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.
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 use of unadjusted pay gap figures asmaking 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.
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 orless-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.
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:
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 a million dollars more than a similarly-educated woman during the same time.
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 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 perceive the problem as systemic while the former do 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.
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.
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 non-legal considerations in this regard include:
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.
Federal and state laws exist making sexual discrimination illegal. Two such laws are the Equal Pay Act of 1963 and the 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:
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 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).
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.