The Wage Gap: The Who, How, Why, and What to Do

NATIONAL FACT SHEET | SEPTEMBER 2019 WORKPLACE JUSTICE THE WAGE GAP: THE WHO, HOW, WHY, AND WHAT TO DO Women in the U.S. who work full time, year round are typically paid only 82 cents for every dollar paid to their male counterparts.1 This gap in earnings translates into $10,194 less per year in median earnings, leaving women and their families shortchanged. Although enforcement of the Equal Pay Act and civil rights laws, as well as other progress for women, including increased access to reproductive health care, have helped narrow the gender wage gap over time, addressing the significant pay disparities that remain is critical for the economic security of women and their families. Equal Pay is Crucial for All Women Women of color are paid less than white, non-Hispanic men. • Black women working full time, year round typically make only 62 cents for every dollar paid to their white, non-Hispanic male counterparts. • For Latinas this figure is only 54 cents, for Native Hawaiian and Pacific Islander women it is 61 cents, and for Native women it is 57 cents.3 • While Asian women working full time, year round are typically paid 90 cents for every dollar paid to their white, non-Hispanic male counterparts, the wage gap is substantially larger for some subgroups of Asian women.4 • The wage gap translates into an annual median loss of $23,540 for Black women, $28,036 for Latinas, $24,443 for Native women, and $6,007 for Asian women.5 Closing the wage gap is, therefore, particularly important for Black, Latina, and Native women who tend to have lower incomes than white, non-Hispanic women and Asian women, and are more likely to be in poverty. NOTES What closing the wage gap would mean to me this year:2 • Three months’ supply of groceries $1,935.30 • Three months’ child care payments $2,450.50 • Three months’ rent $2,547.00 Mothers are paid less than fathers. • • Three months’ health insurance premiums $1,810.33 • Four months’ student loan payments $1,088.00 • Seven tanks of gas $345.10 Total: $10,194.00 Mothers who work full time, year round typically have lower earnings than fathers ($41,000 compared to $59,000): mothers are typically paid only 69 cents for every dollar paid to fathers.6 Mothers of every race are typically paid less than white, non-Hispanic fathers.7 Women are affected by the wage gap as soon as they enter the labor force and the gap continues to expand over the course of a woman’s career. • The wage gap is smaller for younger women than older women, but it begins right when women enter the labor WORKPLACE JUSTICE | PAGE 1 force. Women ages 15 to 24 working full time, year round are typically paid 88 cents for every dollar their male counterparts are paid. • Among workers with a Bachelor’s degree or higher, women typically make 75 cents for every dollar men make.16 • Among older women the gap is larger. Women ages 45 to 64 working full time, year round are typically paid only 80 cents for every dollar their male counterparts are paid. • • For women still working at age 65 or older the figure is 76 cents.8 Even when women earn a Bachelor’s degree, they still make less than what men with an Associate’s degree make ($56,680 and $56,719, respectively)— and men with only a high school degree but no college education typically make more than women with an Associate’s degree ($45,579 and $41,485, respectively).17 Older women also experience a wage gap in retirement income, due in large part to the wage gap they experienced during their working years. • • Based on today’s wage gap, a woman who works full time, year round stands to lose $407,760 over a 40-year career.9 This woman would have to work nine years longer than her male counterpart to make up this lifetime wage gap. These lost wages severely reduce women’s ability to save for retirement and threaten their economic security later in life. As a result of lower lifetime earnings and different work patterns, the average Social Security retired worker benefit for women 65 and older was about $15,780 per year in December 2018, compared to $19,766 for men of the same age.10 Lesbian women make less than men, regardless of their sexual orientation. • According to the most recent analysis available, women in same-sex couples have a median personal income of $38,000, compared to $47,000 for men in same-sex couples and $48,000 for men in different-sex couples.11 Women in nearly every occupation face a wage gap. • There is a gender wage gap in 97 percent of occupations.18 • Even workers in low-wage occupations face a wage gap: based on the most recent year of data women who work full time, year round in the 40 lowest-paying occupations typically make only 82 percent of what men working in those same occupations make.19 Causes of the Wage Gap Despite the fact that women have made enormous gains in educational attainment and labor force involvement in the last several decades—gains which have helped close the wage gap over time20 —unequal pay remains pervasive. Below are some of the reasons why. Women are paid less for the same work. •  umerous research studies show that compared to N men, women are less likely to be hired, particularly for high-wage jobs, and are likely to be offered lower salaries when they are hired.21 For example, one experiment revealed that when presented with identical resumes, one with the name John and one with the name Jennifer, science professors offered the male applicant for a lab manager position a salary of nearly $4,000 more, as well as additional career mentoring, and judged him to be significantly more competent and hirable.22 • Recent research reveals that even controlling for race, region, unionization status, education, work experience, occupation, and industry leaves 38 percent of the pay gap “unexplained.”23 Discrimination is thought to be a major cause of this unexplained gap. Transgender women make less after they transition. • One study found that the average earnings of transgender women workers fall by nearly one-third after transition.12 Women with