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Wage Gap between Men and Women: Numbers, Facts & Effects

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The wage gap between men and women has been a topic of discussion for decades. It’s time to take a deep dive into this issue and see how it affects the wage disparity in our workforce today.

In this article, we will discuss the wage gap from every angle: why it exists, what it means for employees, and how businesses can help close the wage gap. We’ll also go over some statistics, so you know just how big of an issue this is in America today.

Wage Gap by the numbers

A 2015 survey of workers in Europe and North America found a gender pay gap of 23%. The main contributor to this gap was the underrepresentation of women in jobs with high-wage. Women were also paid less than men for low-skilled work.

  • The labor market is not a level playing field for all genders.
  • Gender wage gaps persist due to differences in skill and expertise required for different jobs, differences in experience and training, and outright discrimination.
  • A 2003 European Commission report on female employment noted that the wage gap was widest among those with university education, between those with pre-primary school and those with secondary school education, and among those who had never been employed at any time.
  • Based on the Bureau of Labor Statistics, the gender pay gap in 2008 was around 77 cents per dollar. However, most of the wage gap is due to differences in work experience and career interruptions.

A 2011 study by the American Association of University Women found that women graduating from college with bachelor’s degrees were paid 80 percent of what men were paid one year out of college.

  • Overall, median earnings for young female college graduates have increased since 2000; however, at 84 percent, it remains significantly lower than the 95 percent their male counterparts earn.
  • According to OECD data published in 2014 on more than 40 countries, gender gaps have narrowed over time at all levels of education, but none are closed completely. The same study reported that worldwide some 10 fewer women had achieved 50% higher education than men.
  • A 2010 study by the US Government Accountability Office found that women earned 82% of what men earned in 2008 and 2009, using the median annual earnings of full-time workers. Comparing less precise surveys over time, economists have estimated the average gender pay gap to be about 77% for 2012.
  • Other studies show lower estimates. For example, a 2015 report by Glassdoor Economic Research showed an estimate of 21%. A 2017 paper by labor economists Francine Blau and Lawrence Kahn gives an estimate of 23%.
  • Research suggests that female representation at higher ranks or positions (e.g., company executives) is associated with smaller pay gaps within those corporations; one study finds “a notable-though-not-perfect negative correlation between the proportion female in the top-management team and the pay gap.”

Potential drivers of gender wage differences

  • Some differences result purely from individual choices being made by both male and female workers; the 2016 White House Report listed “occupation choice,” “major” (in college or university), and “work experience” as primary drivers for at least half of the gap.
  • A 2017 report by Glassdoor found that women negotiate to start salaries less frequently than men, an average of 2.7% vs. 4.1%.
  • Other occupational differences could be educational attainment or perceived discrimination due to a worker’s sex or family status. Economist Lawrence Katz states that about 10% of the gap can be attributed to differences in experience and training.
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Men have more career interruptions

For example, women are more likely to leave work for childbirth, childcare, and eldercare. The OECD states that “a possible reason for persisting gender pay gaps is that jobs predominantly done by women undervalued compared with jobs predominantly done by men.”

  • Alternatively, the 2016 White House Report suggested that pay differences could be due to fewer opportunities for women to enter high-paying jobs or male workers negotiating higher salaries due to their distribution of labor market characteristics (e.g., being a larger breadwinner than their spouse or having greater availability for overtime hours).
  • The US Bureau of Labor Statistics alleges that slightly over 50% of the wage differences between women and men is now due to differences in the characteristics of women and men (such as education, experience, occupation, etc.), up from 1980 when it was closer to 35%.
  • The BLS also stated that women’s education levels were projected to increase faster than that of men.

Raising children leads to lower wages for women

One possible explanation is that mothers seek employment more flexibly than the types available if they do not have children.

  • Research also shows wage penalties for married mothers compared with married fathers (i.e., husbands of working wives) or single workers. An is that gender norms expect different behavior in men and women in the workplace.
  • The 2016 White House Report found no difference by sex among younger workers (aged 25–34) in terms of their overall attitudes toward work.
  • However, when taking into account desired hours worked per week, after controlling for other individual characteristics such as education, task constraints at home (which affect both income potential and the opportunity cost of not working), having children under 18, spousal employment status (which reflects greater availability for flexible jobs), marital happiness, and religious observance biases the results in favor of male workers; this was especially evident amongst childless women aged 25 to 34 who planned to continue working full-time.

