"Happy" UN-EQUAL Pay Day!! Today, April 10th, is Equal Pay Day and we have a lot to talk about.
What is "Equal Pay Day" you ask? Equal Pay Day symbolizes how far into the year women must work to earn what men earned in the previous year. Equal Pay Day was originated by the National Committee on Pay Equity (NCPE) in 1996 as a public awareness event to illustrate the gap between men's and women's wages.
ALSO, it is important that we discuss the fact that, because race/ethnicity also impact women's wages, this Equal Pay Day is symbolic of White Women's wages (80%):
July 31 – Black/African American Women’s Equal Pay Day (63%)
September 25 – Native American Women’s Equal Pay Day (59%)
November 2 – Latina Women’s Equal Pay Day (54%)
I had the distinct pleasure of giving a presentation on AAUW's research study, "A Simple Truth", available for free download here, alongside AAUW California's Lobbyist Shannon Smith Crowley and City of Sacramento's Councilwoman Angelique Ashby on Saturday (04/04/18). It was such a phenomenal program! But I'd be remiss if I didn't put something up here as well.
So let's talk about Equal Pay and the Gender Wage Gap.
I know there are still many people think that the Gender Wage Gap is "fake", that it's made up, or a misrepresentation of the labor and wage climate in the U.S. But it's not. We're going to talk about all of the things that make up the Wage Gap and break it down, piece by piece.
First, let's talk about AAUW's (American Association of University Women) research study, since that's what I'm basing my numbers on. The study has also been replicated by other institutions.
The Simple Truth about the Gender Pay Gap was written by former AAUW Vice President of Research Catherine Hill, Ph.D., in 2011. It was substantially revised by Senior Researcher Kevin Miller, Ph.D., and former Research Associate Kathleen Benson in 2016. Former Vice President of Government Relations Lisa Maatz and State Policy Manager Kate Nielson, J.D., wrote the section on federal and state policies. An updated/current 2018 version is available by clicking on the link above.
WHERE DO THE DATA COME FROM?
Federal agencies such as the U.S. Census Bureau, the U.S. Department of Education, and the U.S. Bureau of Labor Statistics conduct surveys of individuals, households, and businesses to gather information about people’s salaries and other earnings. Most reports on national workforce participation, pay, and pay differences depend on data from the Current Population Survey (CPS) (www.census.gov/cps), the country’s primary source of labor force statistics. The CPS is a monthly survey with a sample of 100,000 households sponsored jointly by the Census Bureau and the Bureau of Labor Statistics (U.S. Census Bureau, 2016).
So let's get down to it.
What is the Gender Pay Gap?
The gender pay gap is a comparison of women’s and men’s median earnings. Median earnings are typical, not average, earnings. Looking at the salaries of all women and men working full time, the median is the number in the middle of the group. We often say “typical” to refer to median because it is the person “right in the middle.” Half the people earn more, and half earn less. (Why not use averages? Because very high earnings can pull up the average, but they don’t pull up the middle point in the same way. Average wages tend to be higher than median wages.)
The calculation of the earnings ratio and the pay gap is simple:
Earning Ratio= women's median wages divided by men's median wages, which equal a percent.
Pay Gap= men's median wages subtracted by women's median wages divided by men's median wages.
The Pay Gap Over Time
While the pay gap has steadily narrowed over time, it is nowhere near being eliminated, and in recent years progress has actually stalled. The gap has narrowed since 1960, due largely to women’s progress in education and workforce participation and to men’s wages rising at a slower rate.
At the rate of change between 1960 and 2016, women are expected to reach pay equity with men in 2059. If change continues at the slower rate seen since 2001, women will not reach pay equity with men until 2119.
The Pay Gap & Race/Ethnicity
The pay gap affects women from all backgrounds, but its effects vary among different demographics. The chart shown here lays out the pay gap by race and ethnicity among full-time workers in 2016.
The calculation of the earnings ratio and the pay gap is simple:
Earning Ratio= women's median wages divided by men's median wages, which equal a percent.
Pay Gap= men's median wages subtracted by women's median wages divided by men's median wages.
The Pay Gap Over Time
While the pay gap has steadily narrowed over time, it is nowhere near being eliminated, and in recent years progress has actually stalled. The gap has narrowed since 1960, due largely to women’s progress in education and workforce participation and to men’s wages rising at a slower rate.
