Will 2021 Widen the Gender Pay Gap? Experts Worry ‘Yes'

It’s obvious that the COVID pandemic has been hard on everyone, in terms of both our personal lives and working lives. But some demographics are suffering more than others. Of the unemployment 144,000 jobs lost in December 2020, the vast majority were lost by women, in particular Women of Color, according to The New York Times. 

Unemployment and underemployment aren’t the only ways women are being negatively affected in their careers during this period of dramatic upheaval. The gender pay gap persists and is showing signs of increasing, rather than decreasing, in the future. 

The 2020 pay gap

According to PayScale’s annual The State of the Gender Pay Gap report, in 2020, women made $0.81 for every dollar made by a man. This is sobering for several reasons, not the least of which is the fact that this figure increased by only seven cents between 2015 and 2020. 

The report also found that the pay gap varied by profession and is larger for women in some professions than others. For example, sales representatives earned $0.90 for every male dollar, while female anesthesiologists made $0.83 to the male dollar. Meanwhile, women nurses make $0.98 to every dollar a male nurse earns. (Generally speaking, in professions in which women constitute the majority, the pay gap is narrower, though still present.)

But even what women and women with the same “employment characteristics,” such as the same qualifications, have similar jobs, the pay gap is 2% — that is, women make $0.98 to every male dollar. And between 2019 and 2020, that gap did not narrow at all. 

PayScale notes that their research shows that women frequently are penalized in terms of salary when they take leave, and this is true for women in roles that have been hit hard by the COVID-19 pandemic.

While people often attribute the gender pay gap solely to women taking breaks to have children or manage family responsibilities, this is an oversimplification and ignores the very real factors like sexism, gender discrimination and unconscious bias in the workplace. This is clear from the fact that women with the same qualifications as their male counterparts earn 2% less on average. It’s difficult to measure the impact of intangible factors like these, but it’s obvious that they haven’t abated. 

The impact of race and ethnicity

While women of all races and ethnic groups earn less on average than white men, some groups are at even more of a disadvantage. The pay gap is largest for American Indian and Alaska Native, Black or African American and Hispanic women — they earn $0.75 per dollar a white man earns (for uncontrolled data). White women, on the other hand, earn $0.81 per the white man’s dollar, while Asian women earn $0.98 for every dollar a white man makes.

When the data are controlled, meaning the sets compare the earnings of people with the same qualifications, the gap is narrower, although race still plays a role, with black women making $0.97 per every dollar white men make and Hispanic and white women earning $0.98 in the same situation. Asian women, however, earn $1.02 per dollar a white man makes.

Ultimately, the PayScale report finds, the wage gap is particularly wide for Black of African American women, American Indian and Alaskan Native women and Hispanic women at the individual contributor level (uncontrolled group).

Will the gender pay gap persist through 2021?

Unfortunately, the answer is most likely yes. 

The COVID-19 pandemic has affected women’s careers far more than those of men, prompting some to call it a “she-cession.” Many women have had to assume family responsibilities, including taking care of children who are learning from home rather than going to school. A July 2020 survey of 1,500 working people, conducted by Perceptyx, found that mothers who work are almost twice as likely to assume all of the child care responsibilities during the workday as working fathers.

In heterosexual couples in particular, women have been less likely to continue working because they have had to assume additional childcare responsibilities. The National Bureau of Economic Research (NBER) reports that while typical recessions close the gender gap by 2%, the pandemic recession increased it by 5%.

Brain Kropp, the Chief of Research for the Gartner HR practice, also believes the gender pay gap will persist through this year. 

"According to a recent Gartner survey, 64 percent of managers believe that office workers are higher performers than remote workers, and in turn are likely to give in-office workers a higher raise than those who work from home," he said. And because women are disproportionately tasked with childcare and family responsibilities — and therefore need flexibility — they are being unfairly penalized.

"If men are more likely to work from the office, and managers retain a bias toward in-office workers, we should expect to see managers over-rewarding male employees at the expense of female employees, worsening the gender wage gap at a time when the pandemic has already had a disproportionate impact on women," Kropp added.

Women who are used to working in high-level jobs that were previously entirely in-person and with long hours may need to seek out more flexible positions that allow them to work from home at least sometimes, which could mean a pay cut. Some may need to take time off from their jobs entirely, and, according to the NBER study, it will take years to compensate for the depreciation of skills.

Moreover, women have faced disproportionate job loss because of their presence in service sectors like travel, leisure, personal care, hospitality and restaurants is relatively high — and many of these organizations and businesses have suffered substantially during the pandemic.

How can the gap be closed?

1. Raise the minimum wage.

While many states have higher minimum wages, the current federal minimum wage is $7.25 and has remained so for well over a decade. President Joe Biden had previously attempted to include a provision to raise the minimum wage to $15 per hour as part of the proposed February 2021 $1.9 trillion coronavirus relief package, but on February 25, 2021, Senate parliamentarian Elizabeth MacDonough ruled that this provision would need to be passed as a separate, standalone bill. As of March 2021,  a bill has not been passed. 

But an increase in the current federal minimum wage would not only help the economy recover and raise the pay of nearly 32 million workers, according to the Economic Policy Institute (EPI), but it would also help close the gender pay gap. The EPI finds that a majority — 59% — of workers who would be affected are women. People of color would also disproportionately benefit from a raise in the minimum wage. 

2. Provide flexible work arrangements.

If the past year has shown us anything, it’s that we all need to be flexible — and that includes businesses of all types. Since the fact remains that women are assuming the lion’s share of childcare and other family responsibilities, employers proactively offer flexibility in terms of work arrangements and take other measures to accommodate the challenges employees, women in particular, are facing. Many employers unfairly and inaccurately believe remote workers are less productive, when, in fact, a wide body of research shows that the opposite is true. 

Providing more flexible options, including continuing to allow employees to continue to work from home even after safety concerns subside to an extent, will be a critical step toward closing the gender wage gap.

3. Identify and acknowledge the problem.

Employers must be proactive in addressing this and other inequities in the workplace. This starts by taking a good, hard look at the policies and procedures they have in place that could be contributing to discrimination. Go through data on promotions and raises at your business to see if there are problems in terms of representation and unfair practices taking place. Examine hiring practices and performance reviews. Talk to employees, too. Acknowledge that the problem exists; this is an essential step in addressing it.

Make this a continual process. When a problem is pervasive, fixing it is not a quick or easy process, and it will take work over time.

4. Offer new opportunities.

Employers should also take strides to provide ample opportunities that set women up to succeed in their careers. Employee resource groups (ERGs) and diversity committees are examples of ways to help women advance into leadership positions and have a stronger voice in their organizations and industries. 

If things continue as they have been, it will take another 100 years to close the gender pay gap, according to the Global Gender Gap Report. COVID-19 has set us back in our effort to achieve gender equality in the workplace.

But despite this sobering outlook, there could be some good news on the horizon. According to the NBER study, while the pandemic is negatively affecting women in their careers in the short and medium-term, it could help close gender gaps in the long term. 

They note, for example, that the percentage of husbands serving as primary childcare providers is growing, and more and more employers are embracing longer-term flexible work arrangements. 

“Together, these changes imply that the ‘new normal’ after a pandemic recession will see a higher share of women in the labor force and a lower gender wage gap compared to the pre-recession economy,” the authors write.

Of course, this will require attention and intervention from those in a position to effect real change — from lawmakers to employers to workers themselves.