The factors that affect the wages of men and women

In 2015, “Gender Earnings Differences in the European Union” was published by Eurofound.

  • This study found a persistent pay gap throughout the EU Member States, especially between older workers (>45) who earned considerably less than their male counterparts, despite similar workforce participation among these men and women.
  • The report discusses various explanations for this gap: it is a result of female occupational choice, a manifestation of discrimination, or a combination thereof.
  • A study from 2011 has shown that the gender pay gap persists in OECD countries after controlling for confounding variables such as educational attainment – suggesting that discrimination against women executives translates to lower economic growth due to reduced labor market productivity.
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Women on boards and corporate leadership

In the United States, a woman’s average earnings were 77 percent of a man’s average earnings in 2009.

  • In Europe, research shows that there is still a persistent pay gap between men and women. The European Commission argues that this persisting gender pay gap is largely explained by “the major factors causing structurally lower female employment rates and lower female full-time employment levels.”
  • A study from 2015 has found an unexplained gender pay gap across the EU Member States for the period 2003–2012. This suggests that institutions such as wage bargaining play a large role in shaping the wage structure and, therefore, must be made more transparent since institutions vary from country to country.
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Economists frequently debate the causes of sex-based wage differentials.

However, researchers agree that the primary cause for the gender pay gap is occupational segregation. According to Professor June O’Neil, an economist at Baruch College and former Director of the Congressional Budget Office who specializes in gender economics, there are three reasons why men and women tend not to work in the same jobs:

Different education levels

The prevalence of women getting tertiary degrees has only recently become equal to that of men.

  • The higher percentage of women receiving college degrees can be explained by changing social roles due to industrialization leaving non-farming jobs available for educated women. In contrast, farming jobs were left for uneducated men.
  • However, despite increasing educational equality among genders (with young females now outnumbering males within all 29 countries studied), large sex-based gaps remain in many areas. In the United States, women have attained a slim majority of bachelor’s degrees since the 1980s, and currently, 60% of those earning bachelor’s degrees are female.

Occupational segregation by gender persists

With only a small proportion of jobs being part-time employment. Of full-time workers, men work longer hours than women on average – 8.4 percent more in 2013 – or work full-time and then some – 16 percent vs. 2 percent among full-time workers (Sullivan 2014).

  • (The average worker works 1,878 hours per year.) As such, men make up the vast majority of those working or more weeks per year; women, on average, work 1,703 hours per year (Bureau of Labor Statistics 2015).

Gender differences in labor force participation rates.

Worldwide, women have been more likely to be “economically inactive.” According to the International Labour Organization, women’s labor force participation rate has continued to grow since 2005, but it still slightly trails men.

  • In 2014 it was estimated that only 49 percent of working-age women were active in the labor market, compared to 77 percent of working-age men. This relative difference between men and women is projected to decrease across all age groups by 2020.
  • Different jobs often require different levels of education for entry as well as promotion opportunities within them. Furthermore, workplace cultures are predominantly masculine, and formal and informal workplace norms and cultures can create barriers to entry, promotion, or job satisfaction for women.

Different work hours

Differences in life expectancy between men and women also contribute to the gender pay gap.

  • According to Census Bureau data released in October 2014, four decades of change in employment trends have led to divergent earnings among both men and women. In general middle-aged men have been the winners during this time period, whereas women have been disadvantaged relative to men.
  • However, this trend may be shifting due to more working mothers who tend to earn less than childless women with comparable education levels. These factors are difficult, if not impossible, for employers to control since they result from societal level changes.

Occupational segregation by sector

Occupational segregation refers to how some jobs (typically higher-status jobs) are dominated by men, while others (generally lower-status careers) are occupied primarily by women.

