New Data on the Pay Gap Is Out, and It Doesn’t Look Good
The Pew Research Center, a nonpartisan think tank, just released its report on the gender pay gap in the United States, and the news is grim. According to the research published on March 1, the pay gap between men and women is nearly identical to what it was twenty years ago. There have been many efforts to ameliorate this problem—from pay transparency laws to increased scrutiny of earnings disparity among employees doing the same job—but the problem persists.
One huge reason for this is the indisputable fact that the US runs on the underpaid labor of women. Even when women work full-time outside the home, they still carry the majority of the responsibility for managing the household. That is to say that even in 2023, women still do the majority of housework (whether that’s doing it themselves or coordinating paid help), shopping, childcare, and administrative work for the family (making everyone’s dental appointments, planning activities, cleaning, and other recurring tasks). This unpaid work is valued at 10-39% of GDP and contributes more to the economy than the manufacturing, commerce, or transportation sectors. In other words, this unpaid labor supports the economy and fills in for the lack of social services.
Another factor impacting the wage gap is parenthood. While having children is often limiting to women’s careers, it is beneficial to men. Women who become mothers can be perceived as less dedicated to their jobs than their male peers. Men do not suffer these same consequences. Ample scholarly research confirms the phenomenon of the fatherhood bonus. This “fatherhood bonus” rests on the belief that mothers become less productive employees while fathers work harder once they become parents, despite the lack of data that supports this thesis.
The labor of women, paid or unpaid, is not valued by society. This contributes to the disparity in earnings across all fields. Perhaps most surprisingly, the gender pay gap increases in highly specialized sectors. Investment banking, for example, tends to hire from top MBA programs. Barclay’s, a large, multinational investment bank with a huge presence on Wall Street, pays women bankers half of what they pay their male counterparts. In big law firms, the disparity can be just as bad. An article in the New York Times revealed that the gap at the top is close to 44%. That’s right; female partners are, on average, paid 44% less than male partners. It’s about the same in the world of Big 4 consulting too. This report indicated that female staff at consulting giant Deloitte are paid 43.2% less than their male peers.
This is a huge drag on the economy. It amounts to trillions of dollars in wages left on the table. Whenever an article is posted on this topic, there are invariably a number of men who chime in to say that this is not true. Women earn less because they choose lower-paying careers than men, don’t work as hard as men, or don’t negotiate as successfully as men. Or, my personal favorite, that the wage gap doesn’t exist because they don’t believe it does or because their brother-in-law told them about a woman at his company who out-earns most men, or because their favorite bro podcaster says it’s not a thing. All of the data proves otherwise. I await the onslaught of cognitive dissonance and mansplaining on this. The bottom line is that the wage gap is real, it is not closing, and corporations need to improve.