The Truth About the Gender Wage Gap (And What We’re Doing About It)

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Despite years of progress and advocacy for women’s rights and equality, it’s surprising to find that in 2024, a wage gap still exists. You might expect things to be more balanced by now, but the reality tells a different story. Women are still earning less than men for the same work, highlighting a persistent issue that needs further attention and action. We know a gender wage gap exists. But just what does this mean for you? And more importantly, what is being done about it? Read on to find out. 

The gender wage gap is the difference between what men and women are paid. It refers to the lower median annual pay of women who work full-time, compared to the pay of men who work full-time. Overall, women still only make about 82 cents for every dollar compared to men, according to Pew Research. While this differs across jobs, full time versus part time, and geography, the statistical differences are meaningful and compelling. This inequality in pay tends to get worse for older workers. For example, on average, women 20 to 24 years old make 90 cents on the dollar, while women who are 45 and older make roughly 77 cents on the dollar.

This slow progress is in contrast to the more significant strides made in the past. For example, in 1982, women’s earnings were just 65% of men’s. Despite efforts over the years, achieving equal pay between men and women continues to be an elusive goal.

What factors contribute to the gender wage gap?

Research supports a few various factors that contribute to the gender wage gap.

Occupational clustering and preferences

Women often work in different jobs or industries compared to men, which affects earnings. For example, women are overrepresented in low-earning occupations such as cashiers, administrative assistants, and childcare workers. This overrepresentation can be because of discrimination, pushing women out of higher-paying occupations, or socialization, leading women to choose these jobs. A study noted a “care penalty,” where caregiving jobs pay less even when requiring similar skills as other jobs, disproportionately affecting women​​.

Differences within occupations

Research shows that the wage gap is more because of differences in pay within occupations rather than across them. According to a 2022 U.S. Department of Labor blog post, even when accounting for measurable differences such as age, education, industry, or work hours, a significant portion of the wage gap remains unexplained, and it’s likely that some of this is due to discrimination. The largest identifiable causes of the gender wage gap are the differences in the types of jobs women and men tend to work. Women are more likely than men to work in lower-paying jobs, and even within the same occupations, women earn less on average than men.

Hours worked and labor market experience

The number of work hours and labor market experience are significant factors in the gender pay gap. Women are more likely to work part time, leading to a wage penalty for fewer work hours. Women’s labor force participation has increased, but the earnings gap persists, partly because many jobs reward long work hours, affecting women, especially during childbearing years. 

Women’s representation in top-paying jobs is also low. The gender earnings gap widens with age as the experience gap increases. A study using longitudinal data found that the gender earnings gap increases with age because of these factors​​​​.

Parenthood and family responsibilities

Parenthood is a significant factor in the gender pay gap. Mothers are less likely to be in the labor force and tend to work fewer hours, which reduces their earnings. Fathers, on the other hand, are more likely to work more hours, leading to higher pay. This fatherhood wage premium widens the gender pay gap. Family needs also influence the types of jobs women and men pursue, contributing to occupational segregation​​​​​​.

Discrimination and stereotypes

Discrimination plays a role in the gender wage gap. Even after accounting for factors like labor market experience, hours worked, education, and occupation, a substantial earnings gap remains. This gap is not fully explained by differences in experience, training, and occupation alone. As noted by the Economic Policy Institute, girls are often steered toward gender-normative careers from an early age, and women may be discouraged from certain career paths due to industry culture and experiences of sexism, especially in STEM fields. This steering and discrimination contribute to occupational outcomes and the pay gap .

The U.S. Department of Labor also acknowledges the impact of gender and racial wage gaps, occupational segregation, and the disproportionate burden of caregiving costs on women workers, especially women of color. These factors contribute to wage disparities and reflect larger workplace and societal discrimination .

The wage gap spans professions and locations

The gender wage gap appears to have little to do with educational attainment — women across education levels have lower earnings on average when compared with their male counterparts, according to the Economic Policy institute. This is consistent across job types and functions. Women make as much or more than men do in just a few professions, such as medical assistants, healthcare support, or electrical engineering. 

