Although salary discrimination has been illegal in the US and most of the world for over half a century, the gap in earnings between men and women persists.
Today, women working full-time in the US make 83 cents for every dollar a man makes - and it will take about 132 more years to reach equality. Until then, the consequences of the gender wage gap will continue to impact women in all fields and industries, impairing the quality of their lives to retirement.
But what is the gender wage gap? What causes it and how exactly does it impact women’s lives and their careers?
And, most importantly, what can be done to reduce it?
This article is here to answer all those questions and more! Read on to learn:
- What Is the Gender Wage Gap And What Causes It?
- Gender Wage Gap - Fast Facts
- 7 Ways to Reduce the Gender Wage Gap
- 10 Gender Wage Gap Statistics
What Is the Gender Wage Gap?
The gender wage gap is the difference between the average earnings of men and women in the workforce. Specifically, the gender wage gap measures how much fewer earnings women make in comparison to men.
Analyzing data from the 2018 Census Bureau found that women of all races earned 82 cents for every $1 earned by men of all races. This calculation points to a gender wage gap of 16 cents.
That said, race, ethnicity, age, and motherhood impact the gender wage gap even more. This means that the gender wage gap is much larger for women of color, older women, and mothers. Ethnicity is also an important factor. For example, American Indian women make 60 cents on the dollar men make, while Native Hawaiian women make 63 cents on the dollar.
What Causes the Gender Wage Gap?
Various social and economic factors contribute to the gender wage gap, including gender discrimination, women’s unpaid responsibilities (i.e. childcare), and women’s over-representation in lower-paying positions.
Here are the most important gender wage gap causes to be aware of:
- Differences in industries/jobs worked. So-called “women’s jobs,” such as health aides and child care workers, typically offer lower pay and fewer benefits than male-dominated jobs (e.g. construction). These distinctions are true across all industries and professional levels, from frontline workers to senior-level executives.
- Differences in years of experience. Women tend to have less professional experience than men due to unpaid obligations (e.g. childcare). Although paid family or medical leave can motivate women to return to work, as of 2019 only 19% of workers in the USA had access to paid family leave through their employers.
- Discrimination. The Equal Pay Act of 1963 has deemed gender-based discrimination illegal, but that doesn’t mean it’s not a widespread practice - especially towards women of color. Gender-based wage discrimination is particularly prominent in work environments that discourage open discussions about wages or that make employees fear retaliation. Other than discriminating solely based on gender, employers may also decide to pay women less due to their previous wage history or compensation benefits. As a result, these wage decisions may end up following women from one job to another.
Race and the Wage Gap
In the US, women of color are impacted the most by the gender wage gap.
Hispanic women experienced the largest pay gap in 2022 according to the Center for American Progress (CAP) - 57 cents for every $1 earned by white, non-Hispanic men.
The same applies to Black women, who, despite having some of the highest labor force participation rates, still get only 64 cents for every dollar earned by white men. The gender wage gap average dips to 63 cents when multiracial Black women are also included in studies.
Not to mention, Black women also hold the nation’s biggest amount of student debt, which limits their economic abilities even further.
Overall, the gender wage gap for Black and Hispanic women is even wider than the existing gap between white, non-Hispanic women and their counterparts (79 cents per dollar).
Older Women and the Wage Gap
Age is another factor that widens the gender wage gap, with older female full-time workers experiencing a wider gap than younger female workers.
Specifically, the gap is widest for women aged between 55-64 years old. According to the US Census Bureau, in 2018 women workers in this age group made an average of 75% of what men make, as opposed to women aged 20 to 24, who made 89.1%, or women aged 35 to 44, who made 80.1%.
One of the reasons for the smaller wage gap among younger women is that more young women are going to university and getting into male-dominated fields.
Additionally, women are usually the child carers in a family, and taking parental leave later in their lives affects their salaries negatively.
Last but not least, basing salaries on employees’ wage history also exacerbates existing wage gaps over time. Companies often determine new hires’ salaries based on what the previous positions paid them and women, who are paid less than men on average, end up on the lower end of salary amounts.
Mothers and the Wage Gap
In addition to their professional obligations, women also typically have a lot of “unpaid” obligations (i.e. childbirth and childcare).
Women typically hold the majority of these obligations - which is why mothers are 40% more likely than men to report that childcare issues ruined their careers.
