Gender Wage Gap Guide

The Gender Wage Gap: How Serious Is It, And What Can Be Done?

Many studies over the years have indicated that as a general rule, women make less money in the workplace than men do. The exact figures differ, but a central finding of these studies is that women make about 80 cents for every dollar that men earn. A commonly used term to describe this difference is, “the gender wage gap.”

But how strong is this conclusion? Assuming that a gender-based wage gap exists, what causes it? What are its short- and long-term consequences? If sexual discrimination is at least partly involved, what can you do about it? In this article, we discuss how the gender wage gap can manifest itself at work despite the existence of laws banning sex-based discrimination, and how if you experience wage discrimination you can use those laws to challenge it.

Does A Gender Wage Gap Really Exist?

To answer the question of whether the difference between what women and men are paid for doing the same or similar work is real, we need to examine how studies calculate the gender pay gap. The starting point is the “unadjusted” pay gap, which compares median annual earnings for full-time workers. Studies supporting the existence of the gender pay gap estimate that at this basic level, women earn about three-quarters to four-fifths of what men earn.

But ending the analysis at this point could be misleading because the “unadjusted” pay gap comparisons do not take into account important details like differences in education, training, experience and other factors. Studies that attempt to add these variables into wage gap calculations reach a more conservative estimate that women are still paid less than men for the same kind of work, with the discrepancy dropping to 5% to 7%.

So what is causing that remaining difference?

Skeptics of the gender pay gap argue there is no difference based on sex. They argue that it is really little more than a myth, promulgated and perpetuated by lazy feminists and politicians who decry the gender wage gap while paying their own female staffers less than males. These skeptics often criticize the use of unadjusted pay gap figures as making the problem seem worse than it actually is, but frequently they fail to explain why women’s lower pay persists even when the unadjusted gap is corrected.

Is The Gender Wage Gap Linked To Sex Discrimination?

Proponents of the gender wage gap have a simple explanation for the lingering adjusted discrepancy between men’s and women’s pay: bias or sex discrimination against women. They claim that even when little or no evidence exists of overt pay or promotion-based discrimination, bias against working women starts long before they interview for their first job. They argue stereotypes – including from those in positions to mentor and encourage young girls to succeed in life, such as parents and teachers and peers – operate to discourage women from considering or preparing for work in higher-paying occupations.

According to this line of reasoning, fewer women than men choose “STEM” (science, technology, engineering and math) majors in college – the majors that generally lead to better-paying careers – because of educational, cultural, media and family environments that convince them they aren’t good at math, are too emotional, lack competitive skills, and so on. They argue “choosing” a less-demanding or less-rewarding major in college really isn’t a woman’s “choice” at all: she’s been unwittingly steered into a lower-paying field by a process of low-expectation discrimination throughout her life. But even that theory does not explain the adjusted pay gap that controls for differences in education, training, experience and other factors.

Theories aside, evidence of labor force discrimination against women exists and it is not confined to unequal pay. Studies show that women do better in “blind” hiring competitions (in which the gender of the applicants is not known) than they would otherwise. Other studies purport to find significant hiring biases against women with children: one examined more than 500 consent decrees entered into by employers and found that of these, more than 300 involved allegations of sex discrimination, with almost 200 cases including complaints of pay-based, promotion-based or pregnancy-based bias.

What Are Some Of The Causes Of The Gender Pay Gap?

It is safe to say that in many situations, women do indeed make less money than men do, even when they work in the same fields and have the same job titles. And to some extent, the studies that point out this discrepancy also suggest the systematic ways that this inequality comes about. Some of these are:

