Understanding the Gender Pay Gap

The gender wage gap is the difference between what women and men earn for performing full-time, year-round paid work. Nationally, women earn 16–18% less than men. Although the gap has substantially narrowed from 41% when the Equal Pay Act was passed in 1963, varying reports estimate that, depending on the rate of change, it may take anywhere from 40 to 130 years to close the gap. Estimates suggest that over a 40-year career, the wage gap can amount to a lifetime earnings deficit of $80k to $800k. Closing the gender wage gap will strengthen economic stability and prosperity for families and communities.

A few months ago, researchers on my team (Rebecca Winkel, Dr. Emily S. Darowski, Marin Christensen, and myself) sought to better understand if progress has been made with the gender pay gap in Utah. In the process, we uncovered some of the national data that helps us understand the complexity. Personally, I’ve been studying this for over a decade, and it is important for everyone to understand. I will provide a quick overview of what we found, and you can access a copy of the full research snapshot with references anytime.

Overview & Demographics

In 2021, the US pay gap is that women earn about 82% (or 18% less) of what men earn. Multiple factors influence the gap, including occupational segregation, structural dynamics of the labor market, human capital or productivity factors, and gender discrimination and bias. Socialized cultural norms and attitudes also interact with these factors and affect women’s educational, career, and work-life choices.

Although the pay gap is substantial among all American women, it is even higher for women from specific racial and ethnic groups. For example, compared to the earnings of non-Hispanic White men, woman who are Black, Native Hawaiian, and Pacific Islander make 63%, Native American women make 60%, and Hispanic/Latina women make 55%. Furthermore, all women nationally earn less than men in their same racial or ethnic group. Along with race/ethnicity, other additional intersection-al factors—such as sexual orientation, gender identity, and disabilities—compound to widen the gap.

Causes

Occupational segregation, where jobs and industries are heavily occupied by one gender, is a key factor in the wage gap; male-dominated fields generally pay more than those dominated by women. Additionally, structural dynamics, or how labor market or job practices are designed, can negatively impact women’s wages. Such practices include long or inflexible workdays, in-person requirements, and requests for salary history when hiring.

During the COVID-19 pandemic, occupations and industries that women dominate were disproportionately impacted by layoffs, furloughs, and potential exposure to the virus. In addition, because women do more unpaid care work than men, women were more likely to take unpaid leave or to leave the workforce altogether when schools, daycare, and other care options closed. These circumstances may end up widening the wage gap in future years as breaks in labor force participation affect experience, skill development, and earnings (e.g., the wage gap is smaller for older women who have worked continuously). More generally, career breaks related to caregiving affect pay (particularly for low to middle earners) and other factors related to career success, such as discrimination or how employers perceive women’s competence and commitment. Conversely, working fathers do not typically experience such setbacks and often experience benefits from parental status. These examples demonstrate just a few of the ways that women’s work-related options and decisions are influenced by structural barriers and cultural norms that can have long-term ramifications.

Discrimination and Bias

The gender wage gap decreases when controlling for factors such as age, education, and job selection, yet recent studies have shown a remaining 2% to 8% gender wage gap (some studies show more). The unexplained portion of the gap is often attributed to gender discrimination or implicit biases that affect behavior, which can manifest in workplace practices that inhibit women’s advancement. For example, men are often given higher profile or more rewarding job assignments than women and are more likely to appear on shortlists for promotions. Of broader concern is research indicating that “work done by women simply isn’t valued as highly.”?When women begin to dominate a typically male-dominated field, the pay drops; conversely, when men begin to dominate a female-dominated field, pay increases.

Choices & Influences

Some argue the wage gap results from women’s choices—that is, women make education, occupation, industry or work-life decisions that simply lead to lower wages—and thus does not require external intervention. While the wage gap has narrowed over time as women have pursued greater educational attainment and workforce participation, researchers agree that women’s decisions are tied to cultural norms, structures, and attitudes such that women’s choices cannot be attributed solely to preference. For example, cultural and social influences can lead women to underestimate their competency and to self-select lower paying work, even when accounting for factors such as education; researchers suggest gender socialization influences how women view themselves, or that “cumulative experiences of pervasive discrimination lead women to undervalue their labor.” Similarly, girls’ and women’s attitudes and aspirations related to math and science shift over time, affected by influences such as parental attitudes, media messages, and ability beliefs.

Cultural gender norms and attitudes also affect how women seek jobs and advancement. Some research has found that women apply to jobs when they meet every qualification, whereas men will apply when they meet only 60%. This holds women back from more competitive opportunities and advancement. Women are also less likely to negotiate aggressively for a salary and are often penalized or unsuccessful when trying to do so. In this case, women are socialized to be accommodating, and employers may implicitly respond in negative ways to assertive behaviors from women (i.e., the double bind).

Conclusion

In sum, research confirms that women’s education and labor force decisions contribute to the wage gap, along with occupational segregation and structural dynamics of the labor market. In addition, cultural and gender socialization, along with bias, add another layer of impact. All these factors influence how both men and women evaluate women’s work, their roles in the labor force, and the reward for that work; ultimately, it suggests that what may appear to be decisions of preference by women are often implicitly constrained choices. Importantly, these impacts are compounded for women of color and other marginalized groups. Again, a copy of the report, “Utah Gender Wage Gap: A 2021 Update,” is available for download with this and additional contact focused on Utah. I'll post a few other articles that go deeper in upcoming weeks.

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?Dr. Susan R. Madsen is a global thought leader, author, speaker, and scholar on the topic of women and leadership. She is also the Inaugural Karen Haight Huntsman Endowed Professor of Leadership in the Jon M. Huntsman School of Business at Utah State University and the Founding Director of the Utah Women & Leadership Project. Thanks to Rebecca Winkel and Dr. Emily S. Darowski for their work on this research!?