Understanding the Data Behind the Gender Pay Gap

For years, the gender pay gap has been a point of contention in debates surrounding income inequality and equal rights. Some question the legitimacy of Equal Pay Day—a symbolic day designed to draw attention to the gender pay disparity in the United States. Others celebrate the conversation and hope for a brighter, more balanced future.

Often, building a point of view on a topic like this comes down to facts. And on the subject of pay and gender, there are a lot of facts, figures, and statistics. Here are a few you’ve probably seen—and some you maybe haven’t—that have a part to play in the pay inequality saga. Let’s start with the most commonly reported numbers in the gender pay gap conversation.

Is there a gender pay gap?

According to the data, there is. From 2017 to 2019, PayScale, a compensation software, and data company, surveyed 1.8 million people on their “compensable” and demographic factors. Here are some of the insights they gleaned from the two-year analysis:

• Comparing all working women to all working men, women earn 79 cents for every $1 earned by a man. This is called the “uncontrolled” gender pay gap.
• Comparing working men and working women doing the same job, with the same qualifications, women earn 98 cents for every $1 earned by a man. This is called the “controlled” gender pay gap.

For this piece, we’ll focus on the “controlled” group. In the controlled group are women in the same job, holding the same level of experience as men.

• Asian women might have an advantage over their male counterparts. On average, they make $1.02 for every white man’s dollar.
• Black or African American women have the biggest gap. These groups make 97 cents for every white man’s dollar.

Check out the differences by position and education.

• The higher the position at work, the wider the gap. By the time Asian women become executives, they, too, will make less than $1 for every white man’s dollar. White and black or African American female executives will earn closer to 95 cents for every $1 earned by a white man.
• Separated by education level, the women with the highest degrees were also those with the biggest gap. Those with a doctorate (PhD or MD, DND, etc.) and those who graduated with a law degree were the most under-compensated, compared to white men.
• Women with no degree made up the only education group compensated equally to their white male peers.

All told, some industries are closer to equal than others.

• Men outnumber women in tech. But tech is the only industry where women appear to be earning equal pay to men in the same jobs, with the same experience.
• Occupation-wise, women in community and social services jobs earn the same as men.
• Women in installation, maintenance, and repair, however, have the biggest gap. Women in the controlled group earn an average of 94 cents to the man’s dollar.

What are some contributing factors to the gender wage gap?

When two people doing the same job with the same experience earn different wages, the first question anyone asks is why? In this case, we know that gap is based on gender. Here are a few of the most common responses for why there’s a pay discrepancy between men and women:

• Employers or hiring managers discriminate, intentionally or unintentionally.
• Women go on maternity leave. Though more and more companies are starting to offer parental or paternity leave.
• Men are better negotiators when it comes to starting salaries or raises.
• Women undersell their skills, while men oversell their abilities, for promotions or hiring.
• Women take more time off or start and stop their careers to care for children.

Here are some other factors, based on a 2019 scheduling survey from TSheets by QuickBooks:

• More men than women are salaried employees, as opposed to hourly. 34% of men surveyed said they were salaried, compared to 25% of women.
• Women are also more likely to be victims of wage theft. 16% of women said they’re not paid for hours worked outside of their scheduled shifts, compared to 9% of men.

Is it any wonder, then, that more men (69%) than women (55%) said they’d happily stay in their current job for the next three years?

Why does the gender pay gap matter?

It’s easy to say that an average 2-cent difference between male and female peers doesn’t matter. But once again, turning to the data, here’s how 2 cents begins to add up to a lot more.

Scenario: A man and woman work the same job and have the same experience. But for every dollar he earns, she earns 98 cents.

• If he earns $25 per hour, she’ll earn $24.50 per hour.
• In an 8-hour day, he’ll make $200, and she’ll make $196.
• If the average employee works 260 days in a year, he’ll earn $52,000 a year, and she’ll earn $50,960.
• In 40 years, making the same amount of money per hour, he’ll have made $2,080,000, and she will have made $2,038,400.

By the end of their careers, the man will have earned $41,600 more, based on a 2-cent gap.

4 things we can do about the gender pay gap

Looking back at those commonly (and not-so-commonly) cited factors, it’s easy to see how conversations can escalate into arguments. No business owner likes to think of themselves as sexist or discriminatory. No employee wants to feel like the small things they do, like staying home with a sick child, will make their employer value them any less. But take the heat out of the debate, and there are a few things employers and employees can do to close the gap.

1. Employers can conduct annual or bi-annual pay audits. Compare men and women who share the same job and have equal experience. If there’s a gap, study the factors behind it and adjust salaries as needed.
2. Similarly, employers can audit their employees’ classifications. Are men and women in similar roles treated equally in regard to who is salaried and who is hourly? Adjust as needed.
3. Employees, both men, and women, can encourage transparency. Intuit is one company that shares its gender equality index with employees. Not only does this increase trust, but it holds employers accountable for gender pay equality.
4. Employees can grow their abilities in negotiation and skills-sharing. If women tend to underrate their talents, confidence-building activities and mentorships might help. And on the employer side, managers should enter salary discussions with a fair number from the beginning. That way, candidates aren’t in a position to negotiate or lose, and pay is awarded based on qualifications.

With any luck, that tiny yet significant 2-cent gap will soon be a fact of the past.

Danielle Higley is a copywriter for TSheets by QuickBooks, a time tracking and scheduling solution. She’s been a contributor to MSN.com, FiveThirtyEight, and a variety of HR and business blogs where she can put her affinity for long-form storytelling to best use.