What's Driving the Gender Pay Gap?

Gender Pay GapWith competing statistics and polarizing politics, the very existence of the gender pay gap is often called into question. Debates rage over the level of wage disparity, its significance and what the driving factors are. 

Statistics cited vary depending on how data is calculated, but if you average out what all women, working full time, earn and compare that number to what all men working full time, earn - women take home 77 percent of what men do.  (See Forbes Article – Don’t Buy Into the Pay Gap Myth)

The 77-cents-on-the-dollar statistic does not necessarily compare men and women doing identical work - but it does reflect gender differences in types of jobs, hours worked, years of experience, education and personal choices that affect people’s careers. Incorporating these significant factors is why this statistic most closely reflects reality.

Education Has Little Impact on Gender Pay Gap

By 2013, women’s participation in the workforce rose to 57 percent. Women also earned 57 percent of the bachelor’s degrees in 2011 and half the PhDs and first professional degrees.  However, studies find that while education is a useful tool for increasing earnings, it is not effective in closing the gender pay gap. At every level of academic achievement, women’s median earnings are less than men’s, and in some cases, the gender pay gap is larger at higher levels of education.

Gender Pay Gap is Not Closing Fast Enough

According to the U.S. Census Bureau, if pay inequality continues at the rate of change seen between 1960 and 2015, women can expected to reach pay equity with men in 2059

So What Are the Driving Factors?

Cornell economists Francine D. Blau and Lawrence M. Kahn say that the gender pay gap is largely influenced by structural and societal factors that drive the decisions women make about where and how long they work.

But Blau and Kahn also say that over 40% of the gender pay gap is due to aspects that go beyond things such as occupation, education and years of experience.  At least some of wage disparity is due to discrimination, even if it is subtle and subconscious.

Societal & Structural Factors

Though there may be less overt discrimination, enduring social attitudes about women’s roles and structural barriers to women’s progress hold women back from better pay and positions.

Some critics argue that the wage gap exists only because women scale back work hours in order to care for their families. 

Inflexible Workplace Policies

Workplace policies often make it more difficult for women, who are most likely to be primary caregivers, to reach their highest potential in the workplace, or to remain the workforce at all.

Policies that don’t allow for flexible hours, job sharing or telework, and lack paid maternity leave or access to affordable childcare fail to recognize and accommodate their female employees who must care for their families. When women must reduce hours or take time off work to provide care for children or aging relatives, they will be penalized when they are ready to return to their careers. Gaps on the resume will make it harder for a woman to renter the workforce and most often results in lower pay than others doing the same job.

And the costs to employers who do not provide workplace environments that enable women to stay in their jobs post-motherhood — are high. In a recent interview, Laszlo Bock, senior vice president of people operations at Google, explained why offering generous maternity leave is in a company’s self-interest: “On the face of it, you’re losing two months of a worker’s productive time. But it more than pays for itself in not having to go recruit someone brand-new.“

Other research has also shown that family-friendly accommodations, such as flexible scheduling and telework, can also be good for the bottom line by improving worker productivity and reducing absenteeism. 

Government Policy Can Help

California already had one of the toughest equal pay laws in the country on the books. For years, the state required employers to pay equal pay to women and men doing the same job. The law was strengthened in 2015.  Equal pay will be required for women and men who do "substantially similar work" -- regardless of how their jobs are formally described.

Don’t miss Athena’s Signature Series Panel Discussion on November 3. Using relevant, meaningful data and details from their various areas of expertise, our panelists will discuss the reality of the situation and strategies for companies and individuals going forward. Sponsored by Barney & Barney/MMA.  Meet the panel/learn more. 

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