EverythingPeople This Week!

Published on Tuesday, April 10, 2018

Is The Gender Pay Gap Real?

Author: Heather Nezich

Yesterday, April 10, was Equal Pay Day, which means that women had to work all of 2017 and until April 10, 2018 to equate to what men made in just 2017.  On average, women in the U.S. are paid 20% less than men according to the Institute for Women’s Policy Research. This research prompted Lean In, a nonprofit founded by Sheryl Sandberg to empower all women to achieve their ambitions, to start a new hashtag, #20percentcounts.

Corporations such as Adidas, Lyft, P&G, and Reebok have joined in on the #20percentcounts movement with customer messaging that supports awareness of the gender pay gap.  “We’re proud to stand shoulder to shoulder with companies that are committed to pay equity and setting a new standard for workplace equality,” states Sheryl Sandberg, founder of Lean In.

The 20% pay gap between men and women means that for every $1.00 a male earns, their female counterpart earns only $.80.  Surprisingly, the gap widens at higher education levels.  Females with an advanced degree make 26% less than males with the same degree.   If you add race into the mix, the disparity is even greater.  Black women make 38% less than white mean, and Latinas make 46% less. 

If the pay gap were closed, 3.1 million working women and their families would be lifted from poverty.  Women compose nearly half of the U.S. workforce, are the sole or co-breadwinner in 50% of U.S. families, and receive more college and graduate degrees than men. 

The American Association of University Women’s (AAUW’s) The Simple Truth about the Gender Pay Gap seeks to explain the pay gap and how it affects women.  Discrimination is not be responsible for 100% of the pay gap.  So, what causes the pay gap?

Occupational Segregation - Women and men tend to choose different majors in college and to work in different occupations after college.

·        Even in jobs where the same level of skill is required, jobs associated with men tend to pay more.

·        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.

·        Some examples of pay gaps by occupation include:

o   Software Developers – women earn 88% of what men earn

o   Food Service Managers – women earn 74% of what men earn

o   Social Workers – women earn 85% of what men earn

Patterns of Work - Women tend to work shorter hours and require more flexible schedules, and women are more likely than men to care for 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.”

·        Fathers, on the other hand, do not suffer a penalty compared with other working men. Many dads actually receive higher wages after having a child, known as the “fatherhood bonus.”

Bias and Discrimination - Women do experience gender bias and discrimination that are likely responsible for a significant pay gap, even after controlling for other factors.

·        Fewer women ascend the highest positions of leadership than men.

·        Discrimination and bias are responsible for gender pay gaps of 6-12%.


Public policy continues to address this issue with such efforts as the Lilly Ledbetter Fair Pay Act, The Paycheck Fairness Act, The Fair Pay Act, The Pay Equity for All Act, and other executive orders, regulations, and enforcement efforts.  As mentioned in another article in today’s EPTW, a federal court of appeals ruled Monday that salary history cannot be considered as a factor to justify wage inequalities between men and women.  Pay should be based on skills, education, market data, and experience; not previous salary, sex, or other unrelated factors.


ASE Resources

Compensation Plan Design - This course provides participants with background and theory to design develop and implement robust compensation plans/structures for their employees.  The next class takes place Wednesday, May 16, 2018.  Click here to learn more or to register.

2018 Compensation and Benefits Conference - ASE’s annual Compensation and Benefits Conference is Michigan’s premier total rewards event and will take place on May 23rd at The Henry in Dearborn.  The 2018 Compensation and Benefits Conference will offer valuable and timely insight on the unique challenges facing today’s Total Rewards professionals and includes a session on pay equity.  Learn more or register here.

Compensation Consulting Services - ASE will work with you to develop a compensation program that attracts and retains the right people at your organization. Whatever unique considerations your organization may have, our expert resources are here to guide you in the right direction.  For more information visit us online or contact Kevin Marrs at 248-223-8025 or kmarrs@aseonline.org.



Sources:  Leanin.org, aauw.org, iwpr.org


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