Diving into the Gender-Pay Gap

Women continue to be paid less than men, but a recent court ruling offers hope to equal-pay proponents.
By: | April 10, 2018 • 4 min read

Two new reports released on International Equal Pay Day combine to paint an unflattering picture of employers’ efforts to achieve paycheck parity for men and women.

(For the record: The Equal Pay Act of 1963 “prohibits sex-based wage discrimination between men and women in the same establishment who perform jobs that require substantially equal skill, effort and responsibility under similar working conditions,” according to the Equal Employment Opportunity Commission. Title VII of the Civil Rights Act also makes it illegal to discriminate based on sex in pay and benefits. )

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The first report, from salary-information provider Payscale, was based on survey information from more than 46,000 respondents, and it finds that women earn 77.9 cents for every dollar earned by men in 2017. This figure has moved only slightly from 2016when women earned 76.3 cents for every dollar earned by men. (This is what’s known as the “uncontrolled pay gap,” which simply compares the salaries of all working women to all working men.)

But what happens to the pay gap after all compensable factors, such as experience, industry and job level, are accounted for?

It’s still not zero, Payscale says:

In fact, when an equally qualified man and woman do the same job, the woman earns 97.8 cents for every dollar earned by the man. Unfortunately, the uncontrolled pay gap hasn’t changed since our 2016 study.

What often gets lost in translation, according to the Payscale report, is what the uncontrolled gap truly representsthat women are less likely to hold high-level, high-paying jobs than men:

“Our data shows that at the start of their careers, men and women tend to work at similar level jobs, most often entering the workforce at the individual contributor level: 72 percent of men and 74 percent of women in the age group 20-29 are in individual contributor roles.

Over the course of their career, men move into higher level roles at significantly higher rates than women. By midcareer (age range 30-44), men are 70 percent more likely to be in VP or C-suite roles than women. By late career (age 45+), men are more 142 percent more likely to be in these higher paying roles.

On the flip side, women over the age of 30 are more likely than men to remain in individual contributor positions. By mid-career, 60 percent of women are in individual contributor positions vs. 52 percent of men. By late career, 59 percent of women are in still individual contributor positions vs. 43 percent of men.”

Meanwhile, a new report from HR analytics firm Visier finds that “the gender pay gap for workers under age 40 increased by 17 percent [in 2017],” when compared to 2016.

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The report states that, in 2015, women under age 40 earned on average 81 cents for each dollar earned by men. In 2016 this wage gap improved slightly to 82 cents. However, in 2017 this gender wage gap for younger women increased, with women under age 40 earning an average of 79 cents for each dollar earned by men. At the same time, Visier reports that the gender wage gap for workers over age 40 did not experience any meaningful improvement.

Despite these gloomy reports, there is reason for hope: On Monday, the Ninth Circuit Court of Appeals ruled that an employee’s prior salary cannot be used to justify paying women less than men in comparable jobs.

(We’re already busy writing up an analysis of that decision, so stay tuned here for more on the topic soon.)

Web Editor Michael J. O’Brien has been with HRE for more than a decade and holds a degree in economics from Boston College. He can be reached at [email protected]

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