At the rate of change between 1960 and 2016, women are expected to reach pay equity with men in 2059. If change continues at the slower rate seen since 2001, women will not reach pay equity with men until 2119.
The Pay Gap & Race/Ethnicity
The pay gap affects women from all backgrounds, but its effects vary among different demographics. The chart shown here lays out the pay gap by race and ethnicity among full-time workers in 2016.
You can see that among workers who are Hispanic, black, American Indian and Alaskan Native, and Native Hawaiian and other Pacific Islander, both women and men had lower median earnings than workers who are non-Hispanic white or Asian.
Women were paid less than men were within each racial and ethnic group, and the pay gaps between men and women within group was smaller among black, Hispanic, and American Indian and Alaska Native workers compared with the within-group gaps among white and Asian workers.
It is clear from the chart, however, that this smaller gender pay gap among these groups is due solely to the fact that the men in these groups were paid substantially less than non-Hispanic white and Asian men were paid in 2016.
Asian and white women typically were paid more than other women, and Asian men were paid the highest wages of any group.
The Pay Gap in Comparison to White Men's Earnings
Using a single benchmark provides a more informative picture. Because non-Hispanic white men are the largest demographic group in the labor force, they are often used for that purpose.
Compared with salary information for white male workers, Asian women’s salaries show the smallest gender pay gap, with an earnings ratio of 87 percent of white men’s earnings. For White women, the pay gap was 79% and 63% for Black women. The gap was largest for Latina and Hispanic women, who were paid only 54 percent of what white men were paid in 2016.
The Pay Gap by Age
The pay gap is narrow among younger women and men, but it increases for workers of middle age and older.
For example, in this chart, you can see that among young people ages 16–34, women are paid close to the same amount that men are paid.
In the peak earning years of 35–64, in contrast, women are paid between 74 and 83 percent of what men are paid.
The Pay Gap by Education
While earnings tend to increase with education level, education does not eliminate the pay gap. The pay gap exists at all levels of education and, in some cases, is larger at higher levels of education.
For example, this chart shows that women with less than a high school diploma were paid 77 percent of what their male peers were paid in 2016, whereas women with advanced degrees were paid only 74 percent of what men with advanced degrees were paid.
The Pay Gap, Disability, and LGBTQ People
Disability status is a challenging population demographic to capture because it covers many definitions. In the current American Community Survey (ACS) questionnaire disability is measured by answering questions related to six disability types: hearing, vision, cognitive, ambulatory, self-care, and independent living.
According to the ACS, in 2016 people with disabilities made just 68 percent of what people without disabilities made. And among people with disabilities, the gender pay gap is substantial: Median pay for women with disabilities is 72 percent that of men with disabilities.
According to a Williams Institute study of Census Bureau data, eliminating the gender pay gap would significantly mitigate the poverty rates for any couple that includes at least one woman, creating benefits for women and their families regardless of sexual orientation.
When we analyze the gender pay gap, it’s also important to include people who do not identify with the gender they were assigned at birth. The Williams Institute estimates that 1.4 million adults in the United States identify as transgender. Preliminary evidence from the National Transgender Discrimination Survey also suggests that people who transition from male to female gender expression experience a drop in pay after the transition, while those who transition from female to male gender expression see no difference in pay or even a small increase.
What Causes the Gender Wage Gap?
The pay gap itself is more complicated than a single number, since it summarizes a huge diversity of women and life circumstances. The origins of the pay gap are also more complicated than a single cause.
Women and men have always participated in the workforce in different ways—and have been treated differently by employers—and though those differences have shrunk over time, they still contribute to women being paid less than men.
One major cause of the gender pay gap is what researchers call occupational segregation, the tendency for men and women to work in different fields with different levels of compensation.
Another substantial cause of the gender pay gap is different patterns of work. Women tend to work fewer hours, are more likely to take time away from the workforce to care for family, and are more likely to need flexible work schedules.
In addition to these factors, research evidence points to the impact of bias and discrimination on women’s pay relative to that of men. Let’s look a little more closely at these three factors: occupational segregation, work patterns, and gender bias.
The Pay Gap Across Occupations
In nearly every line of work, women face a pay gap. Among the many occupations studied by the Bureau of Labor Statistics, women’s earnings are higher than men’s in only a handful.
