Frequently Asked Questions about the Gender Pay Gap

September 12, 2017

 

Female accountant or banker using calculator, computer, and spreadsheets.

What is the gender pay gap?

Simply put, the gender pay gap is the gap between what women are paid and what men are paid.

The most commonly cited gender pay gap statistic in the United States compares the median annual earnings of women who work full time, year-round against the median annual earnings of men who work full time, year-round. In 2015, the most recent year for which the federal government has released data, in this broad category women were paid 20 percent less than what men were paid. Or, put another way, women working full time, year-round were paid 80 cents per dollar that men working full time, year-round were paid.

There are as many ways to calculate gender pay gaps as there are ways to calculate average pay earned by workers, as long as the original data source records whether workers are men or women. Researchers can and do calculate gender pay gaps that include only full-time workers; include both full-time and part-time workers; compare average earnings over the course of a year, over the course of a week, hourly, or over the course of a career; compare workers within only a particular state or other geographical area; compare workers within a particular industry or specific occupation; look only at a particular subgroup, such as black or Hispanic workers; consider only workers with or without disabilities; look at the gender pay gap by education level; or include some combination of the above factors. Though the ratio of women’s pay to men’s pay varies depending on the data source and analysis, the finding that women are paid less than men is extremely consistent. (For more detail and many of these breakdowns, see AAUW’s The Simple Truth about the Gender Pay Gap.)

Why does the gender pay gap matter?

The statistic for the pay gap between all women working full time, year-round and all men working full time, year-round is the most commonly used gender pay gap statistic and usually receives the most attention. But research tells us there are many factors contributing to the size of the gender pay gap: reduced hours worked because of time spent on domestic work and care work; reduced job tenure resulting from breaks in labor-force participation to raise children; gender segregation by occupation and industry; and bias against women in leadership, to name a few. All of those factors are connected to gender norms and bias. Along with overt pay discrimination these factors add up to a gap that has a big effect on women’s economic status: more than $10,000 less in pay annually for full-time working women than men are paid.

Lower pay is the reality for working women in the United States, regardless of the contributing factors. Lower pay is a reflection of less power in the workplace and jobs with less prestige, and lower pay contributes to higher poverty rates for women and their children and less money for women in retirement. The struggles facing women in our economy are complex, but the simple statistic comparing the median annual pay of women and men who work full time is an important starting point in understanding the economic status of women.

Is the pay gap a myth?

The gender pay gap is math, not myth. Women working full time, year-round take home 20 percent less pay than men working full time, year-round. This is a government-published statistic based on a large, detailed, nationally representative survey of income in the United States, the Annual Social and Economic Supplements of the Current Population Survey. In 2015, the typical woman working full time, year-round was paid more than $10,000 less than the typical man working full time, year-round. That is a very real, substantial difference in the median earnings of women and men.

But men and women work in different jobs. Is there a pay gap if you compare apples to apples?

Yes. Government data breaking down the average pay of men and women working full time within specific occupations show that in almost every occupation, men are paid more than women.

In one of the largest samples of data and ranges of occupations available from federal government data (annual income estimates from the Census Bureau’s national American Community Survey, 2010–15), the government tracked pay in 525 occupations. AAUW analyses revealed that in 416 of those occupations, men earned significantly more than women. In 106 occupations, the difference between men and women was not statistically significant. In 2 occupations, average pay could not be estimated for both men and women. Women were paid significantly more than men in exactly 1 occupation out of the 525 occupations that were tracked: dieticians and nutritionists.

But men and women do tend to work in different jobs, a phenomenon called occupational gender segregation. Most workers in construction, manufacturing, and transport occupations are men, and most workers in health care and education occupations are women. The jobs that men typically work pay better than the jobs that women typically work, even after accounting for their skill and education requirements. For instance, full-time parking lot attendants (usually men) are paid more to watch cars than full-time child care workers (usually women) are paid to care for children, even though child care workers are increasingly being pushed to earn a college credential.

Don’t men work longer hours than women?

Most published pay gap estimates compare full-time workers with other full-time workers. But yes, women are more likely than men to work part time, and among full-time workers, men work longer hours on average than do women. However, on average women do more housework and care work than men. Men’s longer work hours are subsidized and facilitated by unpaid labor done by women, contributing to the gender pay gap.

Why don’t women just choose higher-paying jobs?

Seeking out jobs in higher-paying occupations — such as those more typically held by men — does increase women’s earnings but only to a point. Women working in male-dominated occupations are paid better on average than women working in female-dominated occupations, even accounting for the typical skill or education required in those occupations. But researchers reviewing data from 1950 to 2000 found that when occupations change from being male-dominated to female-dominated over time, the pay changes. Pay drops when women enter an occupation, even for the men in that occupation, and increases when men enter an occupation, even for the women in that occupation. The difference between higher-paying jobs and lower-paying jobs is partly because of skill or education requirements and other factors but also partly because our society values men’s and women’s work differently solely because of gender. Women can’t entirely avoid that societal bias by choosing a career in an occupation that is higher paying or male dominated.

