The gender pay gap—it’s worse than you thought

Worldwide, women are paid 23% less than men who do the same jobs. This gender pay gap may be ardently disputed, but its existence is well documented and indisputable. The inherent problem with the pay gap is not only the disparity in earnings between the genders, but also the fact that a lifetime of economic inequality pushes women into poverty. Globally, unmarried women live in poverty at a disproportionately higher rate than do unmarried men. UN Women Executive Director, Phumzile Mlambo-Ngcuka says, “The gender pay gap reflects the unjustifiably diminished position of many women in society and helps to keep them there.”

Higher education, often touted as the cure-all for what ails a society, does help lift women out of poverty. However, it does little to close the gender pay gap. A recent study found that, somewhat astoundingly, the average mid-forties college educated male earns 55% more than his female counterparts. Fifty-five percent. The researchers also observed the following:

• The pay gap between the genders starts of small in the beginning of their careers, but that by mid-career, it is abysmal.
• Most of the earnings divergence happens within companies. When men and women both stay with the same organization, men enjoy much faster earnings growth.
• Although married women change jobs with almost the same frequency as men do, they do not benefit from these moves in terms of earnings increases. Men’s career moves tend to be to better paying roles.
• Sector and industry jointly explain only about a third of the widening of the gender earnings gap that occurs over time.
• By the apex of a person’s career, the largest gender gaps for the college educated can be found in the health, legal, and financial sectors.

Women are now, on average, more highly educated than men. As they have entered white collar fields previously dominated by men, a strange phenomenon has occurred. The wages for those jobs have dropped. This anecdotal evidence lends credence to the belief that employers tend to value work performed by women as having lower worth. It is not that these women decided to settle for lower pay; their employers just decided that they would pay less. This trend is documented—for example, when biology became a field dominated by women, the earnings dropped by 18%.  In contrast, jobs that were once the exclusive purviews of women experience an earnings increase when the demographics shift towards men. Computer programming was previously a low-level job that was done by women. However, when male programmers began to outnumber the female ones, the compensation increased, as well as the prestige of the field.

Perhaps the explanation for this extreme pay gap for white collar women has to do with the fact that white collar roles do not tend to respond to legislative remedies the way that blue collar roles do. Or, it might be cultural, in that work performed by women has traditionally been undervalued and unappreciated. (On a daily basis, the average married woman who works full time still performs three hours more unpaid domestic work than her husband.) Maybe it’s because women negotiate less forcefully than men. Or maybe it’s because women are still not seen as equal to men in the workplace. Whatever the reasons, we have a long way to go.