The Gender Pay Gap May Not Close in This Century
In 1960, a woman’s median annual earnings amounted to 60% of a man’s median earnings. As of the end of 2017, that gap had closed to 80%, and if the trend continues, women will be paid the same as men by 2059, a full century later.
And that’s the good news.
Since 2000, the pace at which the pay gap is closing has slowed down, and if that trend line is followed, equal pay does not become a reality until 2106, a full 89 years from now and 186 years after U.S. women won the right to vote. The data were released Tuesday by the American Association of University Women (AAUW) in a new report called “The Simple Truth About the Gender Pay Gap: Fall 2018 Edition.”
As always, the devil is in the details, or, as Irish playwright and novelist Oscar Wilde once said, “The truth is rarely pure and never simple.”
Behind the gross data are scores of data points and conclusions that amplify the effects of the gender pay gap. For example, because women tend to be paid less in their first jobs, subsequent wage increases based on salary history continue to reflect that initial inequality all through a woman’s working life. Lower earnings mean women typically receive less income than men from Social Security, pensions and other income sources once they retire.
As the report notes:
Closing the gender pay gap would have a large impact on women, their families, and the economy. Eliminating the gender pay gap by increasing women’s pay to match that of men of the same age and education level would cut the poverty rate for all working women in half, regardless of their family structure. Closing the gender pay gap would also provide a boost to the economy. Providing equal pay to women would increase the wages paid into the economy by $513 billion, which represents 3 percent of the 2016 gross domestic product.
The four states with the lowest differences in pay are California and the District of Columbia, where women earn 89% of the male median, New York (88%) and Florida (87%). In three states — Delaware, Vermont and Maryland — women earn 85% of a man’s salary.
The four states with the greatest differences are Louisiana (69%), Utah (71%) and Indiana and Alabama (73%).
Hispanic women earn just 53% of what a non-Hispanic white man earns at the same age, with the same job, and with the same education. African American women earn only 61%, non-Hispanic white women earn 77% and Asian women earn 85% of the median non-Hispanic white man’s earnings.
More education narrows the gap, but doesn’t close it. In a study released earlier this year and cited by the AAUW, Georgetown University’s Georgetown Center on Education and the Workforce indicated that if a woman wants to be paid the same as a man in a high-paying occupation she needs to have one more post-secondary degree than a man.
The AAUW notes what it calls “occupational segregation” as a major factor in the gender pay gap. Jobs traditionally associated with women (teachers, nurses, administrative assistants) are not only lower paying jobs, men in these traditionally women’s jobs are paid more than women.
The “motherhood penalty” is another drag on women’s pay:
Experimental studies have documented that employers are less likely to hire mothers (including mothers who never left the workforce) than they are to hire women without children, and when employers do make an offer to a mother, they offer her a lower salary than they offer to other women. The magnitude of the penalty for mothers in the workforce has remained steady for the past few decades or even increased slightly for some mothers after accounting for education and work experience.
The report concludes with a number of recommendations for both women and potential employers to help close the gender pay gap. Another suggestion is pushing legislation through Congress, but only 23 states even pay women 80% of the median salary for men. While political action is certainly going to be required, the current Congress and administration are not likely to be much help.
Visit the AAUW website to read the full report.