No matter where you are in your career, it’s worth considering how pay gaps may impact you and those around you.
Women earned just 85 cents for every dollar men made in 2018, according to a Pew Research study of median hourly wages of both full-time and part-time workers in the United States. In 2017, the unadjusted gender pay gap stood at about 80 cents to a dollar, indicating that 25% of the gap was closed in just about a year.
Progress appears to be happening more quickly for millennials entering the workforce. Younger women, aged 25 to 34, earned 89 cents for every dollar a man in the same age group earned. This is the smallest gap of any demographic.
For comparison, when data was first gathered in 1980 on pay by gender, women earned 64 cents to every dollar men made overall. While the gender pay gap has shrunk significantly over the last four decades, there is still a ways to go for complete pay equity between genders.
Discover the history and legal precedent for wage equality in the U.S., examine the factors that go into calculating the pay gap today, and recognize your employer has the power to identify and help eliminate inequitable pay.
Is It Illegal to Pay Women Less Than Men?
Several U.S. federal laws have helped combat wage, gender, and ethnicity discrimination in the workplace. Among the most common laws are:
- Fair Labor Standards Act (1938) – The first law of its kind, the FLSA create the right for employees to earn a minimum wage and overtime pay. It also outlawed oppressive child labor.
- The Equal Pay Act (1963) – This act amended the FLSA of 1938 to abolished wage disparity based on sex.
- Title VII of the Civil Rights Act (1964) – This act prohibits discrimination in all aspects of employment, including compensation, based on race, color, religion, national origin, and gender.
The Paycheck Fairness Act was introduced to Congress in April 2017, and was passed by the House in March 2019. It expands on The Equal Pay Act to further audit and prevent wage discrimination.
In addition, 47 U.S. states have varying levels of pay equity protections in place; 22 have just gender-specific laws, and 25 have gender plus other categories. As of April 2019, Alabama and Mississippi are the only states with no equal pay protections.
While these laws have helped narrow the pay gap over time, it is often up to organizations in the private sector to eliminate inequitable pay within their own salary structure.
Why do Women Get Paid Less Than Men?
The 2018 Unadjusted Gender Pay Gap (i.e., 15 cents) can stem from pay discrimination, but is also influenced by other factors. Understanding the Gender Pay Gap in America dives into more of the causes and variables contributing to the gender pay gap. Here are a few common “group-to-group” factors that influence the gap:
- Overrepresentation in lower-paying roles – Even though women have increased their presence in higher-paying jobs traditionally dominated by men, like managerial positions, they are still overrepresented in lower-paying occupations.
- Family leave and other lifestyle differences – Gender roles are another long-time factor contributing to the gap, especially with regards to family leave. Women take significantly more time off from work than men for child-rearing, and are twice as likely to believe it has a negative impact on their career (and long-term earnings).
These factors are based on historical bias over time and doesn’t necessarily suggest blatant workplace discrimination, but they still contribute to the overall unadjusted pay gap today.
HR Can Help Close the Gap: Eliminate Bias in Pay Structures
Employers can use their own gender pay gap as a base point for understanding pay equity in their own organization because it compares pay of all women to all men.
Gartner estimates 27% of factors contributing to the gender pay gap are definitely within HR’s control. When it comes to pay, HR is in direct control of maintaining a compensation system that prevents against gender bias. According to a 2017 Pew Study, 40% of women say they’ve experienced gender discrimination at work, with 25% believing they make less than a man in the same role. Even if employees of different genders are paid equitably in a position, the mere perception of pay bias is damaging to a company’s brand and retention rate.
Ensuring all employees are paid an equitable salary is a complex process, but it is within a company’s ability, ethical initiative, and best interest to identify why men make more than women in their organizational structure and take steps to ensure pay equity.