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Pay Equity

What is the pay gap?

The pay gap is the difference in men's and women's median earnings, usually reported as either the earnings ratio between men and women or as an actual pay gap.  In 2015, women working full time in the United States typically were paid just 80% of what men were paid, a gap of 20%.  This gap increases for women of color and changes from state to state.  

Compared to salary information for white male workers, Asian American women’s salaries show the smallest gender pay gap, at 85 percent of white men’s earnings. The gap was largest for Hispanic and Latina women, who were paid only 54 percent of what white men were paid in 2015.  African American women made 63% of white men's earnings.  This data comes from surveys conducted by federal agencies such as the U.S. Census Bureau, the U.S. Department of Education, and the U.S. Bureau of Labor Statistics.  

What causes the pay gap?

The origins of the pay gap are more complicated than a single cause.  Below are some areas that can impact the pay gap from the Simple Truth about the Gender Pay Gap Spring 2017 report from the AAUW

Occupation and "Choice" 

Women are disproportionately represented in education, office and administrative support, and health care occupations, and men are disproportionately represented in construction, maintenance and repair, and production and transportation occupations.  Segregation by occupation is a major factor behind the pay gap. Even though a pay gap exists in nearly every occupational field, the value that we place on the jobs typically held by men often pay more than jobs typically held by women.  

Parenting and Time Away from Work

Taking time away from the workforce or cutting back hours, both more common scenarios for mothers than fathers, hurts earnings (Bertrand et al., 2010). Many stay-at-home and part-time working mothers will eventually decide to return to the full-time workforce, and when they do they may encounter a “motherhood penalty” that extends beyond the actual time out of the workforce.  Fathers, in contrast, do not suffer a penalty compared with other working men. Many fathers actually receive higher wages after having a child, known as the “fatherhood bonus” (Killewald, 2013Budig, 2014).

Gender Discrimination and Bias

Not all of the gender pay gap can be "explained away" by choices such as college major, occupation, work hours, and time out of the workforce.  Discrimination and bias against women in the workplace are also culprits in the pay gap.  Gender bias factors into how our society values some jobs over others.  So how do we know that discrimination and bias affect women’s pay? Because discrimination cannot be directly detected in most records of income and employment, researchers look for the “unexplained” pay gap after statistically accounting for other factors.

For instance, after accounting for college major, occupation, economic sector, hours worked, months unemployed since graduation, GPA, type of undergraduate institution, institution selectivity, age, geographical region, and marital status, AAUW found a remaining 7 percent difference between the earnings of male and female college graduates one year after graduation. That gap jumped to 12 percent 10 years after college graduation (AAUW, 2012AAUW Educational Foundation, 2007). Other researchers have reached similar conclusions about gender discrimination and the pay gap. For instance, a study of medical researchers found an unexplained gap of 6 percent between comparable men and women in the field, and a recent study of the American workforce as a whole found an unexplained gap of 8 percent (Jagsi et al., 2012Blau & Kahn, 2016).

Individuals

Because most employers have some latitude when it comes to salaries, negotiating can pay off. While women can’t negotiate around discrimination, knowing what your skills are worth and learning techniques to promote them can help. Traditionally, it has been socially expected (and therefore accepted) for men to negotiate for raises because negotiating conforms with the stereotype of men as assertive. But negotiation is especially tricky for women because some behaviors that work for men, like self-promotion and assertiveness, may backfire on women (Carter & Silva, 2011Bowles & Babcock, 2013). Knowing what your skills are worth, making clear what you bring to the table, emphasizing common goals, and maintaining a positive attitude are some negotiation tactics that have been shown to be effective for women (Babcock & Laschever, 2008).

Employers

Companies should know by now that paying workers fairly is necessary for legal and ethical reasons. But fair pay can also be good for the bottom line. Believing that an employer is fair improves workers’ morale (Cohen-Charash & Spector, 2001Kim, 2009). Work performance has also been linked to the perception of organizational justice (Colquitt et al., 2001). In other words, workers who believe that they are paid fairly are more likely to contribute their best effort to the job.

Government

Federal

Congress has a history of considering, and in some cases enacting, laws that address discrimination in employment. Yet these legal protections have not ensured equal pay for women and men. 

State

As inaction continues at the federal level, states are moving forward with their own laws to ensure that women receive equal pay for equal work. The good news is that nearly every state has a law prohibiting employers from paying workers differently based solely on their gender. The bad news? Many of these laws are limited in scope or are not enforced. Every state has room to make its pay equity laws stronger.

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