  • This form of occupational segregation leads to gender wage gaps even after controlling for educational attainment and experience. Occupational differences have both direct and indirect effects on the gender wage gap.
  • Feminization of certain occupations contributes to the pay gap via skills required, hours worked, work conditions, non-wage benefits, prestige, and contact with customers.
  • The extent of occupational differentiation varies across countries due in part to labor demand characteristics that are influenced by social norms governing the roles for men and women in society.
  • For example, in the United States, the share of female workers is higher than average in occupations requiring an associate degree or less (72% vs. 60%).
  • In contrast, it is lower than average in professional & management positions (26% vs. 36%) and technicians & related support positions (35% vs. 47%).

Maternity leave

The Family and Medical Leave Act of 1993 ensures that companies with more than 50 employees are guaranteed unpaid leave for specific medical and family reasons.

  • However, this does not necessarily extend to casual employees, self-employed workers, independent contractors, or those who work for small businesses where FMLA covers few employees. This may result in women being disadvantaged relative to men due to women taking more of the leave than men.
  • For example, according to the “White House report on women in America”:
  • “56% of working mothers (with children under 18) versus 33% of working fathers say that they have taken a significant amount of time off from work in order to care for a child or family member.”

Men are eight times more likely to ask for a pay raise

This puts them at an instant advantage over their female counterparts, who presumably do not know that requesting a raise would benefit them.

  • The result is that less experienced females are passed over for raises and promotions because they are unaware such actions will further their cause. In contrast, males are more inclined to take the initiative for their own benefit.
  • In general, our society is skeptical of women in leadership roles. A study by professor Marianne Cooper and Christine Silva at Stanford University shows that a manager who is perceived as very successful but is a woman will be seen as less likable than a man with the same characteristics.
  • In contrast, a man will be perceived as more likable. This occurs because people have specific ideas about what it means to be a female or male leader, influencing their perceptions even if those notions are not always accurate. In other words, discrimination against women leaders often stems from “the application of different standards to men and women.”

Glass ceiling

“The glass ceiling effect refers to an unseen, unspoken barrier based on stereotypes that prevent minority members and women from advancing beyond a certain point in the workplace.”

  • Although the term “glass ceiling” originated from women’s experiences, scholars debate whether men face similar discrimination.
  • The glass ceiling effect can be seen in academia, where there are fewer female professors than male professors at Ph.D.-granting universities despite earning more degrees by women than men throughout the course of their academic careers.
  • Some scholars attribute this pattern of disparity to gender-based role socialization, which interprets career advancement as conflicting with family life and child-rearing responsibilities. This leads women to perceive that they will have greater fulfillment through raising children.
  • At the same time, men may get fulfillment through work or career development promotion, which furthers the organizational perpetuation of the glass ceiling.
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Perceived attractiveness

Some consider Appearance-based discrimination to be a subcategory of sexism or, more aptly, an example of ambivalent sexism.

  • The “social construction of beauty” refers to societies use stereotypical ideals of beauty as being socially significant so that “attractiveness evaluations are fundamentally concerned with the social legitimation of power.”
  • This can result in overt manifestations such as certain job positions being given to less qualified individuals based on their looks because they fulfill certain traditional notions of beauty. In contrast, other jobs which do not necessarily rely on this notion hold merit above all else.
  • Appearance-based discrimination also has negative consequences for men who fit society’s traditional standard for feminine beauty (e.g., long hair, slender figure) since they are discriminated against for conforming to the norm rather than being seen as unique.
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Intersectional discrimination

“Discrimination based on both sexism and racism is called “intersectional” or “dual” discrimination.”

Much of the research regarding intersectional discrimination has focused on black women in the labor market and workplace.

The connection between intersectionality and social movements, such as feminism and Black Lives Matter, stems from an analysis of social inequality and structural oppression.

Because experiences between races and genders vary significantly among individuals, scholars argue that it is crucial to acknowledge these differences and their impact on those who hold multiple marginalized identities instead of viewing those affected as a homogeneous group with similar needs.

Intersectionality is linked to standpoint theory

Members of oppressed groups may have different perspectives based on where they are positioned in society.

