Yes, The Wage Gap Is Real: Here’s How To Understand It

Discrimination isn’t the main reason women make less, but it can’t be ruled out, either.

June 29, 2018
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You probably haven’t given much thought to the year 2059, but you might want to mark your calendar: That’s when experts predict women will finally reach pay equity with men. That’s right—just another 41 years(!) until the wage gap gets closed if things keep going the way they’ve been going.

Not so keen about making less money than guys at the end of the workweek? Neither are we.

But here’s the deal: It’s not that employers fundamentally hate women (although discrimination does play a role in lower salaries), or that the government puts some random tax on women’s earnings just because (but the caretaking roles women are expected to play in society do put us at a salary disadvantage compared with our male counterparts). The wage gap is a nuanced issue that requires a lot of unpacking, and even the experts don’t completely agree on what’s causing it.

So, let’s tackle our understanding of the wage gap head on. HealthyWay sat down with Deborah Vagins, senior vice president of public policy and research at the American Association of University Women (AAUW), and Julie Anderson, senior research associate at the Institute for Women’s Policy Research (IWPR), to get some answers about what’s causing the wage gap and what women can do about it.

We also dug up some rage-inducing statistics that show just how bad the wage gap really is. Here’s what we learned.

What is the wage gap?

You’ve probably already heard the statistic that women, on average, make about 80 cents for every dollar earned by a man. So does that mean if you compared your paycheck with that of your male colleague, you’d discover that you earned 20 percent less than him (even if everything else is equal)?

It’s certainly possible, but that’s not exactly what recognizing and addressing the gender pay gap is getting at.

“When we talk about the wage gap, we’re not usually talking about people doing the same job,” explains Anderson. “That’s actually a tricky analysis because there are lots of reasons to be paid differently, including years of experience, education, and performance.”

The wage gap actually refers to something much broader. It looks at the median salaries of all people working full-time, year-round, in every field, and divides the amount women make by the wages of men to determine the difference. Some women fare better than others, depending on their race, age, location, level of education, and profession, but across the board, women consistently make less than men.

Countless statistics show that the wage gap is not a myth.

The wage gap widens for women of color.

As if the discrepancy between a woman’s 80 cents and a man’s dollar wasn’t bad enough, the wage gap gets much wider when you break it down by race and ethnicity. According to a report on the gender pay gap from the AAUW, black and African American women miss out on 37 cents per dollar compared with the guys. That missed income adds up really fast.

“Quite frankly, history has a lot to do with it,” Anderson notes. “For example, even though black women have been in the labor force for much longer than other groups of women, their pay rates are much lower than white women’s. Black women are getting higher levels of education, but we’re not seeing that translate into higher earnings overall.”

Countless statistics show that the wage gap is not a myth.

The wage gap gets even worse for other groups of women. According to that same AAUW report, Native Hawaiians and Pacific Islanders earn only 59 percent of what white men earn, the paychecks of American Indians and Alaska Natives are 57 percent of white men’s earnings, and Hispanic and Latina women face the widest wage gap, taking home just 54 percent of what white male workers do. What gives?

“People in these marginalized communities often don’t have as many opportunities for decent-paying jobs and education,” Anderson says. “There are many, many factors that contribute to it, no matter how you look at it. When you have multiple forms of identity that can be exploited or marginalized, you see a larger wage gap.

Clearly, the wage gap compounds when you’ve got multiple systemic issues working against you.

Is discrimination to blame for the wage gap?

It seems like a no-brainer: Women make less money than men because of discrimination, right? The experts say that bias against women definitely plays a role in the wage gap, but they have yet to come to a consensus as to just how much discrimination affects the wage gap overall.

“There are lots of factors that contribute to the overall wage gap,” Vagins says. “Obviously, there are a lot of women predominantly working in female-dominated industries, which tend to pay less, so occupation factors in. And then there’s the fact that women face a motherhood penalty and they may be primary caretakers, for which there’s a penalty in pay. These factors are all related to bias. But even when you control for a variety of factors, there’s still a gap in pay that’s left unexplained, and we attribute that to discrimination in the workforce.”

While you can find evidence of discrimination in many statistics related to the wage gap, the problem might be best illustrated by the salaries of recent college graduates. Presumably, men and women should be earning similar wages right after college, when factors like experience and family caretaking responsibilities have yet to come into play for most young adults. But in a report aptly named “Graduating to a Pay Gap,” the AAUW found that women working full time earned only 82 percent of what their male peers were taking home just one year out of college. Why?

Researchers were able to attribute some of the wage gap to college majors (men tended to study subjects that led to jobs in higher-paying fields) and number of hours worked (women reported working about two hours less per week than men, but still more than the traditional 40-hour workweek). But even when adjusted for those factors, there was still a 7 percent difference in the amount women made compared to men.

Experts point to gender discrimination as one potential reason for this unexplained part of the wage gap.

Are women just choosing lower-paying jobs?

Generally speaking, dentists make more than flight attendants, architects command higher salaries than teachers, and investment bankers take home bigger paychecks than graphic designers. And there are very valid reasons for those pay differences. But are women making less because they’re choosing to invest their efforts in lower-paying fields?