  • Recruiting, hiring and promotion practicesGender-based discrimination or biases can lead to a preference for men over women. Sometimes this can take the form of presumptions, such as the belief that men will be more willing to devote themselves to their jobs as compared to women, given women’s traditional performance of the lion’s share of domestic and child-rearing activities at home (this is one variation of “the motherhood penalty”). Or, as we noted above, a recruiting disadvantage for all women could be having to compete in a patriarchal society that pressures them to settle for lesser career achievement. This is one expression of “the opportunity gap,” which links women’s lesser earnings to a lack of chances to do things like break into STEM fields or receive promotions into company higher management.
  • Sexual harassment in the workplace. One way to maximize earning potential is to stay longer with your employer, long enough to climb up the company’s promotional ladder. Sexual harassment, especially if it contributes to a hostile work environment, can lead women to conclude that instead of fighting against it the more practical response is to leave and seek employment elsewhere. The disadvantage of this choice is starting all over at the new employer, which can lead to a newly-hired woman with as much or more experience than her male counterparts being paid less than men and being behind them when it comes to advancement in the business.
  • Practices that penalize women who take time from work to have children. The motherhood penalty does not apply only to possible discrimination in recruitment and hiring. Women who have children, and leave the workplace temporarily as a result, can find it hard to pick up where they left off upon their return to work. Child care responsibilities can also lead to a restructuring of work schedules. Study-based evidence suggests that, especially for highly-compensated positions and management roles, the employer’s expectation is that it effectively “owns” the employee when it comes to long working hours and being available for work at all hours. Interestingly, the motherhood penalty does not seem to have a counterpart “fatherhood penalty.” In fact, often men who are or who become fathers find that their compensation at work increases, possibly due to expectations that as presumptive primary earners they will work longer and harder to support their families. In other words, motherhood can be perceived as a detriment to work commitment, while fatherhood is seen as an enhancement to it.
  • Choices by both men and women in education and occupational fields. Wage discrepancies can be the result of external factors over which a woman has little or no control, such as being caught in a hostile work environment, or they can result from choices that prioritize considerations other than maximum earning potential. Aside from the lopsided male-to-female ratio of students in college STEM majors, women tend to choose employment fields that simply do not pay as well. According to one report from the U.S. Senate’s Joint Economic Committee, of the 10 lowest-paying fields of college study, women earned about two-thirds of the degrees in nine of those fields. On the other hand, of the top 10 earning fields of study, in seven of them, women earned less than one-third of the degrees. This discrepancy may, however, be changing: in the 25 to 39 age group, for example, women now slightly outnumber men in science and engineering occupations, and one 2014 study concluded that when it comes to college faculty hires in the STEM majors, women had a 2:1 hypothetical advantage over men in securing those professorships.

What Are The Consequences Of The Gender Pay Gap?

The effects of the gender pay gap manifest themselves on two levels: individuals who receive less pay, especially over the course of years or decades, will not realize their full earning potential. According to one study, a man with a college degree will, over about 50 years, earn more than $1 million more than a similarly-educated woman during the same time span.

Lower earning power for women means more than having less disposable income. It also affects women’s ability to prepare for retirement and avoid falling into poverty after leaving the workforce. For example, the pay gap can lead to decreased ability to participate in employer-provided or individual retirement accounts, and can also reduce the effectiveness of pension funds.

Aside from gender, race can also play a part in the pay gap. Hispanic, African-American and Native-American women, for example, tend to have a higher overall pay gap than Caucasian or Asian women do, although when the gap is measured within their own racial groups (that is, Hispanic women compared to Hispanic men or Native American women compared to Native American men), it is not as large as it is between Caucasian or Asian women compared to men in their respective races. You can read more about racial employment gaps here.

Lower wages for women individually has a ripple effect on society as a whole, which can be estimated by lost potential gross domestic product (GDP). This could amount to up to 4% of GDP, amounting to billions of dollars annually lost to the economy.

Employers can also feel the negative effects of this pay gap. Employees who believe that they are being discriminated against, even passively, tend to have less job satisfaction and a smaller sense of loyalty to their employers than they would otherwise. Differing perceptions can also contribute to tension between male and female employees if the latter perceives the problem as systemic while the former does not. These corrosive effects on employee morale often translate into lower productivity.

One of the many ironies of the gender pay gap is that women who receive less compensation are more likely to leave their jobs. But this can contribute to the pay gap because often, starting a new job with a new employer will mean that these women experience disruptions in their career progression. In the meantime, the former employer is faced with the avoidable burden of having to find someone to replace an otherwise possible long-term worker, so effectively everyone loses.

What Are Some Solutions To The Gender Pay Gap?

In the same way that the effects of unequal pay for women have individual and societal effects, the real and proposed solutions to it have individual and social aspects. Gender-based pay discrepancies can be a form of sexual discrimination, which is actionable by the person being discriminated against. But overcoming social attitudes and beliefs that tend to relegate women to secondary earner status cannot be achieved by lawsuits alone; it requires a comprehensive reexamination of social expectations for women and men.

What Are Some Individual Ways To Overcome Gender-Based Wage Discrimination?

It Doesn’t Always Take A Lawsuit

Narrowing the gender pay gap does not always require legal action. Women can do some things on their own or with assistance from other individuals and organizations to improve their earnings relative to men in similar work roles. Some nonlegal considerations in this regard include:

  • Choosing your field of employment is important. Working in a STEM field or in health care can lead to better earning opportunities than in traditionally female-dominated fields like teaching or clerical work. Generally speaking, avoiding fields that predominantly employ women is advisable; this is true even if women “take over” a field that was formerly one in which men were prevalent. In fact, studies have shown that when a field switches from male-dominated to female-dominated, the wages for men and women tend to decrease.
  • More education can help to open up better-paying job prospects, but curiously education is not especially effective at closing the gender wage gap. In fact, among women and men with the same or similar education, the higher the level of education the greater the pay gap seems to become.
  • Negotiating pay matters when it comes to employment compensation. Be willing to negotiate compensation when accepting a promotion or new position.
  • Developing stronger relationships with management personnel can assist with career development and promotion opportunities. This includes making yourself available to take more job training and related professional courses, either through the employer or on your own.
  • Choose your employer carefully. Larger employers have more career path options than smaller ones. They are also more likely to have personnel and programs dedicated to gender equality issues than small companies do.
  • Work full-time instead of part-time. Related to the item above (choice of employer), full-time workers are better positioned to take advantage of career training and advancement opportunities than part-time workers are – and frequently part-time professionals end up working near full-time hours but only receive part-time pay.
  • Joining a union, if that is practical, helps to narrow the pay gap.
  • The state you live in can have some bearing on how significant the gender pay gap is. It is not a uniform phenomenon; some states have much greater gaps than others do.