The gender wage gap varies in severity across the U.S. Wyoming has the largest pay gap, with women earning 72 cents for every dollar a man makes. As of 2023, among full-time, year-round workers 15 and older, women in New Mexico earned approximately 85 cents for every dollar earned by men, reflecting a 15% gender pay gap among full-time workers​. 

The wage gap for part-time workers 

When looking at the wage gap for part-time workers, it’s not quite as simple as saying it’s just a bit smaller than for full-time workers. While part-time work did see some wage growth, it wasn’t as big as for full-time jobs, according to Pew Research. This gap varies by gender and whether someone has kids. For example, part-time working moms earn about 80% of what moms who work full time make. Also, the difference between part-time and full-time pay hasn’t changed much since the mid-2000s, but it started to get bigger in recent years. So, while part-time workers might see some pay benefits, there’s still a noticeable gap compared to full-time workers.

What about unemployment rates between genders?

In the U.S., there’s a bit of a difference in unemployment rates between men and women, according to the Bureau of Labor Statistics. The latest figures show that about 3.6% of adult men are unemployed, compared to 3.3% of adult women. This small difference points to various reasons like the kinds of jobs men and women have, how much education they’ve got, and other social factors. It highlights why it’s important to keep looking at how job markets work differently for men and women.

How does the gender wage gap impact retirement savings?

The gender wage gap can significantly affect women’s retirement savings. Because women typically earn less than men, they often have less money to put aside for retirement. This lower income over a career means smaller contributions to retirement accounts and less compound interest over time. Additionally, women tend to live longer than men, requiring more savings for a longer retirement period. These factors combined can lead to a substantial gap in retirement savings between men and women.

PRO TIP! To understand how these dynamics affect your retirement savings, MoneyLion’s new savings calculator is a handy tool. It not only helps you project the growth of your savings over time but also offers insights into various savings opportunities. This can be particularly useful in planning for a secure retirement, especially in light of the challenges posed by the gender wage gap.


PRO TIP! MoneyLion’s new savings calculator can show you how much your savings can grow over time and shows you available savings offers!

Projections are hypothetical and do not represent tax, investment or other financial advice.


Active efforts and campaigns for equal pay

Now that you understand the significance of the wage gap, you’re probably wondering whether anyone is fighting to change it. Various efforts are underway to tackle the wage gap. For example, the Equal Pay Today campaign is working across the United States to address pay disparities that affect women, people of color, and the LGBTQ+ community. 

Similarly, the Equal Pay International Coalition (EPIC) is focused on ensuring fair and productive employment for all, including young people and individuals with disabilities, aiming for these goals by 2030. On a policy level, the Biden-Harris administration has been pushing initiatives to promote equal pay and gender equity. These are just a few examples of the widespread efforts to combat wage disparities and work toward pay equality.

MoneyLion is empowering women to take control of their finances with a range of tools and resources. Education on money management and investing is especially crucial for women as they play an increasingly critical role in the workforce and entrepreneurial space. MoneyLion offers tips for women to enhance their financial well-being, such as taking charge of their budget, looking for opportunities to increase pay at work, finding remote work opportunities, and starting side hustles. We also stress the importance of investing early, staying on top of credit scores, networking with other women about finance, and following female finance leaders.

Women making strides 

Yes, there’s still a pay gap between men and women, but that doesn’t mean you can’t be ahead of the game. Thanks to resources like those from MoneyLion, women are getting the help they need to manage their money. Every step forward counts, and with time, hopefully, things will get even better. For now, women have lots of options to help grow their savings, learn about money, and work toward a bright and financially secure future. Keep your head up and keep moving forward.

FAQ

Is the gender wage gap the same in every country?

The gender wage gap varies between countries, influenced by different economic, cultural, and legal factors in each nation.

Are women of color more affected by the gender wage gap?

Yes, women of color are often more affected by the gender wage gap due to a combination of racial and gender biases.

What can people do to address the gender wage gap?

People can address the gender wage gap by advocating for equal pay policies, supporting transparency in salary disclosures, and promoting fair hiring and promotion practices in their workplaces.

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