There’s more data to testify to this. For example, dads with jobs remain more likely to work full-time than mothers. Specifically, 96% of employed fathers worked full-time, compared with 78% of mothers.
The reason for this is that the majority of women report making job decisions based on childcare considerations, rather than on financial benefits or career aspirations alone. In a survey by the Center for American Progress, half of the respondents who were homemakers said they’d look for a job if they had access to affordable childcare.
Occupational segregation refers to the fact that male-dominated occupations are typically paid more than female-dominated ones. That’s also true for jobs requiring the same levels of education and skills.
What’s more, women make up two-thirds of all workers being paid the federal minimum wage ($7.50), although they make up half the entire workforce. What’s worse is that women of color are over-represented in those jobs.
For example, women outnumber men in teaching positions 3 to 1. In nursing, they outnumber men 8 to 1, according to the Institute for Women’s Policy Research.
Even when women do enter typically male-dominated fields, they tend to go into the lower-paying specialties. Take, for example, medical school graduates; women account for about half of them but are overly represented in pediatrics, gynecology, and obstetrics.
These happen to be among the lowest-paying specialties.
Gender Wage Gap: Fast Facts
So many social and economic circumstances impact the gender wage gap that you could be reading about the issue for days.
If you want to get the fast - and most important - facts, we’ve got you covered:
- According to the American Association of University Women (AAUW), 15 of the 20 highest-paying jobs are dominated by men. Meanwhile, 14 of the 20 lowest-paying jobs are dominated by women.
- Women working in the US make up 83% of what men do. Collectively, women lose out on more than $500 billion annually. Meanwhile, women between the ages of 55 to 64 make even less - 75% of what men make.
- The gender wage gap tends to be larger for women of color and the gap seems to keep widening. For example, compared to white, non-Hispanic men, Latinas make 55 cents on the dollar, black women make 63 cents a dollar, and Asian women make 87 cents a dollar.
- The industries with the smallest pay gaps are food workers, writers, counselors, pharmacists, and social workers, where women earn 97–99% of what men do. The largest gender wage gaps occur among financial services sales agents, financial managers, and financial advisers, where the pay ratio between women and men is between 61% and 66%.
- Women with children face an even wider pay gap than women without children. At the same time, women with bachelor’s degrees working full time are paid 26% less than their male counterparts.
- Women in retirement also face an income gap. That’s because they’ve earned less than their male counterparts over their lifetimes, paid less in the Social Security system, and, as a result, receive fewer benefits (two-thirds of men’s average).
- Retired women are two-thirds less likely to be receiving annuity and employer-based pension income.
7 Ways Legislators and Employers Can Reduce the Gender Wage Gap
The gender wage gap brings significant negative consequences to women’s lives and careers, including lowering their quality of life and work productivity.
As such, not acting to reduce the gender wage gap is harmful to both women and employers.
Here are some ways companies and legislators can reduce the gender wage gap in 2023:
- Creating equal-pay legislation. Comprehensive equal-pay legislation can improve existing laws and fight employers’ discriminatory practices (e.g. the Paycheck Fairness Act). Moreover, work-family policies are also important to combat the various factors that lead to the gender wage gap, such as access to paid sick days and paid family and medical leave programs.
- Raising the minimum wage. Women dominate the majority of the lowest-paying jobs. As such, raising the minimum wage can have a direct impact on bridging the gender wage gap and helping women out of poverty.
- Implementing fair scheduling practices. Unstable working schedules make arranging childcare or family time difficult and lead women to experience burnout; that’s especially true for women who primarily attend to these unpaid obligations. For example, several US states have implemented “fair workweek” laws to increase job flexibility and predictability for all employees. These practices can help narrow the gender wage gap by creating an accommodating work environment for working mothers.
- Increasing access to child care. Child care is so expensive that many mothers prefer to leave the workforce rather than stay at a minimum-wage job that barely covers childcare costs. As such, better access to affordable childcare can help keep more mothers working and, in turn, bridge the gender wage gap.
- Not basing employee pay on wage history. Asking new female hires about their salary history and basing their compensation on what previous jobs paid them can affect them negatively. Considering women are already more likely to make less than men, this practice can create a cycle of unequal pay from one job to another.