  • Those who do not experience social inequality, specifically white men, cannot understand and address the needs of those they discriminate against.
  • Gender-based discrimination is sometimes viewed as a form of sexual objectification, which refers to “treating someone as a thing or mere instrument.”
  • This occurs when one person is treated solely as an object of their own sexual desire instead of being treated with dignity, respect, trustworthiness, individuality, etc.
  • The victim here does not hold the same degree of agency because they are passed around from one individual to another rather than being given a choice about what happens during their interactions.
  • Objectification may also not be intended by the person treating another in an objectifying manner.

Objectification Impacts on health

Objectification theory that Fredrickson and Roberts created in 1997, which links objectification to depression, disordered eating, sexual dysfunction, and sexual aggression.

It hypothesizes that women are more likely to appear in media as objects of desire rather than as individuals with complex personalities, affecting men’s psychological well-being because this may translate into how they treat women later in life.

Objectification theory states that women are socialized to internalize an outsider’s view of their bodies, so even if the woman knows her appearance does not accurately reflect who she is inside, it becomes her identity because she feels valued only through the gaze of others.

This can result in the belief that her appearance is the most critical part of her, leading to an increased focus on body-related thoughts and feelings, resulting in lower concentration levels on complex tasks.

Objectification theory also states sexualized portrayals “inadvertently elicit sociocognitive processes (e.g., passive acceptance of or acquiescence to objectifying treatment) because these cues signal how one should feel about oneself.”

Another example would be a female who rejects the idea that she is nothing more than an object for another’s viewing pleasure may be seen as defiant or rebellious, which often leads to punishment by those who view women as objects instead of people with agency.

Gender discrimination within academia

Researchers sent two identical application materials to 127 biology, chemistry, and physics professors at top universities in the U.S., one with a male name as the applicant’s first name and one with a female character.

  • The applications were the same except for the different names. Only half of them received requests for follow-up interviews despite no difference between their resumes or letters of recommendation besides their gender (the rate should be 50%). This study demonstrates how discrimination affects women in workplaces across all professions.
  • Researchers have studied the association between objectification theory and health, who argue that if women internalize an outsider’s view of their physical appearance, it can negatively impact both psychological well-being (body dissatisfaction, appearance anxiety) and physical health (eating disorders).
  • Both of these issues have been associated with depression. Furthermore, the pressure to engage in beauty practices is often experienced by women as a form of psychological objectification, leading to an increased risk for depression.

What effect does this have on inequality?

According to some philosophical perspectives on human nature, objectification may lead to severe consequences for those who are being objectified and those who are doing the objectifying.

  • These consequences are represented in some theories of justice, particularly within liberal feminism and social equality.
  • The philosopher Martha Nussbaum wrote that “objectification has recently been understood increasingly not only as an ethical wrong but also as a far-reaching source of social injustice.”
  • Nussbaum believes that, because of the self-objectification that occurs in women due to their objectification by men and other women, women are prevented from developing the full range of their individual capabilities.
  • Some people argue that objectification theory is not just an issue for women dealing with men but can also be applied to issues such as teenage body image among girls. The rise of social networking sites like Facebook has further promoted this phenomenon. Some researchers believe that this decline in self-esteem reflects an overall decline in confidence and self-worth among America’s youth.

Conclusion

  • The wage gap has existed since women entered the workforce
  • Women earn $0.77 on average for every dollar that men do
  • To close the wage gap, we must address four factors: education/occupation choice; child care responsibilities; wage discrimination & negotiation
  • The wage gap is a complex issue with no easy solution. It will take the effort of every person in America to close this wage disparity between men and women.
  • Many people believe that closing the wage gap is as simple as giving women equal education opportunities or forcing employers to pay women more for their work
  • Forcing businesses to increase female wages has shown little benefit in closing the wage gap since factors outside of job performance cause most issues
  • We must address four key areas if we hope to see significant change: education/occupation choice; child care responsibilities; wage discrimination & negotiation
  • Women need better access to high quality, low-cost child care so they can balance wage work with family life
  • To close the wage gap, women must be willing to negotiate for higher wages when they are in a position of power within an organization. This means that men who continue to ask for raises even after establishing themselves in their field will no longer have as much bargaining ability as new female employees.
  • Closing this wage gap is possible if every person commits themselves to be part of the solution. We can do it together!
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