Jobs traditionally associated with men (like computer programming and aerospace engineering) tend to pay better than traditionally “female” jobs (like nursing and administrative support). Even in jobs where the same level of skill is required, jobs associated with men tend to pay more. Parking lot attendants, who are predominantly men, are paid more on average than child care workers, who are predominantly women, even though child care workers are increasingly required to obtain post-secondary education.
Over the past 50 years, women have started to enter jobs that were once occupied almost entirely by men, but women and men still tend to work in different kinds of jobs. This segregation by occupation is a major factor behind the pay gap. But it’s not the whole story.
Schedules & Parenting
Women are more likely to leave the workforce or work part time when they have young children. 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.” Women also tend to work fewer hours than men, even when they work full time. (Full-time work is defined by the Bureau of Labor Statistics as 35 hours a week or more.)
Gender Discrimination & Bias
Choice of occupation and different patterns of work account for some of the differences in salaries, but they aren’t the whole story.
In 2015, despite making up almost half the workforce, women held only 26 percent of private-sector executive positions, with women of color particularly unlikely to hold such positions. (For more information on the leadership gap, see AAUW’s 2016 report Barriers and Bias: The Status of Women in Leadership.)
So how do we know that discrimination and bias affect women’s pay? Studies have found that as women enter an industry, wages in that industry drop, even for men. 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 such as college major, occupation, work hours, and time out of the workforce.
The 2012 AAUW report Graduating to a Pay Gap: The Earnings of Women and Men One Year after College Graduation examines this question. After accounting for the issues raised above as well as others, the study found that there was a 7 percent difference in the earnings of women and men one year after college graduation that was still unexplained. Studies by other researchers have found similar unexplained gaps.
Federal Public Policy
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.
With AAUW’s support, President Barack Obama signed the Lilly Ledbetter Fair Pay Act into law on January 29, 2009. This law lengthens the time period in which employees can bring legal action for pay discrimination lawsuits. It clarifies that pay discrimination can occur when a pay decision is made, when an employee is subject to that decision, or at any time that an employee is injured by it.
Other pending legislative measures include the Paycheck Fairness Act, the Fair Pay Act, and the Pay Equity for All Act, which would expand fair pay protections and strengthen enforcement efforts.
On Equal Pay Day in 2014, Obama signed two AAUW-supported executive orders addressing pay discrimination and subsequently worked to add regulations to increase pay protections. However, in 2017 President Donald Trump rescinded several equal pay protections, including rolling back requirements for federal contractors to comply with labor and civil rights laws and halting implementation of a data collection tool to increase wage transparency.
Federal budgets need to ensure adequate enforcement of all civil rights laws through sufficient funding and staffing of the Equal Employment Opportunity Commission, the Office of Federal Contract Compliance Programs, and the various civil rights divisions. The Department of Labor’s Women’s Bureau, the only federal agency devoted to the concerns of women in the workplace, should be fully funded to continue its important work on fair pay issues.
Equal Pay in the States
In addition to complying with the 1963 Equal Pay Act, a federal law that prohibits gender-based discrimination in the payment of wages, most states also have some kind of additional equal pay law.
Currently, two states—Alabama and Mississippi—have no state pay equity or sex-based employment discrimination regulations. All other states have at least some basic equal pay protections. But roughly one-third of states also have major loopholes in those protections that allow employers to continue to pay women less than their male peers.
Although many states have some equal pay regulations, few state laws include the necessary details to help employers and courts establish and enforce fair pay. AAUW advocates for all states to pass and enforce equal pay laws in addition to developing other innovative ideas that chip away at the gap. Learn more about equal pay in your state at www.aauw.org/resource/state-equal-pay-laws
So What Can We Do?
The pay gap is real and pervasive, and it affects all women. There is no one silver bullet to fix the problem. Rather, individuals, employers, and communities need to take action.
The best place to start is AAUW’s page on fair pay advocacy, fightforfairpay.org.
AAUW is involved in finding solutions at all levels, including helping women get the pay they deserve immediately. Their salary negotiation workshops are designed to give women the tools and confidence they need to make a change for themselves. You can find out how to bring a workshop to your community at salary.aauw.org.
Women were paid less than men were within each racial and ethnic group, and the pay gaps between men and women within group was smaller among black, Hispanic, and American Indian and Alaska Native workers compared with the within-group gaps among white and Asian workers.