These are not all of the things you can do to improve your chances of narrowing the gender pay gap in your own life and career, but they highlight the need to be proactive. Your male coworkers and your company’s management may not see the problem in the same way that you do, so waiting for them to recognize it and to respond accordingly could be a frustrating experience.

You Have Legal Recourse Available

Federal and state laws exist making sexual discrimination illegal. Two such laws are the Equal Pay Act of 1963 and Title VII of the 1964 Civil Rights Act. Under the Equal Pay Act, you can file a lawsuit for gender-based pay discrimination directly, or you can file a complaint with the U.S. Equal Employment Opportunity Commission (EEOC) without precluding your ability to file a lawsuit on your own. Title VII claims require you to first file a complaint with the EEOC, which can take action on its own against the employer, or if it declines to do so it will notify you of your right to sue individually.

You have a limited time to take legal action under either of these two laws. Under the Equal Pay Act you have two years (measured from the date when you received your last paycheck that was the subject of wage discrimination) to file a lawsuit unless you claim that the discrimination was intentional, in which case you have three years.

Claims under Title VII have a more complicated procedure to identify how much time you have, depending on whether your state has its own “fair employment practices agency.” The process works as follows:

  • If your state has such an agency, and it enforces the state or local laws against wage discrimination, then you have 300 days to file a complaint (a “charge”) with the EEOC.
  • If no such state agency exists, then you have 180 days to file your charge with the EEOC.
  • The time period for these deadlines is when the most recent act of discrimination happened, or in situations where the discriminatory intent was not apparent then it begins when you believe, or have reason to believe that you have been subjected to pay discrimination.

An attorney familiar with gender pay gap legal claims can help you to identify when the appropriate time limit to file a charge. If you feel you are being discriminated against at work, this is how you file a discrimination claim in Illinois.

What Can You Recover From A Pay Discrimination Legal Action?

What you can recover if you are successful in proving pay discrimination depends on factors including the law under which you filed your complaint and the behavior of your employer. According to the EEOC, if your complaint is for wage discrimination under the Equal Pay Act, your remedy can be liquidated damages, which include back pay owed to you. For a Title VII sexual discrimination complaint, you can receive compensatory damages (costs you have incurred as a result of the discrimination, such as those in connection with looking for a different job, or medical expenses, or even emotional harm), court costs (including attorney and expert witness fees) and in some cases punitive damages (note that punitive damages have limits based on the number of employees in the company).

What Are Some Societal Ways To Reduce The Gender Pay Gap?

Filing a lawsuit to address a pay discrimination claim, including a class-action lawsuit if the discriminatory behavior affected others as well as you, is largely a reactive approach: You take action after you have experienced the discrimination.

Some advocates for equal pay believe that the solution to this problem is to enact policies meant to change the behaviors that can lead to sex-based pay discrimination. These include enacting new legislation, increasing the number of class-action lawsuits, particularly against high-visibility employers, expanding the use of injunctive relief in successful lawsuits to force employers to change discriminatory practices, and encouraging the use of outside agencies and personnel to monitor company compliance with anti-discrimination guidelines.

How effective such proposals would be is subject to debate, and in some cases, the debate can be contentious. As with many topics, people with differing views tend to argue past each other and ignore valid points that do not conform to their beliefs. But that only makes finding solutions harder.

That the gender pay gap exists is a certainty; were it not so, there would not be the number of EEOC charges and lawsuits alleging its existence, and those actions would not meet with the degree of success that they have had. How to re-engineer society to combat this problem can be problematic in itself, though, and closing the final percentage points of the adjusted gender pay gap will have to cope with both the law of unintended consequences (engendering more resistance as corrective measures become more intrusive and burdensome to companies) as well as the law of diminishing returns: Women have made significant progress in closing the gap since the late 1970s, but that progress has slowed if not stopped in recent years.

The debate about how much of the remaining gender pay gap is the proximate result of either structural discrimination in hiring, promotions and pay-setting or purposeful behavior against women will continue. In the meantime, if you experience such discrimination personally or want to learn how to help your organization prevent it, consulting with legal counsel to explore your rights and options remains the most direct action you can take.