disabilities also experience a wage gap. • • Women with disabilities working full time, year round are typically paid just 80 cents when compared to their male counterparts with disabilities.13 Under the Fair Labor Standards Act employers may pay people with disabilities below the minimum wage, further depressing wages for women with disabilities.14 Women at all education levels experience a wage gap. • Among full time, year round workers, women who started, but did not finish high school, make 71 cents for every dollar their male counterparts make.15 • Women with only high school diplomas working full time, year round are typically paid only 72 cents for every dollar paid to their male counterparts. Pay secrecy policies help perpetuate pay disparities. •  ven though the National Labor Relations Act makes E it illegal to prohibit private sector employees from discussing wages and working conditions, 62 percent of female employees in the private sector report that discussing their wages is either prohibited or discouraged by employers.24 In contrast, only 18 percent of women in the public sector reported similar policies. WORKPLACE JUSTICE | PAGE 2 • In the public sector, where wages are more likely to be public, wage gaps are slightly smaller. • One study found women’s earnings were 3 percent higher in six states that have enacted laws since 2012 prohibiting retaliation against employees who discuss pay.25 The same study found that in states with such policies, the gender wage gap is reduced by as much as 12 to 15 percent for workers with a college degree, and by six to eight percent for workers without a college degree. Women are overrepresented in low-wage jobs and underrepresented in high-wage ones. • In 2017, women made up nearly two-thirds of the 23.8 million workers in the 40 lowest-paying jobs— occupations such as personal care aides, home health aides, and fast food workers.26 • Conversely, women are underrepresented in higher wage occupations, making up 37 percent of workers in the 40 highest-paying occupations.27 This underrepresentation is due in part to the fact that women are discouraged from entering better paying fields, such as STEM.28 Sometimes this discouragement is subtle, but other times it is very overt, in the form of harassment and other forms of discrimination. mothers’ wages,35 though policies like paid leave make it more likely that women will continue to work after having children, strengthening their connection to the workforce.36 • Women in unions experience smaller wage gaps—but rates of unionization are low. • Less than 11 percent of the workforce belongs to a union, but those women who are members of unions experience greater wage equality. Female union members make 86 cents for every dollar paid to male union members, compared to female non-union members who make only 81 cents for every dollar paid to their male counterparts. Wages for women who are members of unions, especially white and Latina women, are higher than those of their female counterparts who are not represented by unions.38 • Unions not only bargain for higher wages, they reduce inequality by increasing pay transparency. For example, a recent analysis by a journalists’ union of their wage data revealed pervasive pay inequality in the industry,39 prompting a promise of immediate action by at least one national newspaper.40 Women’s work is devalued because women do it. • “Women’s” jobs often pay less precisely because women do them.29 A study of more than 50 years of data revealed that when women moved into a field in large numbers, wages declined, even when controlling for experience, skills, education, race and region.30 Caregivers are discriminated against and face barriers that result in lower pay. • • • Mothers are paid less than fathers and the motherhood wage penalty, which grows by an estimated seven percent for each child,31 is larger for low-wage workers.32 Employers’ negative stereotypes about mothers harm mothers’ job and salary prospects. In comparing equally qualified women candidates, one study revealed that mothers were recommended for significantly lower starting salaries, were perceived as less competent, and were less likely to be recommended for hire than non-mothers. The effects for fathers were just the opposite—fathers were recommended for significantly higher pay and were perceived as more committed to their jobs than men without children.33 Mothers’ wages are also affected by a lack of support for women’s disproportionate caregiving responsibilities. The high cost of child care and a lack of paid leave make it less likely that women with caregiving responsibilities are able to stay in the workforce.34 This time out of work negatively impacts Relatedly, increased access to contraception is one reason the gender wage gap closed in the last few decades of the 20th century. This access allowed women to control their fertility so that they could invest in education and increase their representation in nontraditional occupations, resulting in higher wages.37 What We Need To Do To Achieve Equal Pay In order to finally achieve equal pay we need to: • Strengthen our equal pay laws so that women are better able to discover and fight back against pay discrimination.41 • Build ladders to better paying jobs for women by removing barriers to entry into male-dominated fields.42 • Lift up the wages of women in low-wage jobs by raising the minimum wage and ensuring that tipped workers receive at least the regular minimum wage before tips.43 • Increase the availability of high-quality, affordable child care.44 • Help prevent and remedy caregiver discrimination and protect workers from pregnancy discrimination.45 • Establish fair scheduling practices that allow employees to meet their caregiving responsibilities and other obligations.46 • Provide paid family and medical leave.47 • Ensure women’s access to the affordable reproductive health care they need.48 • Protect workers’ ability to join unions and collectively bargain. Every Woman Matters. Every Dollar Matters. Equal Pay Matters.