Everything you need to know about the wage gap and how to defend it when people tell you it’s not real
If you Google “Wage Gap” the first thing that populates is “Wage Gap Myth”. No, the wage gap is not a myth, it is a calculation. The number most frequently cited is that women earn between 77 – 79 cents to 1 dollar a man earns. This is calculated by dividing the national median income of all full time, year round working women by the national median income of all full time, year round working men. This doesn’t mean that across the board each individual woman makes exactly 79 cents for every dollar that a man makes, in many circumstances it is actually much lower (if you’re older, black, Latina, highly educated, work in tech, a mother, live in Louisiana, the list goes on…).
But this statistic is significant when you consider that women are employed at the same rate, educated to the same level and often responsible for the same earnings in their families as men.
The wage gap has really only been calculated since the 1960s, back then women earned roughly 59 cents to every dollar a man earned. The twenty cent improvement since then is significant, thanks in large part to the Equal Pay Act of 1963 and the increasing number of women taking paid jobs outside the home. But in the last 15 years, progress has stagnated. Depending on who you ask (i.e. how you calculate it and with what projections) it will take anywhere between 44 years and 170 years before we close the gap and women have true pay equity.
The wage gap can be broken down further by focusing on specific factors. For example, where you live is significant, your education level, the industry you work in, your marital status, your age, your race or ethnic background. You can break out the data by each of these categories to see how it contributes, but the sad truth is that almost across the board women earn less – approximately 3% of women workers earn more than their male counterparts – cheers to female respiratory therapists. Sometimes slightly less, sometimes way less, but basically always less. A recent Glassdoor study showed that even when you isolate for all variable factors (take women with the exact same career, race, background, education, age, etc, as men) women earn 94.6% of what men earn, so at least 25% of the pay gap has no identifiable explanation (cough, cough, discrimination, cough).
How is the wage gap still a thing?
One of the main causes of the wage gap is the type of jobs and industries that men and women predominantly work in. Men are disproportionately represented in higher paying jobs, engineering, tech and business, while women represent the majority of teachers, administrators and nurses. This begins with tracking and gender norms from a young age and continues with a social agreement on which industries are valued higher and therefore paid more. But even when you control for this and compare jobs with similar education and training levels, we still see evidence of a wage gap in industries dominated by men vs women. For example, housekeepers get paid less than janitors, they have the same education and experience level, and share largely the same work, but housekeepers are majority female while janitors are almost exclusively male. Higher paying jobs, both by industry and by title, go to men, while low paying, lower title jobs are filled by a majority of women. As an example, almost three-quarters of American CEOs are men, almost three-quarters of American cashiers are women. This basic difference, the types of jobs men and women are generally in, accounts for almost 50% of the wage gap.
Beyond that, in careers that attract men and women roughly equally, for example law or accounting, women are paid significantly less than men for the same positions, and this gets worse throughout their careers. Entry level positions have better pay equity, but as time passes women are promoted less than their male counterparts, given smaller raises and bonuses, and often lose out on pay and promotions due to maternity and family care responsibilities. Statistics show that females working in tech, accounting, law and medicine are often earning closer to 70 cents to the dollar of their male colleagues for the exact same roles, or as low at 60 cents to the dollar for women working in property and real estate.
This matters. For the obvious reasons that discrimination and biases are bad, but it’s bigger than that. Women today are more likely to be the primary or sole breadwinners for their households (compared to 50 years ago), women are often the primary care takers for family members and children, and a lifetime of lower earnings leads to significantly lower social security and retirement benefits. So, even when women stop working they are earning less. There is a lifetime of repercussions not just for the individual woman, but for her family as well.
On a larger scale, the financial implications for our society as a whole are huge. As a nation, if we had gender parity in income we would add almost 450 billion dollars to our GDP annually, that is a 2.9 percent bump in GDP. Not only that, the poverty rate for working women would be cut in half (8.1% to 3.9%), improving quality of life for millions of women and decreasing the economic burden on government and social services.
So how do we fix it?
The good news is, it’s not impossible. At the individual, business and government levels efforts are being made to close the wage gap, improve working conditions for women and get more women into leadership positions and male dominated industries.
At the government level, there are federal and state laws that impact wages and working conditions for women. President Obama passed the Lilly Ledbetter Fair Pay Act in 2009, which fundamentally recognizes the reality of wage discrimination, overturns a supreme court ruling which restricted the time period for filing complaints, and is aimed at preventing sex-based wage discrimination for people who perform the same jobs defined by skill, effort and responsibility. This is great, but there is a more that can and needs to be done both at the federal and state level. Policy measures such as requiring paid family leave and increasing the minimum wage would make huge strides in closing the wage gap. Check the sites below to learn more about what is being done on the state level.
At a business and institutional level there is increasing awareness of the need to encourage and support women to move into more diverse industries, and of the need in all industries to promote women to higher level, and higher paid positions. Starting with schools and educators at all levels, there is a need to challenge gender-based career norms, for example encouraging girls to go into STEM programs or coding. And all companies need to commit to promoting women at the same rate as men, ensure that there are women on their boards and in senior leadership roles, provide training and mentorship to women, and create working environments and flexible policies so women feel safe and supported. Many companies are publicly coming forward to support these issues, for example by signing on to the Equal Pay Pledge, and we need to encourage and hold them accountable.
And as a society we need to confront our gender biases, both implicit and explicit. There are countless way to attack this, and we are open to them all, but at Ladies Get Paid we believe that one of the best ways to do that is by getting more women into leadership positions. By seeing more diversity in all industries and at all levels we can work to confront our cultural biases and normalize the idea of powerful, well paid, well educated, working women. By coming together as a group, sharing experiences and resources, supporting and validating each other, and encouraging one another to aim big, we are individually and collectively making our moves to close the wage gap and ensure that women get the respect and opportunities that we deserve.
If you want to learn more:
Institute for Women’s Policy Research
Center for American Progress – Explaining the Gender Wage Gap
American Association of University Women
Status of Women in the States
Pathways to equity
National Association of Professional Women
White House – Recent Legislation