What’s the Real State of the Gender Pay Gap in the Developed World?
The recognition that women are frequently paid less than men is certainly nothing new. But unless a woman uncovers the data around how similar positions for people with similar experience are paid, it can be unbeknownst to an employee that she has been personally affected by the gender pay gap.
Women face a broad range of barriers in the workplace, even in 2020. The representation of women in leadership, the representation of diverse women in leadership, and barriers to advancement are all common challenges faced by women in the developed world. Pay equity has become an increasingly important topic as women take on more leadership roles and strive to break the glass ceilings in corporate America.
Understanding the Gender Pay Gap
There are two primary ways to define the gender pay gap. The first is known as the uncontrolled gender pay gap, which considers the ratio of the median earnings for women compared with the median earnings for men without controlling for other factors. Since 2015, the uncontrolled gender pay gap in the United States has only decreased by $0.07.
In 2020, women still only make 81 cents for every dollar that a man makes. When taking into account, factors like years of experience, location, industry, and job title, the controlled gender pay gap has decreased by only 1 cent since 2015. In the controlled group, women make 98 cents for every dollar a man makes.
Previously, gender pay gap reports and studies looked only at the amount of money made by men and women in relation to one another. However, there are numerous other factors effecting women's role in the workplace and beyond that are now included in these new studies.
For example, last wages as counted in lifetime earnings show a significant gap between what men leave the workforce with when compared with women. In fact, when it comes to an uncontrolled gender pay gap, women lose approximately $900,000 on average over their lifetime and women affected by the controlled gender pay gap lose $80,000 over time. This number might initially seem small until you factor in the possibility of investing that money and benefitting from compounded interest over time.
Women are more likely to be impacted by last wages over the course of time because of the role that they play in childcare. Women might have to seek lower paid positions but afford more flexibilities so that the woman can remain involved in childcare or some women choose to take breaks during their careers entirely for years at a time. This can make it very difficult for those women to return to the workplace and navigate back into leadership roles. While many different factors can influence the gender pay gap, some of the most difficult to quantify include discrimination and unconscious bias against women. For example, women might be facing an uphill battle when employers assume that the woman will take time off from work in order to raise a family. Some of the few points of data surrounding women's insight around discrimination includes a 2017 Pew Research Center study, which found that over 40% of women felt they had experienced gender discrimination at work. Fewer than half that number of men said they had experienced the same. Women are also more likely to find themselves in lower paying positions than men. Women are largely also underrepresented in leadership roles in the C-Suite and in well paid jobs.
Why Diversity and Inclusion Matter for The Gender Pay Gap?
Women of all ethnic groups and races earn less than white men when accounting for the uncontrolled gender pay gap. With regard to uncontrolled data, Hispanic, African American, and American Indian and Alaskan native women make even less that their white female counterparts when it comes to the pay gap. The pay gap can get even wider with progression over the course of a career.
One primary reason for this is that women advance professionally at slower speeds when compared with their male counterparts. In 2020, 76% of women and 75% of men between the ages of 20 and 29 are in roles defined as individual contributors. This means that they are not responsible for managing other people. Between the ages of 30 and 44, however, 30% of women became managers or supervisors, whereas, 36% of men were in similar roles. By age 45 or older, men are twice as likely to be executives or directors when compared with women.
Over the course of their lifetime, approximately 12% of men are likely to make it into an executive level role at any point, whereas, only 6% of women are likely to achieve similar roles. As you might expect, women of color face wider gaps in these opportunities and are impacted by the fact that they start out further behind in pay.
Especially since women have taken on bigger roles and higher education, it can be shocking to realize that the gender pay equity issues still stretch across the board when it comes to highly educated men versus women. Higher education in and of itself does not lead to pay equity. The biggest uncontrolled gender pay gap is for those women who have MBAs. Women also have lower perceptions of fairness of pay when compared with their male counterparts.
Part of our goal at She Syndicate is to work hard towards eradicating gender equity issues. Stay tuned to our blog to learn more about our programming and efforts to address these issues.
