advertisement
advertisement

Why women are still making so much less than men

The gender pay gap is more complicated than many people believe. We spoke to women across industries about their experiences, and whether we’ll really have to wait another lifetime for change.

Why women are still making so much less than men
[Photo: Moose Photos/Pexels; Phototalker/iStock; Rawpixel; Rawpixel; Vidal Balielo Jr./Pexels; Ruslan Lytvyn/iStock]

This story is part of Fast Company‘s Gender Pay Gap package “Short Changed.” In honor of Equal Pay Day, the symbolic day of the year when women’s pay has finally matched the previous year’s pay for men, we are exploring elements of pay inequality though the personal stories of women across industries and career stages. Click here to read the whole series.

advertisement
advertisement

No one ever taught me about negotiating, and for the first several years of my career I was so happy to get any job offer that when the hiring manager stated the salary, I simply said, “Okay, thank you.” The idea that I could ask for more, that my skills and talent were worth more, never crossed my mind.

There is a belief that most women behave like I did in those days–that we simply don’t negotiate. This is one one of the prevailing excuses for why the gender pay gap persists. And while it may be true that men grow up having been taught a different approach to money, the gender pay gap, which still hovers at around 20% or more, can’t be explained away that easily. The more you dig into the causes of the gap, the more complicated and nuanced the issue becomes.

For starters, many women do negotiate, just as I later learned to do. In fact, Fast Company recently conducted a survey of women about the gender pay gap, and of over 100 readers, 75% of the women said that they had negotiated either their starting salary, a raise, or both. But negotiating is just one small piece of the pay-gap puzzle. The number that women are initially offered is often lower than the what men are offered in the same role.

And employers often base the starting offer on the candidate’s salary history, which means that if a women had lower salaries in the past, she’ll always be at a deficit. (In our survey, 53% of women had been asked for their salary history.) And then there is the bias that women face when negotiating in the first place (which compounds for women of color).

There have been plenty of efforts to remedy those issues: Several states and cities have banned employers from asking about salary history. There are countless organizations, books, and articles dedicated to teaching women exactly how to ask for more. And there are several resources that allow candidates to figure out the market rate for their industry and role.

But despite all of these efforts, the gender pay gap persists. Right now, white women earn around 80¢ for every dollar white men earn, while black women earn only around 61¢. Asian women fare slightly better than white women at 86¢, while Latinas make only 53¢.

advertisement

Discovering inequalities

My first encounter with the gender pay gap happened several years into my career. I was relatively happy in my job. I hadn’t negotiated my starting salary, but I assumed I was being paid fairly for my industry, and comparably to my peers. That was until I overheard a man, several years my junior, who had been hired a year after me with a title junior to mine on the phone with his financial planner. He loudly and casually mentioned his salary–$10,000 higher than mine. I was hurt, angry, and stunned.

When I raised the issue with my boss, I was met with excuses about the prestige of my coworker’s alma mater along with the fact that he had negotiated himself a high starting salary. I started looking for a new job, and once I got an offer, I negotiated my starting salary for the first time in my life.

I was far from alone in that experience. Fifty-two percent of the women in our survey said that they have found out that a man either in the same role or junior to them made more money than they did.

Fast Company senior writer Liz Segran talked to a woman who found out that the men she was managing were all paid significantly more than she was. Read what happened when she took the issue to her company’s HR department.

The problem with “women’s work”

The roots of the gender pay gap can be traced all the way back to when women first took paid work. The type of work that women were typically allowed or encouraged to do was lower paid. These so-called “pink collar” jobs (often caring work like nursing, teaching, cleaning) have persisted in being lower paying than fields more typically filled by men (manufacturing, business, science). Yet the argument that women choose lower-paying fields falls apart when men enter these fields and are offered higher salaries, or when women break into the boys’ clubs of business or engineering yet are offered significantly lower wages. For example, male nurses earn about $5,100 more a year than female counterparts who hold similar positions.

advertisement

Fast Company writer Pavithra Mohan spoke with Kelley Rieger who has been a nurse practitioner for 20 years about how the public views her profession, and what changed when more men entered it.

