Why Does the Wage Gap Between Men & Women Persist?
Kim Gaxiola, CFP®
September 20, 2015
While it has narrowed, a notable inequality remains.
Provided by TechGirl Financial
Last year, the median weekly earnings for an American woman came to $719
Bureau of Labor Statistics data shows that the median weekly earnings for an American man were $152 higher, or 21.1% more.1
Calculated over the course of 52 weeks, that means the median yearly pay for a man in America was $45,292 in 2014. Median yearly pay for a woman: $37,388.1
The good news, relatively speaking: in the past 35 years, this gap has narrowed. In 1980, women working full-time earned only about 65% of the wages of their male counterparts.2
After all these years, why is there still such wage inequality?
Two quick explanations are often put forth. One, there is still appreciable wage discrimination against women in the workforce, with mothers being perhaps most affected. Two, some women accept lower-paying jobs or leave work altogether while staying at home with their kids or taking care of ailing relatives.
These factors are certainly present in wage inequality, yet so are others that get less media notice.
More women work for low pay than men
Citing BLS data, the National Women’s Law Center notes that more than two-thirds of minimum-wage jobs in this country are held by women. In fact, the NWLC found in 2014 that women made up 76% of employees in the ten most common occupations with hourly wages of $10.10 or lower. Even in these low-salaried jobs, full-time working women still made an average of 10% less than their male co-workers.3,4
As the Great Recession ebbed, these entry-level jobs were an immediate source of work for many women: 35% of the net employment gain for women from 2009-13 occurred in these fields, compared to 18% of the net employment gain for men. As the number of women in these low-wage occupations markedly exceeds the number of men, this is one of the underpublicized reasons for the continuing wage gap by gender.4
Careers in which women predominate pay less than careers in which men predominate
As an example, more than 75% of classroom teachers in America are women (and the median pay for classroom teachers, adjusted for inflation, is essentially where it was in 1970). Only recently have initiatives emerged to encourage women to enter “STEM” career fields (careers rooted in science, technology, math and engineering), which are male-dominated and comparatively high-salaried.5
It may be argued that a teacher contributes much more to society than a software engineer, but that argument is not bolstered by the pay gap between those careers. Looking at Payscale.com, the average salary for an elementary school teacher is $40,311 while the average software engineer earns $63,080.6
Women do a lot of unpaid work
A mother earns no salary for raising children; a wife earns no salary for taking care of a disabled or seriously ill spouse or partner. Historically, women have left the office to perform this work to greater degree than men have. This tendency also contributes to the wage gap, as the woman involved may end up choosing lower-paying work or not work at all.
Wage discrimination still exists, and is partly accountable for the differential in median wages between the sexes. There is more to the story, however; the career and life choices women are encouraged or impelled to make also influence the numbers.