Why the Gender Pay Gap Still Exists
Striving for a Gender-Equal Society
According to the American Association of University Women (AAUW), women working full time in the U.S. are still paid just 83 cents to every dollar earned by men — and the consequences of this gap affect women throughout their lives. The pay gap even follows women into retirement: As a result of lower lifetime earnings, they receive less in Social Security and pensions. In terms of overall retirement income, women have only 70% of what men do.
I have previously blogged about this issue and found that the gap was closing, but very slowly. This is concerning because efforts to close the gap for many years should have had a larger effect. Still, there is some good news as addressed below. But, more needs to be done to bring women up to the same level as men regarding compensation and benefits.
A Harvard University research report shows that firms with more women in senior positions are more profitable, more socially responsible, and provide safer, higher-quality customer experiences — among many other benefits. Moreover, there is a clear moral argument for increasing diversity among top management teams. But when it comes to explaining why having more female executives is associated with better business outcomes, and what specific mechanisms cause those positive changes, existing research is much more limited.
Published census data for 2021 provide the following information.
- Women made up about 44% of the total workforce but only 41% of managers.
- While overall, women earned about $.82 for every dollar men earned, Hispanic or Latina women earned about $.58 and Black women earned about $.63 for every dollar White men earned
- The gender pay gap varied by level of education: it was greatest for women with less than a high school diploma or equivalent and was smallest for women with a bachelor's degree.
- The gender pay gap was also greater for women in certain sectors. For example, among workers who were self-employed in their own incorporated business, women earned an estimated 69 cents for every dollar earned by men (a pay gap of 31 cents on the dollar). In private, for-profit companies, women earned an estimated 78 cents for every dollar earned by men (a pay gap of 22 cents on the dollar). In government agencies and non-profit organizations, women earned an estimated 85 cents for every dollar earned by men (a pay gap of 15 cents on the dollar).
According to census data, the wage gap is smaller for workers ages 25 to 34 than for all workers 16 and older. In 2022, women ages 25 to 34 earned an average of 92 cents for every dollar earned by a man in the same age group – an 8-cent gap. By comparison, the gender pay gap among workers of all ages that year was 18 cents.
While the gender pay gap has not changed much in the last two decades, it has narrowed considerably when looking at the longer term, both among all workers ages 16 and older and among those ages 25 to 34. The estimated 18-cent gender pay gap among all workers in 2022 was down from 35 cents in 1982. And the 8-cent gap among workers ages 25 to 34 in 2022 was down from a 26-cent gap four decades earlier.
Much of the gender pay gap has been explained by measurable factors such as educational attainment, occupational segregation and work experience. The narrowing of the gap over the long term is attributable in large part to gains women have made in each of these dimensions.
A Pew Research Study shows that women are treated differently than men by employers. They also seem to make different work-life balance decisions. Here are those results.
The gender wage gap is of concern because it is evidence that we do not have a gender-equal society. But is not just a women’s issue. Like most women’s issues, it’s a family and children’s issue as well. Many families rely on a woman’s income, and some can’t survive or thrive unless she makes a fair wage.
What can we do about the gender wage gap? Enforcing and strengthening existing legislation (such as the Paycheck Fairness Act) and increasing the availability of affordable high-quality childcare would certainly help. Reducing gender occupational segregation is another important part of the solution.
The AAUW suggest that women should pay attention to the salaries associated with college majors and occupations and think about the long-term financial implications of their career decisions. They also recommend that women seek union jobs and do research on typical salaries for a job so that they can better negotiate salary.
However, until the gendered stereotypes that lead to gendered occupational roles diminish even further, until we stop seeing women’s employment and jobs as supplements to a family’s income, until we stop insisting that we can’t support ameliorative efforts because it will “hurt business,” and until we stop devaluing “women’s work” relative to “men’s work,” the gap will persist.
These are ethical concerns because they deal with fundamental issues of fairness. Those who do equal jobs should be paid equally. Those who do unequal jobs should be paid unequally. This basic notion of justice is what underlies my concern that the gender pay gap is not closing fast enough and it could have serious ramifications for the family unit in 2023.
Blog posted by Dr. Steven Mintz, The Ethics Sage, on April 11, 2023. You can sign up for Steve’s newsletter and learn more about his activities on his website (https://www.stevenmintzethics.com/). and by following him on Facebook at: https://www.facebook.com/StevenMintzEthics and on Twitter at: https://twitter.com/ethicssage. Check out professional recommendations on LinkedIn: https://www.linkedin.com/in/steven-mintz-aka-ethics-sage-98268126/.