At this point, unless you avoid the internet entirely, you've probably heard of the term “gender pay gap,” which refers to the fact that on average, a woman’s salary is somewhere between 78 and 82 cents of what the average man makes.
Even though there’s a ton of data demonstrating the gap, it’s a controversial topic because naysayers say it’s difficult to compare apples with apples.
A key part of the controversy is due to the fact that pay is a reflection of a personal choices, as well as social and institutional outcomes. All of these factors make it a rather messy thing to understand and analyze. Seldom do two people have identical job types, educations and work experiences — and rarely do men and women face the same set of cultural norms and social expectations in the world or workplace.
That said, if you’re a victim of the pay gap, it’s worth examining what factors might be causing it. Here are six potential reasons:
According to the American Association of University Women’s most recent study of the gender pay gap, women are earning more college and postgraduate degrees than men. However, comparing college graduates by gender, they found on average, women earned 82% of what men earned just one year after graduation.
Of course, there are important differences in terms of how many women get certain advanced degrees (such as MBAs) or study certain subjects (e.g. engineering and computer science). This ultimately leads to wage differentials because fewer women study these subjects. Getting a degree in STEM for example, logically leads to a higher probability of getting a high paying job in engineering, science and technology.
One study found that married mothers in the workforce had longer job tenure than other groups of women or married men. It called the finding “a quiet revolution in married mothers’ behaviors.” Many employers only grant annual raises as a percentage of your existing salary. This practice tends to mean higher salaries for those who are job hoppers. In fact, one expert concludes that employees who stay at a company for more than two years earn 50% less over their lifetimes.
Harvard Professor Claudia Goldin calls the phenomenon, “non-linearity, or a part-time penalty.” Essentially, the idea is that women who work fewer hours than their male counterparts end up earning less per hour than a full-time worker or worker with less job flexibility. Goldin believes that non-linearity helps explain why most of the gender pay gap occurs within professions such as law, finance and corporate jobs where “employees are incentivized to work double or triple a traditional full-time schedule, because their time is better compensated per hour when they work longer hours.”
Fairygodboss research about what women jobseekers want shows that women, on the whole, do greatly prize flexibility in their jobs. That's why it’s particularly important to be aware of the potential pay tradeoffs if you are someone interested in more job flexibility.
In a paper published by Cornell professors Francine Blau and Lawrence Kahn last year, the largest factor in explaining the difference in wages between men and women were due to “gender differences in employment by industry and occupation.”
While money is only one factor in choosing a job, much less a profession, this is an important thing to keep in mind, especially since discrimination and bias may be leading women into lower-paying occupations in the first place.
In other words, it may not be as simple as just telling women to choose higher paying jobs and industries to work in. If women are discouraged (socially or educationally) from working in those industries, the “choice” of going into any field may be skewed.
The research and data is mixed on this point. Some studies show that women negotiate less when it comes to their job others, while other studies say women ask for raises at the same rate as men, but are simply are less successful in getting them. Regardless of who is right, when anything is this contentious, it’s best to be aware for yourself that negotiation of job offers, raises and bonuses all matter and can add up.
Cornell Professors Blau and Kahn found that 8% of the gender pay gap could not be explained by “measurable factors” such as education levels, job experience, hours and job type and industry. When these factors are accounted for, the gender pay gap does shrink. According to Payscale, controlling for these factors results in the average woman being paid 98 cents for every dollar earned by the average man. However, that stubborn difference remains and bias (conscious or unconscious) is a logical, potential culprit.
While money isn’t everything, it certainly is one of the primary benefits and motivations for those of us who go to work every day. If you're a woman who wants to to earn a lot of money, be aware of how these six factors play a role in how much you get paid.
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