Closing the Wage Gap

According to a Pew Research Center report, the gender gap in pay has remained relatively constant over the past 15 years, with women typically earning 84% of what men earn in similar roles. Most of the discrepancy has been attributed to education, occupation segregation, and work experience. Lack of experience comes from women leaving the workforce to take on traditional caregiving roles in the family. During the pandemic, this was magnified by stay-at-home orders disproportionately affecting women (particularly single mothers)and minorities (particularly essential workers). Women in the labor force are at a 33-year low following the pandemic, and as money women choose to re-enter the workforce, many will face an unemployment penalty – a wage cut typically observed when taking absences from work.

However, another study showed that when comparing the median salary for men and women with the same job and qualifications, women earned $0.98 for every $1 earned by men . This suggests that occupational segregation accounts for the biggest wage discrepancies – meaning that more women fulfill lower-paying jobs.

Minimum Wage and Its Impact

On January 1, 2022, the US Department of Labor (DOL) raised the national minimum wage from $7.25 to $11.25 per hour. That is a 55% increase for the lowest wage earners. Walmart is scrapping their decades-old bonus program in favor of incremental hourly wage increases, citing workers' preference. Even with this pay increase, Walmart remains the lowest-paying employer compared to its competitors Amazon and Target. In fact, Amazon announced wages of $18 per hour for new hires with an expectation of hiring 125,000 new jobs.?

But for the most part, minimum wage increases do not translate to an increase in wages for workers making more than minimum wage. Compensation Advisory Partners' (CAP) annual report on wages for top-level directors reported that wages remained flat over the past two years, partly in response to the pandemic. However, CAP expects pay raises to resume for directors in the coming year… Yet, it is unlikely higher earners will receive 55% pay increases any time soon.?

Discrimination and Bias in the Workplace

According to the Pew report cited previously, 42% of women reported experiencing gender discrimination, compared to 22% of men. The Women in the Workplace 2021 report found that 90% of companies track women's overall representation in the workplace but only 65% track gender differences in promotion rates. Nonetheless, women and minority women are stepping into leadership roles with more efficacy than their male counterparts. The research indicates that women are better people managers, more attuned to diversity, equity, and inclusion (DEI) in the workplace. While 86% of companies say it is "very or extremely" critical for managers to support their team members' wellbeing, only 25% are recognized for doing so. This same trend holds for DEI work. When companies prioritize DEI, employees are happier, more creative, experience less burnout, and are less likely to quit.?

So, Why Does it Matter??

Those experiencing pay discrimination lose hundreds of thousands of dollars over a lifetime compared to their white male counterparts. One study showed that women lost $406,280, white women lost $555,360, and black women lost $964,400 over their working lifetime. And this gap is expected to rise post-pandemic. Economists predict that the average woman worker will earn just 76 cents for every dollar earned by the average male worker. Furthermore, they predict it will take more than a decade to close the wage gap to what it was before the pandemic – which still was not equitable. In short, the pandemic exacerbated the gender pay gap.?

However, according to the Pearson Global Learner Survey 2021 , Gen Z women are still optimistic about their futures. The survey showed that 36% of Gen Z women believe gender equality in the workplace will improve compared to 25% of millennials and 29% of boomers. This shows promise for the next generation of workers, but there is still more to be done.?

Companies need to adopt pay transparency. In a survey , 58% of respondents said they would leave their current job for a company offering pay transparency. As women, we need to do our part, too. Seek out companies that adopt pay transparency and conduct regular pay equity audits… And advocate for your raises and promotions.?

Studies have shown that the pay gap is perpetuated by the ask gap. Women typically do not ask for the same amount as men when negotiating salaries. On average, women ask for 6% less. That same study found that women doctors in residency are happy with starting salaries that are 92% of that which their male peers request. As women, we need to be prepared and do our homework before entering wage negotiations. Together women can make a difference and close the gap in gender inequality.?