It is clear from the chart, however, that this smaller gender pay gap among these groups is due solely to the fact that the men in these groups were paid substantially less than non-Hispanic white and Asian men were paid in 2016.
Asian and white women typically were paid more than other women, and Asian men were paid the highest wages of any group.
The Pay Gap in Comparison to White Men's Earnings
Using a single benchmark provides a more informative picture. Because non-Hispanic white men are the largest demographic group in the labor force, they are often used for that purpose.
Compared with salary information for white male workers, Asian women’s salaries show the smallest gender pay gap, with an earnings ratio of 87 percent of white men’s earnings. For White women, the pay gap was 79% and 63% for Black women. The gap was largest for Latina and Hispanic women, who were paid only 54 percent of what white men were paid in 2016.
The Pay Gap by Age
The pay gap is narrow among younger women and men, but it increases for workers of middle age and older.
For example, in this chart, you can see that among young people ages 16–34, women are paid close to the same amount that men are paid.
In the peak earning years of 35–64, in contrast, women are paid between 74 and 83 percent of what men are paid.
The Pay Gap by Education
While earnings tend to increase with education level, education does not eliminate the pay gap. The pay gap exists at all levels of education and, in some cases, is larger at higher levels of education.
For example, this chart shows that women with less than a high school diploma were paid 77 percent of what their male peers were paid in 2016, whereas women with advanced degrees were paid only 74 percent of what men with advanced degrees were paid.
The Pay Gap, Disability, and LGBTQ People
Disability status is a challenging population demographic to capture because it covers many definitions. In the current American Community Survey (ACS) questionnaire disability is measured by answering questions related to six disability types: hearing, vision, cognitive, ambulatory, self-care, and independent living.
According to the ACS, in 2016 people with disabilities made just 68 percent of what people without disabilities made. And among people with disabilities, the gender pay gap is substantial: Median pay for women with disabilities is 72 percent that of men with disabilities.
According to a Williams Institute study of Census Bureau data, eliminating the gender pay gap would significantly mitigate the poverty rates for any couple that includes at least one woman, creating benefits for women and their families regardless of sexual orientation.
When we analyze the gender pay gap, it’s also important to include people who do not identify with the gender they were assigned at birth. The Williams Institute estimates that 1.4 million adults in the United States identify as transgender. Preliminary evidence from the National Transgender Discrimination Survey also suggests that people who transition from male to female gender expression experience a drop in pay after the transition, while those who transition from female to male gender expression see no difference in pay or even a small increase.
What Causes the Gender Wage Gap?
The pay gap itself is more complicated than a single number, since it summarizes a huge diversity of women and life circumstances. The origins of the pay gap are also more complicated than a single cause.
Women and men have always participated in the workforce in different ways—and have been treated differently by employers—and though those differences have shrunk over time, they still contribute to women being paid less than men.
One major cause of the gender pay gap is what researchers call occupational segregation, the tendency for men and women to work in different fields with different levels of compensation.
Another substantial cause of the gender pay gap is different patterns of work. Women tend to work fewer hours, are more likely to take time away from the workforce to care for family, and are more likely to need flexible work schedules.
In addition to these factors, research evidence points to the impact of bias and discrimination on women’s pay relative to that of men. Let’s look a little more closely at these three factors: occupational segregation, work patterns, and gender bias.
The Pay Gap Across Occupations
In nearly every line of work, women face a pay gap. Among the many occupations studied by the Bureau of Labor Statistics, women’s earnings are higher than men’s in only a handful.
Jobs traditionally associated with men (like computer programming and aerospace engineering) tend to pay better than traditionally “female” jobs (like nursing and administrative support). Even in jobs where the same level of skill is required, jobs associated with men tend to pay more. Parking lot attendants, who are predominantly men, are paid more on average than child care workers, who are predominantly women, even though child care workers are increasingly required to obtain post-secondary education.
Over the past 50 years, women have started to enter jobs that were once occupied almost entirely by men, but women and men still tend to work in different kinds of jobs. This segregation by occupation is a major factor behind the pay gap. But it’s not the whole story.
Schedules & Parenting
Women are more likely to leave the workforce or work part time when they have young children. 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.” Women also tend to work fewer hours than men, even when they work full time. (Full-time work is defined by the Bureau of Labor Statistics as 35 hours a week or more.)
