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State of the Wage Gap: How Far We’ve Come in 2017

Posted by Eileen Hoenigman Meyer

Career Advice Expert

April 4, 2017

According to the National Committee on Pay Equity (NCPE), a hypothetical American woman would have to keep working until roughly April 4, 2017, in order to make the same amount of money as a man doing the same work would have made in 2016. And while Equal Pay Day was originated by the NCP in 1996 as a public awareness event to illustrate the gap between men's and women's wages, the fight for pay equality has been raging for decades, and, yes, long before Lily Tomlin, Dolly Parton and Jane Fonda hit the big screen in 9 to 5 in 1980.

As early as 1869, a letter to the editor of the New York Times questioned why female government employees were not paid the same as male ones. "Very few persons deny the justice of the principle that equal work should command equal pay without regard to the sex of the laborer," the letter read. "But it is one thing to acknowledge the right of a principle and quite another to practice it." However, it wasn't until World War II in the 1940's when women flooded the workforce en masse, that the drumbeat for equal pay for equal work began to pick up. Yet real legislation wasn't instituted until President Kennedy signed the Equal Pay Law into effect in1963 followed by the Civil Rights Act of 1964 which prohibited discrimination on the basis of race, origin, color, religion or sex.

Ever since there have been steady strides made and the drumbeat has continued: The Pregnancy Discrimination Act of 1978 protected pregnant employees and the Family and Medical Leave act of 1991 allowed parents regardless of gender to take time off. Then in 2009, President Obama chose the Lilly Ledbetter Fair Pay Act as his first piece of legislation to help address this persistent and unacceptable wage gap.

Slow and steady. Nevertheless, the gender wage gap is still an issue for the American workforce and is seemingly more complex than ever. For one thing, figures indicate that women earn 55, 76 or 95 cents for every dollar their male counterparts earn. This variation seems conflicting, but it’s a mistake to think it renders the numbers invalid. Each figure is true in its context and carries vital implications for millions of Americans.  

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The Gap: By The Numbers

In the study Demystifying the Gender Pay Gap, Glassdoor’s Chief Economist Dr. Andrew Chamberlain analyzed more than 505,000 American workers’ salaries. Chamberlain’s study found that when employees’ salaries are averaged using just two criteria, gender and full-time status, women earn about 76 cents to their male counterparts’ dollar.  

However, comparing workers with similar age, education and years of experience shrinks that gap to 19.2 percent. Further, comparing workers with the same job title, employer and location, the gender pay gap in the U.S. falls to 5.4 percent (94.6 cents per dollar).

While 95 percent is an improvement over 76 percent, a statistically significant and noteworthy gap persists. The US Congress Joint Economic Committee reported:

“Women’s median earnings are lower at every level of education. In fact, women are often out-earned by men with less education: the typical woman with a graduate degree earns $5,000 less than the typical man with a bachelor’s degree.”

Disparities Amongst Women

The committee further notes that, when compared with their white male colleagues, African American women average 60 cents on the dollar while Latinas average 55 cents.  

The committee also explains: “Women ages 18 to 24 earn approximately 88 percent of what their male counterparts earn. However, for most women the gender pay gap grows as they continue in their careers and start families. Today, women ages 45 to 54 typically earn only 70 percent of what their male counterparts earn.”

Location is also important. The American Association of University Women reports a deeper gap in some states; for example, women in New York average 89 percent of their male counterparts’ salaries, while women in Wyoming earn 64 percent.   

A Lasting Impact

The Joint Economic Committee notes that retirement income is largely generated by pensions and social security benefits. The committee finds: “Income of women ages 65 and older ($17,400) is 44 percent less than the median income for men in the same age group ($31,200). As a result of this and other factors, a higher percentage of women than men end up living in poverty after age 65.”

According to the Institute for Women’s Policy Research: “if women in the United States received equal pay with comparable men, poverty for working women would be reduced by half. . .”

Why The Wage Gap Persists

Some dispute the existence of the wage gap, arguing that women tend to be paid less because of career choices they favor. Chamberlain offers a more nuanced take: “The sorting of men and women into different occupations has emerged as one of the main drivers of the gender pay gap—a factor that has little to do to with overt bias and reflects complex social pressures that divert women into some professions and away from others. Additionally, research has shown college major, gender differences in pay negotiation, and gender norms around caregiving and the resulting need for workplace flexibility are all important drivers of the gender pay gap. . . ”

Harvard University Economics Professor and wage gap expert Claudia Goldin, also grants: “It’s hard to find the smoking guns,” meaning that there’s seldom a clear causal link to bias-ridden employers eager to undercut female employees.   

Instead, Goldin identifies another culprit and solution: “The gender gap in pay would be considerably reduced and might even vanish if firms did not have an incentive to disproportionately reward individuals who worked long hours and worked particular hours.”

Strides Towards Change

The beleaguered Paycheck Fairness Act seeks to close loop-holes in the Equal Pay Act by ensuring protection for employees who discuss their pay, providing negotiation training and removing salary history as a requisite for salary negotiations among other objectives. The bill has been repeatedly voted down, but some aspects of the legislation have been adopted on the state level.

Massachusetts recently adopted legislation that the Center for American Progress deemed “one of the strongest equal pay bills in the nation.” It encourages employers to review their compensation practices in the interest of equity, and it makes it illegal to require salary histories to inform salary negotiations. The rationale: If a candidate was unfairly paid previously, this should not impact future compensation.  

New York has also adopted a similar measure prohibiting state entities from requesting salary histories.

Know Where You Stand

Kelly Brooks, Executive Director of Human Resources at Atrium Staffing notes: “Women tend to underestimate their worth and have less confidence in negotiating than their male counterparts.”

Brooks emphasizes that candidates don’t have to share their salary histories. She notes, though, that interviewers want to ensure that both parties are within range. Brooks explains:  

“It won’t be long before other states join MA, but for now simply saying ‘I am looking for a position that meets market value and my experience, skills and abilities’ may only get you so far.  In the meantime, you should prepare to give a salary with support . . . Know market value, highlight special skills and strengths . . . Providing them with a unique ability that puts you above the average is what will help quantify your value.”

Brooks also advises: “Additionally, women should consider what else is important to them that doesn’t equate to base salary but does add to the total compensation package: bonus opportunities, more vacation time, flexible schedule, remote working capabilities, etc.  Most employers have a range that they are willing to pay and so should you.”

Looking Towards the Near Future

CNN’s Kate Bennett referred to Ivanka Trump, Assistant to the President, as “the loudest voice for women's issues in her father's administration.” At the 2016 Republication National Convention, Trump stated:

“As President, my father will change the labor laws that were put into place at a time when women were not a significant portion of the workforce. . . Politicians talk about wage equality, but my father has made it a practice at his company throughout his entire career.”

At the convening of the newly-forged  United States-Canada Council for Advancement of Women Entrepreneurs and Business Leaders, President Trump remarked: “We must ensure that our economy is a place where women can work and thrive.”

The new administration’s specific plans, however, remain to be seen.

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