The gender pay gap, which refers to the average difference between men’s and women’s earnings, has persisted over time despite progress toward gender equality in the workplace. There are many factors that contribute to the gender pay gap, including discrimination and biases, differences in education and work experience, occupational segregation, and interruptions in career paths due to family care responsibilities.
What is the gender pay gap?
The gender pay gap refers to the difference between the average earnings of men and women. In the United States, women earn 82 cents for every dollar earned by men, according to 2021 data from the U.S. Census Bureau.
This amounts to a gender pay gap of 18 percent. While the gap has narrowed over time (in 1980 women earned just 62 cents for every dollar earned by men), progress has stalled in recent years.
How big is the gender pay gap?
On average in the U.S., women earn:
- 82 cents for every $1 earned by men (Census Bureau, 2021)
- A woman who worked full time, year-round earned $47,299 while a man earned $57,456 (Census Bureau, 2021)
- Over a 40-year career, women lose $406,760 on average due to the wage gap (National Women’s Law Center, 2021)
The gap varies by state, with Louisiana having the largest gap (women earn 69% of men’s earnings), and Washington D.C. having the smallest gap (women earn 90% of men’s earnings) according to 2021 Census data.
The pay gap also varies by race and ethnicity. Black, Hispanic, American Indian/Alaska Native women typically earn even less compared to white, non-Hispanic men.
What causes the gender pay gap?
There are many interrelated factors that contribute to lower pay for women on average compared to men:
Discrimination and bias
While explicit discrimination in compensation has been made illegal, more subtle biases can still impact salaries offered to women. Studies show that when evaluating identical resumes, those with male names are offered higher starting salaries on average.
Differences in education and work experience
The gender gap in pay is lower for younger workers, suggesting that gains in educational attainment and work experience have helped narrow the gap. However, differences still remain at all education levels.
Occupational segregation
Women and men still tend to work in very different occupations. Female-dominated jobs like nursing, teaching, and social work typically pay less than male-dominated fields like engineering and tech.
Career interruptions for family caregiving
Women are more likely to take time out of the workforce for child-rearing and caring for elderly parents. This impacts career trajectories and can contribute to lower pay.
Difficulty accessing flexible schedules
Lack of flexible work options can disproportionately impact women who still take on more caregiving duties at home. This can force some women to move into part-time work or leave the labor force entirely.
Weak salary negotiation skills
Some research suggests women are less likely to negotiate higher salaries due to cultural biases and norms. Improving negotiation skills is one way to help close the gender wage gap.
How does the gender pay gap impact women over a lifetime?
The gender pay gap compounds over a woman’s career, contributing to large differences in lifetime earnings between women and men. A few key impacts over a 40-year career include:
- A woman earns $406,760 less on average than a man (National Women’s Law Center, 2021)
- A woman will have less money saved for retirement and will receive lower Social Security benefits
- A woman is more likely to live in poverty in old age and have trouble making ends meet
The wage gap means women must work longer to make up for lower pay. It also contributes to the feminization of poverty, since women have fewer financial resources over a lifetime.
Does the gender pay gap still exist for young women?
Yes, though the gap is smaller for younger workers. According to Census Bureau data:
- Women under 35 earn 89-90 cents for every dollar earned by men (compared to 82 cents overall)
- This early career wage gap adds up to $200,000 in lost wages over a 40-year period
A study from ADP Research Institute found that the pay gap emerges right out of college. Men’s average annual pay was nearly $3,300 higher than women’s pay just one year after graduation.
While the wage gap is smaller for younger women, it still exists and contributes to lower lifetime pay if it does not narrow further over time.
Does having a college degree help close the gender pay gap?
Yes, but a degree does not eliminate the gender pay gap. Women with a bachelor’s degree earn 74 cents for every dollar earned by men with a bachelor’s degree on average. The gap remains at all education levels:
- Women with an advanced degree: 77 cents for every dollar paid to men
- Women with some college: 78 cents for every dollar paid to men
- Women with a high school diploma: 74 cents for every dollar paid to men
While education boosts earnings for both genders, women continue to face a wage penalty at all levels of educational attainment. Tackling factors like occupational segregation and discrimination are still needed to fully close the gender wage gap.
Does the gap narrow when comparing men and women in the same jobs?
The gap narrows but a small difference remains when men and women work in the same occupations. One study looking at pay differences among cashiers, cooks, sales reps, and managers found:
- Women earned 96 cents for every dollar earned by men when working as cashiers
- Women earned 87 cents for every dollar earned by men as cooks
- Women earned 79 cents for every dollar earned by men as sales reps
A 2021 analysis by Payscale found an unexplained 1.9% pay difference between men and women remained, even when controlling for factors like job title, experience, industry, location, education, skills, and more.