Aren’t you exaggerating by talking about the gap if it’s not caused by discrimination?

The gender pay gap is an estimate of the actual gap in pay between men and women, not an estimate of the effect of discrimination.

But legal cases and discrimination complaints are still commonplace and show that illegal pay discrimination based on gender is part of the picture. Pay discrimination is part of the story, but the whole story matters.

Researchers have estimated the proportion of the gender pay gap that is the result of gender bias or discrimination by statistically accounting for the effect of all other measurable factors such as job tenure, education level, work experience, hours worked, college major, geographical region, race and ethnicity, and other factors. The remaining “unexplained” gap between men and women is assumed to be a result of gender bias and discrimination. Different studies of different data sources have found different values for this amount, but researchers have generally concluded that between one-third and one-half of the overall gender pay gap is due to bias and discrimination. A 2013 AAUW study of college graduates one year after graduation found an 18 percent overall gap between the earnings of women and those of men; when statistically accounting for factors other than gender, an unexplained gap of 7 percent remained. A 2016 study of the American workforce as a whole found an unexplained gap of 8 percent. These estimates of the gap due to gender bias and discrimination are smaller than the overall gender pay gap, but the gap due to bias and discrimination is still substantial.

Regardless of how much of the pay gap is due to gender bias and pay discrimination, the size of the overall gap — the difference in actual pay received by women and men — is still an important indicator of the economic inequality faced by women in the United States.

Does the gender pay gap take race into account?

The most commonly cited gender pay gap statistics compare women and men regardless of race or ethnicity, but race and ethnicity have a big impact on the lives and earnings of working women in the United States. Most women of color are paid substantially less than white women, who are in turn paid substantially less than white men. The gaps between most women of color and white men are larger than that between white women and white men because of racial bias and discrimination, differing levels of educational opportunity and attainment among different groups, unequal access to career opportunities and advancement, and other factors that add to the factors affecting white women or women as an aggregate. Women of all races and ethnicities are also paid less than men in their same racial or ethnic category. (These breakdowns are all featured and explained in AAUW’s The Simple Truth about the Gender Pay Gap.)

When researchers and advocates break down the statistics by race and ethnicity, we usually use non-Hispanic white men as the comparison group. White men are the largest group in the American workforce, the most overrepresented in leadership positions, and the demographic category that benefits the most from both sexism and racism, so they are a natural comparison group when trying to examine the cumulative effects of those phenomena.

Why don’t these statistics for the pay gaps for black, Hispanic, Asian, and white women seem to average out to the median gap for all women?

Many people notice that the gender pay gap numbers broken down by race and ethnicity don’t seem like they “average out” or “add up” to the pay gap number that is most frequently used. This is because the comparison group for the numbers by race and ethnicity is usually white non-Hispanic men, not all men. The most common gender pay gap statistic comes from comparing the median annual earnings of all women working full time, year-round to those of all men working full time, year-round, including men of color. The average earnings of white men are higher than the average for all men — because men of color are paid less on average than white men — so pay gap calculations relative to the pay of white men produce lower ratios than pay gap calculations relative to the pay of all men.

Does the gender pay gap really cost women $1,000,000 over the course of their careers?

The gender pay gap deprives women of a great deal of money, and that amount increases over time. Research shows that the gender pay gap begins as soon as women enter the workforce, and because raises and salaries in new positions are often dependent on previous salaries, initial gaps become larger over time. Men’s higher likelihood of advancing to leadership positions also increases the size of the gap over time.

Because women start their careers at a monetary disadvantage, it means that they have less money to save or invest from the very beginning. Employed women are less likely to be contributing to retirement accounts four years after college graduation than similar men, probably in part due to their greater student debt burden. Furthermore, Social Security benefits and employer-provided retirement or pension funds are also tied to salary. The gender pay gap follows women over the lifespan and gets worse as women get older.

Estimates of the exact amount of money that any particular woman will lose over her career or lifespan due to the gender pay gap do sometimes exceed $1,000,000, but these estimates are uncertain and vary across demographics. For instance, the gender pay gap is even larger for most women of color than for white women. The gap is also larger at higher education levels when compared with men with the same level of education, even though those degrees lead to higher earnings for women. But as the gap hopefully continues to close over time, it may be that the lifetime gap for women will shrink as well.


Take Action

Take a Stand
in Two Minutes

Find the latest actions you can take on the gender pay gap and other issues that affect women and girls.

The Simple Truth about the Gender Pay Gap research report cover Spring 2017

Get the Latest
Pay Gap Numbers

The updated edition of the Simple Truth about the Gender Pay Gap is available now.

Are equal pay laws strong in my state? Read AAUW's policy guide to equal pay in the states and find out how.

Fight for Fair Pay

Find out more about the stakes and the solutions.

Kevin Miller By:   |   September 12, 2017