The Wage Gap

Women have to work an extra 47 days to match male earnings

The wage gap, or the difference between what a woman earns per year versus her male counterparts, continues to plague the American workforce. Women constitute nearly half of all workers in the US. In half of homes with children, women are either the sole breadwinner or contribute to the household income. Women earn more college and graduate level degrees than their male peers. Despite these gains, according to the National Partnership for Women and Families, the median annual income for a woman employed in a full-time, year-round job is $41,554, while her male counterpart earns $51,640 – a gap of $10,086 per year, or 18 cents less per hour. Based on this estimate, it would take an extra 47 days of work for women to earn what men did in 2017. Let’s explore the issue and look at some of the possible causes and a potential bright point on the horizon.

Possible explanations

While it may be difficult to pinpoint the exact cause of gender pay gap in every case, there are overarching factors that may contribute to the discrepancy. These factors include gender discrimination, family caregiving responsibilities, and unequal access to higher paying or higher-level positions.

Of the 42 percent of women who reported in a 2017 Pew Research Center survey that they had experienced gender discrimination at work, the most commonly reported forms of discrimination focused around earnings inequality. A full 25% of women in the survey stated they have been paid less than a man doing the same job. Conversely, just five percent of men reported earning less than their female counterparts at the same job and only 22 percent had experienced gender-based discrimination in the workplace.

As the traditional bearers of family caregiving responsibilities, women are more likely to experience interruptions in their career paths that can have an impact on long-term earnings. Women consistently report that taking time off work for family duties has had a negative impact on their career or earnings. In fact, 25 percent of women reported that taking time off work for a birth or adoption negatively impacted their work prospects, compared to 13 percent of men.

Despite the fact that women outpace their male counterparts in attainment of college and graduate-level degrees, women continue to be overrepresented in lower-paying occupations and underrepresented in many occupations on the whole. Women constitute less than one in three chief executives and barely more than one in six software developers.

Even when women have attained jobs in higher-paying levels or sectors, they still earn less than men in the same fields. Women with master’s degrees are paid 73-cents on the dollar of their male counterparts. Women with doctoral degrees average less pay per year than men with master’s degrees; and women with master’s degrees earn less than men with bachelor’s degrees.

Race and ethnicity

In a recent article, the Institute for Women’s Policy Research laid bare the even greater wage gap between women of color or ethnicities other than white and their white male counterparts. While women of every major racial and ethnic group earn less than men of the same group, at the current rate of closure of the pay gap, black women will not have equal pay until 2124 and Hispanic women will have to wait until 2233 to earn the same amount as white men.

Hispanic workers on the whole have a lower median weekly earning rate than white, black, and Asian workers. Hispanic women earn barely more than 62-cents on the dollar of white male workers, and a little more than 87 percent of the earnings of Hispanic males. This relatively high percentage is the result of the low earnings of Hispanic men compared to white men.

Black women fair only slightly better than Hispanic women, earning an average of 67.7 percent of a white man’s income, and 92.5 percent of black men’s earnings. Again, the lesser disparity between black female and black male income is the result of overall low earnings for both genders in the black community.

Narrowing, but persists

The 18-cent gender pay gap among all workers in 2017 constitutes a 50 percent reduction in the 36-cent gap reported in 1980. The US Department of Labor reports that over the years, the wage gap has gotten smaller. In the past decade, however, progress has stalled.

Part of the explanation for the narrowing of the wage gap may be the gains that women have made in measurable factors that have historically thought to contribute to the gap. Women have made significant gains in educational attainment, work experience, and breaking down barriers to enter traditionally male dominated occupations.

Millennials may be the changing factor

The Pew Research Center analysis also reported that the gender pay gap is narrower among young adults than among workers overall. In fact, today’s youngest female workers are the first in modern history to start their working careers at near parity with men. This could be the beginning of significant trends and movements to permanently close the gap.

In 1980, women ages 25 to 34 earned 33 cents less per hour than their male counterparts. In 2017, that gap had dropped to 11 cents. This is the closest gap between men and women recorded by the Department of Labor or Pew Research Center.

Part of the reason for the narrowing of the gap by millennials may be their understanding of the causes of the gap and their drive to remedy those issues. In a 2014 Pew Research Center survey, 77 percent of women and 63 percent of men said that continued changes need to be made to give men and women equality in the workplace. Since millennials are more politically and socially engaged than other generations in the workplace, their drive and dedication to increasing diversity, equality, and reducing inequity may be the solution to the wage gap issue that many have been seeking.

The wage gap and Sheakley

Developing a strong culture of gender diversity and inclusion is essential to creating a workplace that respects and rewards employees for their dedication and the quality of their work, regardless of gender. Sheakley’s Human resources experts can help you look at your current hiring and pay practices to ensure that your company meets the needs of women in the workforce.

Get your free consultation with a Sheakley HR representative today and find out how we can help you develop policies and procedures to help you attract an increasingly socially aware workforce and that promote gender diversity. Stay up-to-date on all things Sheakley by subscribing to our blog and following us on social media. Join in the discussion by commenting below.