labor Statistics. Still, the sharp rise in the number of Hispanic or Latina women and Black women who are out of work is profound, experts say, with their unemployment rates rising to 5% and 7.1%.

A significant pay disparity for women, and especially women of color, also has an impact on the widening divide between high-earners and low- and middle-income Americans in the so-called “K-shaped” economy. 

“The wage gap for women is 81 cents for every dollar a man makes, but it’s especially wide for women of color — 65 cents for Black women, 58 cents for Latina women and also 58 cents for Native [American] women,” said Vasu Reddy, director of state policy for workplace justice at the National Women’s Law Center, a nonprofit that advocates for women’s legal rights.

As a result, “women’s spending power is reduced,” she said. “What you can afford is determined directly by your wages.”

In 2025, women joined the U.S. labor market and added jobs at nearly three times the rate of men last year, reversing a trend from the past three years, according to a new report by the Bank of America Institute. The additions were driven by an increase in jobs in private education and health care, where women hold 77% of those jobs, the analysis showed.

Yet these job gains have not translated into greater pay, experts say. 

“This is a phenomenon that we call occupational segregation,” Reddy said. “Women disproportionately hold the lowest-paying jobs, and so, you know, are driven to those careers and driven out of male-dominated careers, and then those women-dominated professions are paid less.”

With fewer open roles, wage increases for men and women have also fallen. The so-called “job-change premium” — that extra pay boost that workers typically get when they switch jobs — has declined, the Bank of America Institute analysis shows. Women’s pay raises are less than half of what they were in 2019.

Certified financial planner Gloria Garcia Cisneros, a wealth manager at LourdMurray in Los Angeles, said it’s important for women to advocate for themselves in pay negotiations and regularly review their compensation.

“Salary negotiations are key drivers, especially when you’re looking at switching careers or switching companies; that’s when you have the most leverage,” said Cisneros, who is also a member of the CNBC Financial Advisor Council. “Even if you’re staying within a company, you should be on Indeed, you should be on LinkedIn. You should be seeing what the market rate is for your work.”

Stronger income growth can drive financial stability for women, yet weaker employment and wages weigh on spending, experts say. In analyzing about 70 million consumer and business accounts, Bank of America Institute researchers found that women’s spending is starting to slow down. 

“Women are really driving more of the trading down, especially when it comes to clothes shopping,” said Bank of America Institute economist Taylor Bowley. “That’s one of the areas where we’ve seen that they’ve become even more selective as some of those income constraints become a little bit more pinched.”

Affordability pressures and the pay squeeze have also led more women than men to seek value when buying groceries, dining out and traveling, she said. 

Women are more often responsible for child care and elder caregiving, which may also exacerbate pay and spending gaps with men. 

“That spending disproportionately impacts women, not only when it comes to the budget they’re allocating, but also their decisions to participate in the labor force,” Bowley said. “When we think about all of these pressures really consolidating, it certainly impacts women’s decisions.”

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