The Gender Pay Gap: Does It Exist And Why Should I Care?
In 2022, women made 83 cents for every dollar earned by men, according to the U.S. Census Bureau (study based on median wages for full-time, year-round workers 15 years and older). March 14th, 2023 marks Equal Pay Day which raises awareness about the issue of the gender pay gap and seeks to mobilize communities to take action to help resolve the gap. The date of Equal Pay Day changes each year as it is determined by the date during the new year that women have to work into the year to make as much as men during the previous year.
While the overall pay gap is 17%, that gap shrinks dramatically to 1% if it is corrected for men and women doing the same jobs and level of qualification. So, it seems that women are paid almost the same amount as men when the population is controlled, but what’s behind the greater pay difference in the uncontrolled data? Why are women paid less and performing lower-paid jobs?
Let’s start with some numbers. It’s estimated that women perform 76% of the total hours of unpaid care work related to their family. Furthermore, 42% of women are outside of the paid workforce due to the need to fulfill unpaid care work compared to only 6% of men. This gap is far greater for women of color. Clearly, there is a disparity in the number of hours men and women are spending on unpaid work which has an effect on reducing the hours that women are available for paid work, or simply limits the energy they have to pursue a career or a higher paying job.
Read more: Women’s History And Finance
Furthermore, the impact of the pandemic has disproportionately affected total wages of women compared to men. The pressures of the pandemic on women’s wages means that the already existing gender pay gap risks are being widened. Families were suddenly forced to help school their children remotely, lost access to childcare, and lost their jobs as the world shut down during the pandemic. Women were among the worst affected by the pandemic, in terms of job security, hardest hit job sectors, and division of family responsibilities. Overall, the pandemic threatened to reverse decades of progress made toward gender pay equality.
Since President Kennedy signed the Equal Pay Law in 1963 when women earned 61 cents for every dollar a man-made, there has been slow progress in closing the gap with very little change in the last 15 years. Since the early 60s, women have made great strides in both education and work experience, which is generally rewarded with higher pay. In fact, more women are enrolled in college than men which should, in theory, have helped bring the gender pay gap closer to being balanced. This has not been the case.
Women face three hurdles in the equal pay race; job type, unpaid family workload, and discrimination. Women are overrepresented in lower-paying service jobs compared to men. Women also assume more unpaid family care responsibilities than men do, impacting the time and energy they have available to them for paid work and career progression. Research suggests that younger women begin their careers earning as much as their male peers, but that as they age, the pay gap widens as they take on more familial responsibilities. In 2000, the typical woman 16 to 29 years old working full time and year-round earned 88% of a similar man’s wages. By 2019, when they were ages 35 to 48, women were earning just 80% of their male peers.
Approximately 42% of working women have experienced gender discrimination at work, nearly twice the number of men, according to a 2017 Pew survey. That included earning less money, being treated as if incompetent, being passed over for promotions and important assignments, and receiving less support from management.
The consequences of the gender pay gap are felt across all life stages of women. Lower pay contributes to lower lifetime earnings and less overall wealth. The average woman earns approximately $10,000 less per year than her male counterpart. Extrapolated over a 40-year work life, that is $400,000 less than men. The impact on retirement savings, lifestyle, and general financial health is significant.
The gender wage gap will not be resolved without deliberate action. These actions must address the blind biases of the workplace, helping to increase the financial security of women and their families. A combination of public policy, and a shift in cultural biases that devalue women in the workforce and confine them to specific gender roles will gradually close this stubborn gap.
Lori Stratford is the Digital Media Manager at Navicore Solutions. She promotes the reach of Navicore's financial education to the public through social media and blog content.
You can follow Navicore Solutions on Facebook, Twitter, LinkedIn and Pinterest. We'd love to connect with you.