“Occupations overwhelmingly done by women tend to be lower paying, while the occupations overwhelmingly done by men tend to be higher paying,” says Anderson. “Until that breaks down and women can move into higher paying fields that traditionally employ men, it’ll be hard to make big progress on closing the wage gap.”

“When you have multiple forms of identity that can be exploited or marginalized, you see a larger wage gap.

—Julie Anderson

In other words, work done by women just isn’t rewarded quite as lucratively as work done by men. And the problem is that even when women start to move into those higher paying fields in large numbers, they still can’t close the wage gap. One of the most thorough studies related to the wage gap, which looked at 50 years of U.S. census data, found that when the proportion of women increased in particular fields, the salaries for those jobs dropped.

Paula England, professor of sociology at New York University and co-author of the report, told The New York Times, “It’s not that women are always picking lesser things in terms of skill and importance. It’s just that the employers are deciding to pay it less.”

Taking care of your family is another factor in the wage gap.

Is taking care of your family a choice? Depends on who you ask.

Some women spend years planning to have a child, while others are completely surprised when they find out they’re pregnant. And as aging relatives lose their independence, the burden of managing their care frequently falls upon women’s shoulders, whether or not they anticipated or chose to have that responsibility. These commitments take up time and effort that might otherwise be devoted to a career.

But the one factor that’s decidedly not a choice is the lower pay that women end up with after they take on the role of caretaker, which feeds into the wage gap.

“The system is still predominantly built around having women as caretakers,” Vagins explains. Case in point: There are not currently any federal requirements for paid sick leave, paid family medical leave, or paid maternity leave on the books.

The lack of caretaking benefits for women can put them in a position of temporarily giving up a paycheck if they need to attend to the needs of their children and relatives, which obviously impacts women’s wages in the short-term.

But the opportunity cost of prioritizing family over career goes on to widen the wage gap throughout women’s careers. A new mom might have missed out on important client face time, a big work trip, or other career opportunities that were given to someone else on staff. That means she might be passed over for formal recognition in the form of promotions and pay bumps that can go on for years to come. And when you consider that pay increases and bonuses tend to be based on a percentage of your current income, the effect of the wage gap continues to grow over time.

“Employers may pay women less because they have caregiver responsibilities, but it’s actually the opposite for men,” says Vagins. “They tend to experience a fatherhood bonus and make more money once they become dads. It’s that old-fashioned assumption that men are the breadwinners of the family.”

The fact is, moms have it tough at work. Employers are more reluctant to hire mothers (regardless of whether or not they ever left the workforce). And women also tend to shift what it is they’re looking for in a job once they have caretaking responsibilities. The roles that fit their need for flexibility (say, to pick up a kid from daycare or take an aging parent to a doctor’s appointment) tend to pay less.

For example, a woman who was once working at a large law firm may move to a smaller firm with a different workload after she has a baby. She might be looking for a firm that allows her some flexibility in terms of when she does her work, which will allow her to balance her family responsibilities. She might still be working the same number of hours and performing tasks equally as difficult as those at the first job, but because the new position has that flexibility benefit, it tends to pay less.

It’s not that women are always picking lesser things in terms of skill and importance. It’s just that the employers are deciding to pay it less.”

—Paula England

Men, on the other hand, tend to stick it out at high-paying jobs with traditional working hours, even after becoming fathers.

Our society has yet to place a dollar value on flexible work arrangements, so it manifests as a deficit in women’s pay. And it’s quite possibly the most compelling explanation for the wage gap, says Claudia Goldin, an economics professor at Harvard University, who has spent years studying gender economics. She dove deep into this subject, which she calls “temporal flexibility,” on an episode of the Freakonomics podcast that anyone who’s interested in the wage gap should definitely listen to.

So what can we do about the wage gap?

Make no mistake—the responsibility of fixing the wage gap isn’t on your shoulders. Vagins and Anderson both emphasize that this is a problem that needs to be addressed by policy-makers and employers. But if you feel compelled to take action on this important issue, here are some things you can do:

Talk pay with your colleagues. It’s tough to know what you deserve to be paid without context. Breaking the taboo on financial discussions is critical to fighting the wage gap.

Brush up on your negotiating skills, so you can more effectively request fair pay. The AAUW is on a mission to train 10 million women to negotiate by 2022. Become one of them by signing up for a salary negotiation workshop in person or online.

Connect with women who get it. Ladies Get Paid is an organization dedicated to ending the gender wage gap by providing education and community for women around the world. (They were recently sued by angry dudes for their work.) As a member of LGP, you can attend workshops, webinars, and meetups.

Get politically active. There are at least three federal bills (The Paycheck Fairness Act, the Pay Equity for All Act, and the Fair Pay Act) that aim to take action against the wage gap. The AAUW can help you urge your representatives to support these bills using a simple form that takes about 20 seconds to send. Do it now!

Fight at the state level as well. “This is particularly important right now because a lot of federal bills are stalled in Congress. Contact your state legislators to advocate for change,” Vagins recommends.

Tell others about the wage gap. Talking the wage gap in person and on social media can spread the word and build momentum toward a better future—where we all get paid what we deserve.

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