- Improving work-life balance. Women have more responsibilities outside of work (e.g. taking care of children or family duties), which makes it harder to strike a work-life balance. In turn, women end up working lower-paying, flexible, or part-time jobs. In the worst-case scenario, they even leave the workforce entirely. So, encouraging work-life balance as an employee can help attract and retain working mothers in the workplace.
- Increase pay transparency. Many employers discourage employees from sharing their salary information and nurture a culture of secrecy regarding pay transparency. But, not knowing what your peers are making can make it difficult to determine whether your compensation is fair. That’s why transparent pay practices can help narrow the gender wage gap - as much as 30%, according to the National Bureau of Economic Research.
10 Gender Wage Gap Statistics
The data behind the gender wage gap can help you put the issue into context.
Here are ten gender wage gap statistics that matter:
- According to a Pew Research Center analysis of median hourly earnings of both full- and part-time workers, women earned 84% of what men earned in 2020. Based on this estimate, it would take an extra 42 days of work for women to earn the same as men.
- The gender wage gap in 2020 was smaller for workers aged 25 to 34 than for all workers 16 and older. Women ages 25 to 34 earned an average of 93 cents for every dollar a man in the same age group earned.
- The 1980 36-cent gender wage gap is down to 16 cents in 2020.
- In a 2017 Pew Research Center survey, 42% of women said they had experienced gender discrimination at work, compared with 22% of men.
- One-in-four employed women (25%) said they earned less than men in the same profession; just 5% of men said they had earned less than a woman doing the same job.
- Mothers are twice as likely as fathers to say taking time off impacts their careers negatively. Specifically, 25% of women who took a leave from work in the two years after childbirth/adoption said this had a negative impact at work, compared with 13% of men.
- A 2019 survey showed mothers with children younger than 18 were more likely than fathers to say they needed to reduce their work hours.
- Out of 25 US cities, Los Angeles has the narrowest gender wage gap (9.4%). Detroit, on the other hand, has the widest wage gap (26.2%).
- The difference in earnings between women with children and those without is minimal. Working mothers only made $27 more compared to other working women in 2020.
- Data from a 2021 report showed that only a quarter of C-level executives are women. Meanwhile, women of color are even more underrepresented at the executive level, making up 4% of the C-suite.
Why does the gender wage gap matter?
The gender wage gap has far-reaching economic and social implications for women.
For example, the gender wage gap causes women to live in poverty later in their lives and hinders them from advancing their careers as far as men. Additionally, the gender wage gap negatively impacts women’s workplace motivation and work relationships.
Which country has the biggest and lowest gender wage gap?
Belgium is the country with the lowest gender wage gap as of 2020. The gender wage gap in Belgium is 3.79%. As for the country with the biggest gender wage gap, Korea leads with a 31.5% gender gap difference.
Does the gender wage gap take race into account?
Race is an important factor in the gender wage gap, as women of color suffer the most severe wage gap in the US.
So, for example, white women in the US are paid 82 cents per dollar a man makes, whereas Hispanic women make 54 cents, Native American women make 62 cents, and Asian American Pacific Islander women make 90 cents for each dollar a man makes.
What is the main reason for the gender wage gap?
Several social and economic factors cause the gender wage gap. The most important ones include that the majority of women work in lower-paying sectors, that women’s career choices are influenced by family responsibilities, and that, on average, women do more hours of unpaid work than men.
Can women close the wage gap by getting more education?
While it’s true that educational achievements have led to economic progress for women, the gender wage gap still exists for women who have the same education as men.
Even when adjusting the gender wage gap for education, major, and occupation, women still earn 92 cents for every dollar paid to men.
We just covered everything there is to know about the gender wage gap, including the most important statistics and some possible strategies to reduce it.
Here are the main points to remember:
- The gender wage gap is the difference between the average earnings between men and women in the workforce.
- Due to the gender wage gap, women earn less than men in their lifetimes, are less likely to advance their careers as far as men, and are more likely to live in poverty in old age.
- Some of the causes of the gender wage gap are differences in the industries men and women typically work, differences in years of experience, differences in work hours, and workplace discrimination.
- Women of color, older women, and mothers suffer an even wider gender gap than white, non-Hispanic women.
- Some ways to reduce the gender wage gap include creating more comprehensive equal pay legislation, raising the minimum wage, implementing fair scheduling practices, increasing access to childcare and pay transparency, and improving work-life balance.