What Is the Gender Pay Gap?

The Gender Wage Gap Explained

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The gender pay gap refers to the gap between what women earn in income compared to what men earn in income. 

Below, we’ll dive deeper into what the gender pay gap is and share a few examples. You’ll learn how the gender pay gap works, look into its criticism, and understand why it matters.

Definition and Examples of the Gender Pay Gap

Men out-earn women in both traditionally male-dominated and female-dominated professions, according to recent data from the Bureau of Labor Statistics (BLS). 

Among a variety of professions, the gender pay gap exists. For example, the median weekly earnings for male marketing managers is $1,732, while female marketing managers earn $1,435 per week on average, according to BLS data. Despite the salary difference, the number of female employees in this role is nearly two-fold that of male. 

Men earn more than women in other professions, too, such as computer system managers, human resource workers, food service managers, insurance underwriters, civil engineers, and many others. 

  • Alternate name: Gender wage gap

How the Gender Pay Gap Works

There are a number of reasons why the gender pay gap exists. In an email to The Balance, Dr. Sasha Shillcutt, professor of anesthesiology, gender equity researcher, and founder of Brave Enough, explained that we as a society are “not conditioned to value women’s work the same as a man’s work.” Many people, according to Shillcut, believe women should be grateful for the work they have and do. 

Also, women often start out in their careers making less than their male counterparts.

“This is mainly due to their lack of negotiation skills, discrimination, and implicit bias,” said Amanda Bullough, associate professor of management and global leadership at the University of Delaware, in an email to The Balance. 

It can also be difficult for women to gather the same level of experience as similarity situated men.

“Women frequently get pushed out of the workforce in order to take on more family-related duties, including childbearing and childrearing,” said Dr. Rebecca Gill, associate professor at the University of Nevada, Las Vegas in an email to The Balance. 

In 2020, the labor force participation rate—accounting for those working or looking for work—was 71.2% for all women with children under the age of 18. The participation rate for men with children under age 18 was 92.3%, in comparison. 

While men could certainly do much of this work, the pay differential typically makes it less costly for a family to have the woman stay home, since she probably makes less money to begin with, according to Gill.

Research suggests women who take maternity leave and/or have children are generally perceived to be less dedicated to their work. Men, on the other hand, are generally perceived to be more dedicated to their work if they’re put in the same position, and usually earn more as a result. 

How the Gender Pay Gap Impacts Marginalized Women

The gender pay gap becomes greater for women of color, according to the Center for American Progress. While a White woman’s median earnings is $0.79 to a White man’s $1, a Black woman’s median earnings is $0.62.

Generational inequalities are likely the cause of this wider pay gap.

“If people of color can't afford higher education at parity with Whites, then people of color continue to be disadvantaged in developing their human capital, creating networks of educated and connected friends in college, and securing higher-paying jobs,” Bullough said.

The pay gap is also wider for other marginalized women, including women with disabilities and women in the LGBTQ community. This holds true despite legislation like the American with Disabilities Act and Title VII of the Civil Rights Act of 1964. These acts make discrimination based on sex or disabilities illegal. 

Unfortunately, women don’t usually know they’re earning less than men because pay is confidential at most companies, according to Bullough. Therefore, they can’t do anything about it. Also, employers rarely look for pay gaps, as it would be expensive to rectify the inequality. 

Impact of the Gender Wage Gap

The impact of the gender pay gap is difficult to quantify. However, it's generally true that the lower the income a woman has, the less of a nest egg she is likely to have in retirement. In addition to having less money saved for retirement, women also carry nearly two-thirds of the nation’s student loan debt.

According to Gill, there are many reasons for the financial challenges women face in the workplace. One key reason is that women tend to be evaluated on their past education and experience, while men tend to be evaluated on their potential. 

“This is because men are often seen to have more of the innate qualities of leadership, competence, etc.,” Gill said. “This sometimes means that women must obtain more education [and] experience than similarly situated men in order to land the same position. So women make up the majority of college students, etc. This can leave them burdened by more debt in order to land the same position.”

Legislation like the Paycheck Fairness Act, introduced in January 2021, could help strengthen protections for women and help to eliminate the gender pay gap. The bill addresses specifics of wage discrimination on the basis of sex. One portion would increase transparency in pay rates and salaries, enabling women to learn if they are earning less than similarly situated men.

Unfortunately, many women may also be stuck in a situation where they have to pay off accumulating debt with their lower wages.

“The gender wage gap also contributes to the phenomenon whereby women who are divorced are much more likely than divorced men to end up impoverished,” Gill said. “It also perpetuates the cycle of undervaluing feminine-stereotyped work. It's just not good at all.”

Additionally, the gender pay gap can take a serious toll on a woman’s desire to thrive professionally.

“When you face a 35-year career, knowing you are working just as hard as your male colleagues and not being paid similarly, it erodes your morale, and the trust of your leadership and organization,” Shillcutt said.

Key Takeaways

  • The gender pay gap is the difference in wages between men and women.
  • Family-related duties like childbearing and childrearing, a lack of training on negotiation tactics, and gender bias are a few of the reasons the gender pay gap exists.
  • Greater student loan debt and less retirement funds are some of the effects of the gender pay gap. 

Frequently Asked Questions (FAQs)

How is the gender pay gap calculated?

The wage gap typically compares the median wage of women to the median wage of men. At present, the wage gap is about 18 cents per hour. The gap in earnings tends to remain no matter how it's calculated. 

How can we close the gender wage gap?

According to experts, the best way to close the gender wage gap is from the forefront of the workplace. Companies should implement human resources best practices and remove bias at every stage of the recruitment, hiring, negotiation, and promotion process. 

Why has the gender pay gap narrowed?

Women enjoy greater access to education and take advantage of it. However, this  often comes at a significant cost, making student loan forgiveness beneficial to women as it can offer some measure of equity.  

What industries are affected by the gender wage gap?

The gender wage gap affects all types of jobs. These include jobs in business; finance; engineering; life, physical, and social sciences; law; education; art and entertainment; and many more industries.