Women and their employers can both work to combat gender wage gaps
Share Now on:
For every dollar that U.S. men make on average, women make about 80 cents, according to the U.S. Department of Labor. When you take race into account, the gap widens. Black women make 63 cents for every dollar white men make. Latinas make 54 cents.
The U.S. lags behind Iceland, Rwanda and Nicaragua when it comes to pay equity for women, according to a recent report from the World Economic Forum.
Why? More men work jobs in high-earning professions. But also, sometimes men simply get paid more for the same job.
Same Work, Less Money
In 1998, Guli Fager graduated from high school and landed a summer job as a lifeguard in her northern Virginia hometown. She learned that if she became a pool operator, she’d get paid more per hour — and work by herself. So she got her pool operator license and the new position.
“I loved working at a pool by myself,” Fager said. “Most of the time there weren’t very many people there, so I could hang out and read and get a tan.”
Later that summer, the company’s bosses hosted a boat party on Chesapeake Bay. For an 18-year-old, it was pretty epic. There she started chatting with a male co-worker, who had the exact job as her.
“It somehow came out that he was getting paid more,” Fager said. “We had exactly the same experience, exactly the same license, and he was getting paid $8 an hour, and I was getting paid $7.50.”
Furious at the matter, the teenage Fager sent her boss a letter demanding back pay so her wages would equal her male co-worker.
He wrote back agreeing to her terms.
“It’s the job of the employer to maximize their resources and pay you as little as they can get away with, that’s always going to be their priority,” Fager said. “Talking to your co-workers about money, it’s awkward, but it’s the only power that you have in the workplace.”
And Fager’s not alone. Recent research shows that women can appear to earn 80 percent to 90 percent of men’s wages in the same role.
“Women, for instance, tend to be less self-promoting than men, which may result in their losing out to males willing to make more self-aggrandizing claims to secure a top position,” Jonathan Webb writes for Forbes. “Similar claims are made about women’s reticence to assert their own interests, whereas it is much more socially acceptable for men to behave in nakedly self-interested fashion.”
Less pay on average
Catherine Berheide, professor of sociology at Skidmore College, studies the wage gap that runs through and across different industries. And then she found herself face-to-face with the issue.
“I first realized it when I became department chair, and when that happens, you actually get to see the salaries in your department,” Berheide said. “And I discovered I was making less money than my junior colleague.”
A man. Now, the wage gap is complicated — plenty of factors can influence how much a person makes, including their experience, their education and their certifications.
“If you think of college faculty, we all have the same educational backgrounds, there are so few people in that line of work who don’t have Ph.D.s,” Berheide said. “And then you still see there’s a wage gap.”
But women and men tend to work different kinds of jobs. According to the U.S. Bureau of Labor Statistics, women are disproportionately represented in education, office and administrative support and health care occupations. Jobs traditionally associated with men tend to pay better than jobs traditionally associated with women, even when they require similar levels of skill.
According to the American Association of University Women, increasing the number of women in traditionally male fields will likely improve wages for women, but it’s unlikely to fully eliminate pay gaps.
While becoming a parent is acknowledged as a personal choice that affects careers, it plays out differently for men and women. Women often face something known as the “motherhood penalty.” Women who are mothers make less money than women who are not, even when controlling for their years outside of the labor force, according to Berheide.
“Ironically, the wage gap is actually greatest at the top,” Berheide said. “Over time, a small difference will grow into a much larger one.”
And this has long-term effects. Since women are typically paid less than men, they will receive fewer benefits based on income, like Social Security, pensions and disability, than retired men.
What employers can do
In 2014, Gap Inc. became the first Fortune 500 company to announce that it pays women and men equally, on average, across its 135,000-person workforce at stores including Gap, Banana Republic and Old Navy. An outside agency found that Gap indeed paid men and women equally, controlling for relevant factors, with a focus on “equal pay for equal work.”
So Gap Inc. brought in Kellie McElhaney, a University of California, Berkeley, professor and director of the school’s Center for Gender, Equity & Leadership, to figure out how it happened.
“The first thing we found is that females in general at Gap, when they sat down at the negotiations table, just weren’t as good as some of the males,” McElhaney said. “They’d say, ‘Why don’t you go back to your desk and we’ll retry this negotiation tomorrow?'”
McElhaney found that there are five main factors that affected women’s pay: balancing domestic responsibilities, occupational segregation, employment in lower-level positions, psychological differences (lower self-esteem, less likely to negotiate, etc.) and discrimination or bias.
“If you think about pay equity, it is generally an outcome of a completely different phenomenon, which is confronting unconscious bias,” McElhaney said.
To combat this, McElhaney, said companies need to collect their data on pay and figure out how wages change based on one’s gender or race, and then collect stories about how gender has affected their experience in seeking pay.
“Annual salary is one metric of pay,” McElhaney said. “Let’s look at the bonuses, let’s look at the stock options, let’s look at equity. A lot of pay inequity is captured there.”
But McElhaney is clear about one thing — equal pay won’t be achieved just by looking at salaries. Companies need to focus on creating something else:
“Processes whereby you’re reducing unconscious bias,” McElhaney said. “Pay is the outcome.”
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.