The Gender Wage Gap is Narrowing — But This Penalty Could Harm That Progress

unequal pay

Canva / Fairygodboss Staff

Profile Picture
Fairygodboss
May 21, 2024 at 7:54PM UTC

Equal pay for equal work doesn’t necessarily feel like a pipe dream anymore — but that doesn’t mean it’s nearing reality, either. 

In the last seven years, the gender wage gap has narrowed by two cents to 82 cents for every dollar. Payscale’s 2022 Gender Pay Gap Report shows that the controlled wage gap — which measures median salaries for men and women with the same job and qualifications — is even narrower, at 99 cents for every dollar. 

For working women everywhere, these numbers seem to illustrate a slow, but welcome, progress in the journey toward pay equity. 

But there’s a penalty — one that disproportionately affects women — whose effects on the pay gap are still left to be seen.

That penalty is the unemployment penalty: the difference in pay between someone who is unemployed vs. someone who is employed. Those who have been unemployed before landing a job tend to see lower wages when they do land a job, compared to someone who was already employed when they took the new job. 

“Economists refer to this phenomenon as ‘unemployment scarring’, given the body of evidence that show interruptions to employment have both an immediate and sustained negative impact on earnings,” Payscale’s report states. 

And who was disproportionately more unemployed during the COVID-19 pandemic? Women. 

Women lost 63% of jobs lost from February 2022 to January 2022. And many left to take care of their families; the Bureau of Labor Statistics shows that more women than men left the workforce in 2020 and 2021 because of familial responsibilities. 

Now, as many women try to return to work, they may be facing the unemployment penalty — and getting penalized for their time off with lower starting salaries.

The longer these women stay out of work, the more the wage penalty increases. The uncontrolled gender pay gap is 79 cents for every dollar when a woman has been unemployed for 3-6 months; this becomes 70 cents for every dollar when they’ve been unemployed for more than two years.

So yes, we’re making progress on pay equity — salary transparency laws, company pay equity analysis, and even mentorship and negotiation practices to help women land equal pay for equal work all can help narrow the gap. But we can’t forget the over a million women who have yet to return to the workforce — the ones who are already at a disadvantage because of the unemployment penalty, because they lost their jobs or had to leave the workforce to take care of their families during an already difficult time. 

It’s time to stop worrying about career gaps and unemployment, and instead focus on qualifications and inclusion — so all women can get paid what they deserve.

--

This article reflects the views of the author and not necessarily those of Fairygodboss.

What is your company doing (or what do you wish they were doing) to ensure equal pay? Share your answer in the comments to help other Fairygodboss members!

Why women love us:

  • Daily articles on career topics
  • Jobs at companies dedicated to hiring more women
  • Advice and support from an authentic community
  • Events that help you level up in your career
  • Free membership, always