What Is the Gender Wage Gap and Why Does It Exist?

In Slate, Hanna Rosin notes that the “77 cents on the dollar” claim comes from Bureau of Labor Statistics data. In essence, this holds that the median earnings of full-time female workers equates to 77 percent of the median earnings of full-time male workers. Stating that women make 77 percent of men’s wages “for doing the same work” implies that the two sexes have the same occupation and work the same hours but receive different salaries. There are several inaccuracies in this statement.

First, men tend to work more hours than women do. While a full-time week for a man can be 40 hours, it can equal 35 hours for a woman. Second, according to Rosin, it would be more accurate to compare weekly wages rather than annual wages. Doing so would remove variables such as time off taken during the year. A report by the American Association of University Women (AAUW), titled “The Simple Truth about the Gender Pay Gap,” cited U.S. Department of Labor data that revealed the 2012 pay gap with weekly earnings to be 19 percent. Third, industry and occupation are significant factors in determining wages. The AAUW report explained that part of the wage gap stems from the different college majors and post-college occupations that women and men pursue. For example, roughly 40 percent of women work in traditionally female jobs, such as nursing and teaching, while 45 percent of men work in traditionally male jobs, such as firefighting and computer programming. Professions in the latter category are generally better paid.

The Huffington Post, however, reports a few professions where women are better paid. These include medical science, operations research analysis, and even accounting. The differences are thin, but for interested women, online degrees for accounting are available.

The gap also varies by location and demographic. According to American Community Survey data, in 2012, the gender wage gap was smallest in Washington, D.C. at 10 percent and largest in Wyoming at 36 percent. The survey used median annual earnings for full-time, year-round workers when gathering data.

As for race, the AAUW compared 2012 median annual earnings of full-time female workers of various races with those of full-time white male workers and found the following wage proportions:

Gender Wage by Race and Ethnicity

As shown above, Asian American women experience the smallest earnings gap when compared to white men, but that gap is still a significant value of 13 percent.

Part of the Gap Remains Inexplicable

Due to the above variables, many people attribute the wage gap to simply being a result of women’s own choices (e.g., choosing a lower-paying career or working fewer hours). However, although accounting for all of these factors does narrow the wage gap, it does not eliminate it.

The Center for American Progress breaks down the oft-cited 23-cent gap to account for variables, according to 2007 data:

Reasons for the Gender Wage Gap

As the CAP depicts, a large portion of the wage gap – equivalent to more than 10 cents per dollar, or $4,465 per year, is “unexplained.” Potential reasons may include a lower likelihood among women to negotiate for higher pay or unintentional or perhaps even intentional gender discrimination.

Women with children can be especially prone to gender discrimination in salary. The AAUW states that according to experimental research, employers are more likely to hire a woman without a child than a woman with one. Even when a mother is offered a position, the employer offers her a lower salary than is offered to other women. Fathers, on the other hand, are not subject to this bias.

Additionally, while women’s increased access to higher education does help reduce the gap, inequality still exists within this one variable. According to the CAP, Women generally need a higher degree to attain the same lifetime earnings as men with a lower degree. For example, a woman with a doctorate degree would earn the same as a man with a bachelor’s degree. The BLS breaks down the gender wage gap by education level, using 2012 median weekly earnings:

Gender Wage Gap According to Education

As shown by the above data, while educational attainment does make a sizable difference in earnings, the wage gap is still large at every level.

The AAUW further segments the gap in “Graduating to a Pay Gap” by factoring in college major, hours worked per week, type of undergraduate institution, institution selectivity, GPA, marital status, months employed after graduation, and geographical region. One year after graduating college, male and female workers still experienced an unexplained 7 percent earnings gap.

It’s Not Getting Any Better

The Institute for Women’s Policy Research showed that the 77 percent gap has stayed pretty constant since 2007. If this country continues to move at the current pace, the gender wage gap won’t close until 2058, meaning most of today’s working women won’t see wage parity during their career. Since there has been little movement on the issue over the past several years, taking action to decrease the gap in an especially important task today.

What Can We Do?

What can women do if they discover that they’re a victim of gender discrimination in wages? The AAUW notes in “The Simple Truth about the Gender Pay Gap” that a few important steps to take:

  • Putting everything in writing to have a timeline and record to support their claim
  • Speaking to a lawyer with experience in the subject
  • Acting quickly, as there is a statute of limitations on filing claims

Eliminating wage discrimination altogether would require a collaborative effort by individuals, employers, and lawmakers. To avoid a lifetime of low pay, women should negotiate for higher wages. A low salary at the start of one’s career could translate into a lower compensation and smaller retirement benefits throughout one’s career, as raises and benefits are often based on that initial salary.

Employers can do their part by conducting audits to detect and abolish pay discrepancies. Wage discrimination is not only illegal, but it can also hurt the company’s bottom line. Working for an employer who pays fairly improves employees’ morale and increases their chances of giving their all to the job.

The fight is far from over and the story more nuanced than many realize. Effective legislation is crucial. While we have made progress with 1963’s Equal Pay Act and 2009’s Lilly Ledbetter Fair Pay Act, there is still more work to be done on multiple fronts including the law, the public awareness, and the culture of the U.S.

Sources:

“Gender Wage Gap Projected to Close in Year 2058: Most Women Working Today Will Not See Equal Pay during their Working Lives,” Institute for Women’s Policy Research, September 2013, iwpr.org/publications/pubs/gender-wage-gap-projected-to-close-in-year-2058-most-women-working-today-will-not-see-equal-pay-during-their-working-lives

“Graduating to a Pay Gap: The Earnings of Women and Men One Year after College Graduation,” American Association of University Women, February 2013, aauw.org/files/2013/02/graduating-to-a-pay-gap-the-earnings-of-women-and-men-one-year-after-college-graduation.pdf

“The Gender Wage Gap Lie,” Slate Magazine, Hanna Rosin, August 30, 2013, slate.com/articles/double_x/doublex/2013/08/gender_pay_gap_the_familiar_line_that_women_make_77_cents_to_every_man_s.html

“The Simple Truth about the Gender Pay Gap,” American Association of University Women, March 2013, aauw.org/files/2013/03/The-Simple-Truth-Fall-2013.pdf

“What Causes the Gender Wage Gap?” Center for American Progress, Jane Farrell and Sarah Jane Glynn, April 9, 2013, americanprogress.org/issues/labor/news/2013/04/09/59658/what-causes-the-gender-wage-gap/

“7 Jobs Where Women Actually Get Paid More Than Men,” The Huffington Post, April 23, 2013, huffingtonpost.com/2013/04/23/women-paid-more-than-men-jobs_n_3110432.html

As shown above, Asian American women experience the smallest earnings gap when compared to white men, but that gap is still a significant value of 13 percent. Part of the Gap Remains Inexplicable Due to the above variables, many people attribute the wage gap to simply being a result of women’s own choices (e.g., choosing a lower-paying career or working fewer hours). However, although accounting for all of these factors does narrow the wage gap, it does not eliminate it.  The Center for American Progress breaks down the oft-cited 23-cent gap to account for variables, according to 2007 data:

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