A Deeper Look at the Gender Pay Gap and its Intersectionality With Race and Age

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In July 2023, we saw many headlines on the gender pay gap and how it had just reached its lowest value on record. While that is certainly a welcome development, the US has the 7th highest gender pay gap among all 38 OECD member countries, emphasizing that we still have some way to go.

Here at Team JTC, we took the time to dig deeper into this topic, and I would like to share the results of that investigation with you today. In particular, I was interested to learn about the intersectionality of the pay gap with race, and also to gain a historical perspective on the issue.

Before going any further, I think it is important to raise two crucial points.

First, statistics on the pay gap can vary depending on the source, since different studies often give slightly different numbers, but the trends remain the same. Second, and perhaps more importantly, there are considerable regional differences in racial and gender pay gaps across the US.

In terms of the central factors, I don’t think this detracts too much from using generalized statistics at the national level. But from a diversity recruiting perspective, I think it does matter. In your organization, you should aim to understand the specific pay situation for underrepresented groups in your region, especially if you are hiring for on-site positions. That information could give you valuable insights for your sourcing strategies and help you attract a diverse applicant pool.

With those things in mind, it is now time to briefly consider the story behind the gender pay gap.

A Short History of Gender Wage Differences

The US Department for Labor did not start collecting pay statistics by gender until relatively recently, in 1979, but the work of many NGOs and academic researchers allows us to build up a picture prior to that time. In short, the origins of the gender pay gap can historically be linked to both social and political factors.

At the turn of the 20th century, cultural norms meant that few women worked outside the home. In 1900, the Census believed that economic activity for women was “far from being customary, and in the well-to-do classes of society is exceptional.” The labor force participation rate for women was 20% overall, but this was only 5% for married women. Moreover, occupational choices were limited due to cultural expectations and barriers to accessing education (as we have already seen).

Beyond these factors, direct pay discrimination was also common. For instance, in the 1920s, saleswomen in department stores were paid half as much as men for doing the same job.

In the 1930s, President Franklin D. Roosevelt’s New Deal program notably failed to offer job protections for certain occupations, and thereby set the precedent for segregation of women of color into lower-paid jobs that remains with us to this day. This last point highlights the intersectionality of gender and race, which should not be overlooked when considering the pay gap, so I will expand on the point shortly.

However, it is also vital to appreciate the relevant political and legislative changes. While labor force participation generally increased for all women throughout the 20th century, they often earned less than men, particularly until the Equal Pay Act was passed in 1963. Before then, employers could legally pay women less than men for doing the same job. Laying off women on the basis of pregnancy was also legal until the Pregnancy Discrimination Act of 1978.

The gender pay gap then closed rapidly for several years, with women’s earnings jumping from 62% relative to men in 1979, to 77% in 1993. One study attributes this, at least in part, to the growing importance of people skills in the workplace between the 1970s and 1990s. Unfortunately, progress in closing the pay gap then slowed considerably, with only a further 8% increase in women’s earnings (relative to men’s) during the past 30 years.

Behind the Headline Numbers: Intersectionality of the Gender Pay Gap

Official US Census Bureau data shows that in 2021 , White women earned 78% as much as White men, while Black women earned only 63% as much. Hispanic women fared even worse, with annual earnings of only 57% of those for White men. Regardless of gender, Black Americans have consistently earned only about 60% as much as White Americans for at least the last 20 years .?

Pew Research Center reported similar findings in 2016 and analyzed the pay gap by race and gender back to 1980. While the gender pay gap closed significantly for White women from 1980–2016, the pay gap for Black and Hispanic workers (both men and women) has stayed virtually the same since the 1990s. In contrast, multiple studies identify a consistently smaller gender pay gap for Asian women (for example, 92% of the earnings of White men in 2021 ).

These statistics tell us that Black and Hispanic women face a much larger pay gap than the headline figures suggest, and also underline how this situation has persisted for decades. In fact, for some women, the pay gap may actually have widened in recent years. The Washington Center for Equitable Growth reports that while Black women made significant progress in accessing higher-paid jobs between the 1940s and 1980s, this trend has surprisingly reversed somewhat in the 21st century.

One response is, might differences in education levels explain these trends?

This is a good question, given that I have previously explained how women were historically denied the same access to education as men. Interestingly, this no longer seems to be a major influence on the pay gap. Using 2021 data, the US Government Accountability Office found relatively small differences based on educational level, and the effect of race was far stronger.

Stop and think about that for a moment, and let it sink in.

In 21st century America, race determines a woman’s economic opportunities much more than educational level. How are we still in that place? As a community of diversity recruiters, I think it is imperative for us to keep that in view if we are going to see real change for the better.

To wrap up today’s article, there is one other important factor I would like to mention.

A recent study by Pew Research Center recently revealed the intersectionality of the gender pay gap with age, showing that the gap widens for working women as they age (relative to men of the same age). This might reflect the corporate “glass ceiling,” but either way, it reminds us that the pay gap affects all women at all organizational and experience levels.

JOIN US IN THE COMMENTS: How have you been working to close the gender pay gap in your organization? In your experience, what factors do you think underlie the persistence of the pay gap since the beginning of the 21st century? As always, we value your insights, and we also hope that today’s article will spark new conversations on this vital topic.