The motherhood penalty

Another excuse for the disparity in women’s earnings is that they frequently take an extended amount of time off to care for children. And while women do take more time off to care for kids or aging parents than men do on average, that’s still an incomplete picture. Many women feel that they have to drop out of the workforce either because their workplaces are inflexible, or because their salaries are so low that the cost of childcare is greater than their paychecks. But millions of working moms who do stay (or later return to work) are often met with bias and penalties, which means fewer opportunities for advancement or raises.

Consider the common workplace phenomenon of the “motherhood penalty” and the “fatherhood bonus“: When men become dads, they are more likely to receive raises, in part because of old-fashioned notions that they are the family breadwinner. Meanwhile, when women become moms, they are more likely to be viewed as less committed to their jobs. This serves to widen the pay gap. According to the National Women’s Law Center (NWLC) analysis of U.S, Census data, working mothers make about 71¢ to a working father’s dollar, resulting in a loss of about $16,000 in earnings for moms every year.

Fast Company assistant editor Anisa Purbasari Horton spoke to Rita Kakati Shah, who quit her job at a pharmaceutical company when they didn’t offer her paid leave. Shah found it impossible to find a job after taking time off to care for her children. Her struggle inspired her to start her own business to help other moms returning to work.


More From Fast Company’s Gender Pay Gap Series “Short Changed”

advertisement

A lifetime of losses

All told, the discrepancy in men and women’s pay compounds over a working person’s lifetime. According to data from the U.S. Census Bureau, a women earns on average $9,909 less than a man every year. Other estimates from the Institute for Women’s Policy Research (IWPR) find that by the time a college-educated woman turns 59, she will have lost around $800,000 in missed earnings, thanks to the wage gap.  The impact of that lost money means that many women enter retirement with a smaller nest egg, or have to delay retirement altogether.

Of course, those lost wages also impact the shape her life takes while she’s working: less money for childcare can mean delaying or forgoing having kids altogether, it can impact the career choices she makes, and the availability of other opportunities, like travel and home ownership.

Fast Company senior writer Ainsley Harris spoke to a woman who now in her late 50s, says has to delay retirement because of the wages she’s lost over decades of being underpaid.

Hope for change?

If the gender pay gap has persisted for generations, is there any hope of change? Yes and no. Pew research found that the gender gap in pay has narrowed since 1980, but it has remained relatively stable over the past 15 years or so. But at its current pace, we can’t count on that change coming during most of our working lives.

According to IWPR, if change continues at the same slow pace as it has for the past 50 years, it will take 40 years–or until 2059–for white women to reach pay parity. For women of color, the rate of change is even slower: Black women will wait 100 years–until 2119–for equal pay, and Hispanic women will have to wait 205 years, until 2224. (Lest you think this is a uniquely American problem, according to the World Economic Forum, it will take 202 years to achieve gender pay parity on a global level.)

Many women (and men) aren’t willing to wait 40 to 200 years to reach gender pay equality, so over the last few years, as the issue has become more mainstream, some business leaders have taken matters into their own hands. Over the last few years there has been a call for salary transparency. While some believe it’s one of the only surefire ways to ensure pay equality, some companies who made all the salaries transparent have found the tactic didn’t solve the problem.

advertisement

Fast Company writer Lydia Dishman talked to a CEO who has spent fours years trying to fix his company’s gender pay gap.

The bottom line is that the gender pay gap is a complex and an often emotionally fraught issue for both women and men, and for the companies who employ them. There are few things more defining to a person than the value placed on their work and livelihood. It’s natural that no one wants to believe that they are treating people unfairly, which is why the problem has festered for decades, and why so many argue fervently against the existence of the gender pay gap, despite mountains of data. By reading the real life experiences of women and families who have been impacted by the gender pay gap, perhaps we can start to move closer to solving the problem. And hopefully that happens on a timeline sooner than 200 years from now.

advertisement
advertisement

About the author

Kathleen Davis is Deputy Editor at FastCompany.com. Previously, she has worked as an editor at Entrepreneur.com, WomansDay.com and Popular Photography magazine.

More