Gender Discrimination & Bias
Choice of occupation and different patterns of work account for some of the differences in salaries, but they aren’t the whole story.
In 2015, despite making up almost half the workforce, women held only 26 percent of private-sector executive positions, with women of color particularly unlikely to hold such positions. (For more information on the leadership gap, see AAUW’s 2016 report Barriers and Bias: The Status of Women in Leadership.)
So how do we know that discrimination and bias affect women’s pay? Studies have found that as women enter an industry, wages in that industry drop, even for men. 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 such as college major, occupation, work hours, and time out of the workforce.
The 2012 AAUW report Graduating to a Pay Gap: The Earnings of Women and Men One Year after College Graduation examines this question. After accounting for the issues raised above as well as others, the study found that there was a 7 percent difference in the earnings of women and men one year after college graduation that was still unexplained. Studies by other researchers have found similar unexplained gaps.
Federal Public Policy
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.
With AAUW’s support, President Barack Obama signed the Lilly Ledbetter Fair Pay Act into law on January 29, 2009. This law lengthens the time period in which employees can bring legal action for pay discrimination lawsuits. It clarifies that pay discrimination can occur when a pay decision is made, when an employee is subject to that decision, or at any time that an employee is injured by it.
Other pending legislative measures include the Paycheck Fairness Act, the Fair Pay Act, and the Pay Equity for All Act, which would expand fair pay protections and strengthen enforcement efforts.
On Equal Pay Day in 2014, Obama signed two AAUW-supported executive orders addressing pay discrimination and subsequently worked to add regulations to increase pay protections. However, in 2017 President Donald Trump rescinded several equal pay protections, including rolling back requirements for federal contractors to comply with labor and civil rights laws and halting implementation of a data collection tool to increase wage transparency.
Federal budgets need to ensure adequate enforcement of all civil rights laws through sufficient funding and staffing of the Equal Employment Opportunity Commission, the Office of Federal Contract Compliance Programs, and the various civil rights divisions. The Department of Labor’s Women’s Bureau, the only federal agency devoted to the concerns of women in the workplace, should be fully funded to continue its important work on fair pay issues.
Equal Pay in the States
In addition to complying with the 1963 Equal Pay Act, a federal law that prohibits gender-based discrimination in the payment of wages, most states also have some kind of additional equal pay law.
Currently, two states—Alabama and Mississippi—have no state pay equity or sex-based employment discrimination regulations. All other states have at least some basic equal pay protections. But roughly one-third of states also have major loopholes in those protections that allow employers to continue to pay women less than their male peers.
Although many states have some equal pay regulations, few state laws include the necessary details to help employers and courts establish and enforce fair pay. AAUW advocates for all states to pass and enforce equal pay laws in addition to developing other innovative ideas that chip away at the gap. Learn more about equal pay in your state at www.aauw.org/resource/state-equal-pay-laws
So What Can We Do?
The pay gap is real and pervasive, and it affects all women. There is no one silver bullet to fix the problem. Rather, individuals, employers, and communities need to take action.
The best place to start is AAUW’s page on fair pay advocacy, fightforfairpay.org.
AAUW is involved in finding solutions at all levels, including helping women get the pay they deserve immediately. Their salary negotiation workshops are designed to give women the tools and confidence they need to make a change for themselves. You can find out how to bring a workshop to your community at salary.aauw.org.
Studies (and the Financial Women's Association) show that the amount of money women lose because of the pay gap is an average loss of nearly $530,000 in wages over her lifetime. And if you thought that was bad, you may want to skip over this next line because those of us who thought continuing onto college and receiving a higher education would benefit us are noted for earning $800,000 less over their lifetimes than equally qualified men. Surprising, right?!
THAT'S A LOT OF MONEY BEING LOST BASED ON DISCRIMINATION. We need to take action to stop further bias and level the playing field. Equal Pay for Substantially Equal Work is crucial.
Not only that, but the Pay Gap affect all women, of all races. Women are about HALF THE WORKFORCE, which means that HALF of ALL WORKERS in the Nation are being underpaid BASED ON THEIR SEX (& RACE).
SO LET'S PUSH FOR CHANGES!! IN OUR COMMUNITIES, IN OUR STATE, IN OUR NATION, AND WORLD WIDE. WE CAN DO THIS, BUT WE HAVE TO BE UNIFIED.
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