This indicates there are still subtle biases impacting women’s pay, even for the exact same jobs.
How does motherhood impact the gender wage gap?
Several studies show that motherhood contributes to a larger pay gap when compared to childless women or fathers:
- Mothers earn 71 cents for every dollar paid to fathers (National Women’s Law Center, 2020)
- Childless women earn 96 cents for every dollar paid to childless working men (Kleven et al., 2019)
Reasons for the “motherhood penalty” include:
- Mothers are less likely to be hired and promoted
- Biases that mothers are less competent and committed
- Mothers are more likely to take time off work or reduce hours
- Fathers earn a “fatherhood bonus” as employers perceive them as more stable
Tackling discrimination against mothers and offering better family leave policies could help close this gap.
How does the gender pay gap vary by race/ethnicity?
The wage gap differs significantly by race and ethnicity in the U.S.
Compared to white, non-Hispanic men’s salaries in 2021, women earn:
- White women: 79 cents for every dollar
- Black women: 63 cents for every dollar
- Native American women: 60 cents for every dollar
- Latina women: 57 cents for every dollar
Black and Latina women face both a gender and racial pay gap, resulting in the lowest salaries relative to white men. This intersectionality exacerbates gaps in lifetime earnings and retirement savings.
Does the gender pay gap still exist globally?
Yes, the gender wage gap is persistent across the globe, though the size varies by country. According to 2020 data from the OECD:
- Korea has the largest gap: women earn 63% of men’s earnings
- Luxembourg has the smallest gap: women earn 89% of men’s earnings
- The U.S. ranks 19th out of 37 countries, with a gap of 18%
While most advanced economies have equal pay laws, applying them comprehensively remains a challenge. Social norms, discrimination, and lack of work-family support all contribute to global gender pay inequality.
What industries have the smallest and largest pay gaps?
Here are 5 industries with the smallest and largest gender pay gaps according to Payscale’s 2021 data:
Smallest Gender Pay Gaps
- Forestry & Fishing: Women earn 99.2% of men’s pay
- Community & Social Services: Women earn 97% of men’s pay
- Therapy: Women earn 96.4% of men’s pay
- Human Resources: Women earn 94.9% of men’s pay
- Advertising: Women earn 93.7% of men’s pay
Largest Gender Pay Gaps
- Mining: Women earn 76% of men’s pay
- Construction: Women earn 76.9% of men’s pay
- Architecture: Women earn 79.3% of men’s pay
- Industrial Manufacturing: Women earn 79.9% of men’s pay
- Information Technology: Women earn 80.7% of men’s pay
Male-dominated industries like mining and manufacturing have the widest gaps, while care-oriented fields like therapy and HR have the smallest. Tackling occupational segregation is key to closing the wage gap.
What can companies do to help close the gender pay gap?
Here are 5 steps companies can take to promote pay equity:
- Conduct an internal pay audit to identify gaps
- Implement transparent compensation structures
- Offer unconscious bias training to prevent discrimination
- Offer flexibility and parental leave to retain women
- Publicly report diversity and inclusion data
Many tech companies like Salesforce, Amazon, Apple, and eBay have publicly committed to auditing and closing gender and racial wage gaps. Accountability and transparency are critical.
What can governments do to address the gender pay gap?
Governments worldwide have implemented equal pay laws, but enforcement remains inconsistent. Further policy steps that could help close the gender pay gap include:
- Strengthening pay transparency laws
- Increasing minimum wage standards
- Guaranteeing paid family and medical leave
- Providing subsidized childcare
- Implementing pay equity audits for federal contractors
For example, Iceland requires companies to obtain an “Equal Pay Certification” proving equal pay for equal work. The UK now requires employers with 250+ workers to report gender pay gap statistics. More rigorous reporting and auditing could accelerate progress.
What can women do to help close the pay gap?
While the onus is not solely on women to close the gap, steps individuals can take include:
- Research salaries to negotiate better pay
- Seek mentors and sponsors to advance your career
- Ask about compensation and promotion processes
- Advocate for equal pay transparency
- Consider roles in higher-paying fields
Women can also push for change through supporting pay equity laws, speaking up about discrimination and biases, and encouraging other women to demand fair pay.
Conclusion
Significant progress has been made, but the gender wage gap remains persistent and pervasive. Tackling the root causes including discrimination, occupational segregation, and lack of work-family support are needed close the gap. It will also take commitment from policymakers, employers, and individuals to enact change.
Equal pay strengthens women’s economic security and families’ financial stability. It is also critical for building diverse, equitable, and successful economies and workplaces. Closing the gender pay gap has wide-ranging societal benefits that make it an urgent and worthwhile endeavor.