The Root Of The Gender Pay Gap

Unequal access to high paying jobs

Another April Equal Pay Day has passed and the gender pay gap persists. New research from PayScale shows that each woman experiences the disparity of the gender pay gap in different ways depending upon her race, education, age—and even geography.
 

This year’s report goes beyond simply comparing compensation for all women against all men and deeply examines pay inequity to highlight the Opportunity Gap; the reality that women with comparable skills, experience, and education – are not advancing in their careers at the same velocity as men. The report shows that only 3 percent of women become executives, compared to 8 percent of men, showing that women face barriers which keep them in lower-level, lower-paid, individual-contributor positions.
 
The ongoing conversation about gender pay is really a call to action for employers to provide equal access to the best-paying positions in their organizations. The gender pay gap is multifaceted with many different factors contributing to pay inequity. As a result, every woman experiences the gender pay gap differently depending on her unique abilities and identities. Working toward a deeper understanding of these elements and developing a process for mitigating biases (even if unintended) that exist are the best ways for employers to establish equitable earning potential at their organization.

In 2019, women overall earn 79 cents for every dollar earned by men. This is the uncontrolled pay gap which measures the median salary for all men and women regardless of job type, seniority, location, industry, years of experience etc. This reflects a 1 percent improvement from 2018. By contrast, the controlled pay gap measures pay for men and women with the same job and qualifications. In 2019, the controlled pay gap shows a woman earns 98 cents for every dollar earned by an equivalent male peer. Yet, this still does not paint the whole picture.

Women are far less likely to “feel” they are being fairly compensated than their male colleagues. Fifty-two percent of White women and 55 percent of Black women said they do. What’s interesting is how this statistic changes when we break it down by gender and race. We found women tend to have a more negative perspective on their pay compared to white men. And, this is true for women of every race.

Additionally, research from Be Leaderly found women who are less engaged and passionate at work (67 percent for women, compared to 77 percent for men) not feel they are fairly paid, compared to 44 percent of White men.

Black, Hispanic and Alaska Native women experience a significant pay gap, earning just 74 cents for every dollar earned by a White man. The gap increases with seniority, as Black women executives earn only 63 cents for every dollar earned by a White male executive. When controlling for employees with similar qualifications, Black women make 97 cents for every dollar a White man earns. By contrast, the report revealed that Asian women actually make 2 percent more than White men with the same compensable factors.

Another significant finding is that women with MBAs face a significant disparity in pay; taking home just 74 cents for every dollar earned by men with MBAs. This suggests that women and men with MBAs have very different job titles and job levels or work in different industries and that women with advanced degrees are often underutilized and under-compensated.

Women aged 20-29 have the smallest pay gap and women aged 45 and older experience the largest inequity. This older group of women earns just 70 cents for every dollar earned by men of the same age, suggesting that women don’t experience the same promotion velocity into higher paying, senior management or executive jobs as men do.

Men and women holding the same jobs with the same qualifications are almost paid the same in the technology industry. However, more men hold higher-paying jobs in tech and women comprise just 29 percent of all employees in this industry.

In today’s tight labor market, employers can’t ignore potential wage and wage opportunity gaps at their organizations and expect to attract the retain the best talent. It’s not enough to conduct a pay equity analysis one time without backing up your assertions with data. Achieving equality at work isn’t something you can do overnight. It’s a journey and requires buy-in from all levels of the organization.

Wendy Brown is the Director of Content Marketing at PayScale. She has over 15 years of experience as a marketing and branding leader in both startup and corporate environments for both B2C and B2B. Visit www.payscale.com Follow @payscale