Unraveling the Mysteries of the Gender Pay Gap in the Modern Workforce

The gender wage gap has been, and still is, a persisting problem in the workforce. At this point in society, it is common knowledge that, on average, men have higher earnings than their women counterparts. A few studies are dissected and explained in this paper, showing why and how the wage gap even exists.

The Evolution of the Gender Pay Gap: A Peek into the Past 30 Years

According to a Pew Research Center study, since the mid-1980s, the gender wage gap has shrunk over time but is still relevant. About 30 years ago, a working woman would earn 64 cents for every $1 a working man would earn, resulting in a wage gap of 36 cents. During that period, it was observed that young women, however, earned more than working women in other age groups. Progressively, young women have started their careers at a higher level than the national rate of average pay for all working women, making it a trend. Today, the wage gap has decreased by 16 cents, with working women earning 84 cents for every $1 a working man earns. Even the group of young working women today has reached a point of having the lowest wage gap in modern history compared to men at the start of their working lives.

There are a few reasons as to why the wage gap has narrowed since the 1980s. First and most of all, women are better educated than they used to be and are more active in the workforce. Second, not only is it now more common for women to be able to have higher-paying jobs, but men’s earnings have slightly decreased over time as well. However, the amount that men’s earnings have decreased is not significant enough for it to affect women’s earnings.

Occupational Segregation: How Industries Shape Gender Pay Discrepancies

Some reasons for the wage gap persisting include women still being seen as more responsible for child/family care, women still being exposed to gender discrimination in the workforce, and the likelihood of staying in low-paying jobs if that is where they started. The industries that are dominantly male are exceedingly different from those that are dominantly female. For example, 90 percent of construction jobs and 70 percent of manufacturing jobs are made up of men, while 80 percent of the education and health industries are dominantly female. The differences in occupation regarding gender segregation are further discussed later on.

Earnings and Age: The Inequities Beyond the Prime Working Years

While it is obvious that wages increase with age due to the growth in human capital (knowledge and social/personality traits) as a person works and gains more experience in the workforce, wages also decrease later on in a person’s working life, specifically after the age of 50 as shown in data provided by the Federal Reserve Bank of St. Louis. This data also shows that single women, married women, and single men all earn similar wages; however, married men earn significantly higher wages than single women, single men, and married women. This does not imply that simply getting married guarantees a man to earn a higher wage. It is meant to point out that men who have higher wages are more likely to be married.

The American Association of University Women (AAUW) performed a study in 2009 of the gender wage gap one year after graduating from college. Fresh out of college with a bachelor’s degree, there is little to no gender wage gap at the start of women’s and men’s careers; however, just one year after graduating, it is observed that while working full time, the men in the study had already earned more than their women counterparts.

Women had an average salary of $35,296, and men had an average salary of $42,918. This study focused on the effects that college major, occupation, amount of hours worked, economic sector, and childcare have on the gender wage gap one year after graduating from college. All of these factors are controlled in the end by using regression analysis, and the wage gap is examined again. First, each factor is dissected and analyzed thoroughly.

The type of college institution was looked into in this study, and men and women were compared and matched on attendance of the same type of institution (private, public, four-year, and community college). For the most part, women earned higher grades than men. Those who earned doctoral degrees were mostly women as well, yet they still earned less than men. It is speculated that this may be the case because women are attracted to majors that typically don’t pay as much compared to majors that do pay very well.

For example, male-dominated majors include computer and information systems and engineering/engineering technology, while female-dominated majors include healthcare fields, education, social sciences, and humanities. An analysis done by Georgetown University’s Center on Education and the Workforce revealed that people who graduated with a major in science, engineering, and/or business, i.e., male-dominated majors, became financially better off than college graduates with a major in education, social work, and liberal arts and humanities, i.e., the female-dominated majors. Educational factors such as college majors are only a portion of the reason for the wage gap.

Gender Pay Gap: Occupations, Economic Sectors, and Post-College Choices

While college majors are a factor that goes into the wage gap, the types of occupations are a factor as well. After college, people start to enter the workforce as full-time working men and women in search of their careers. It was observed that after only one year from graduating college, more women worked as administrative assistants, social workers, teachers, and health care providers, while more men worked in occupations in management, math, computer, engineering, and physical science.

As stated before, the college graduates in the male-dominated majors had proceeded to work in the corresponding occupations, which are higher paying. Although male-dominated, of course, women are still given equal opportunity to work alongside in those same occupations. However, in whatever male-dominated occupation women worked in, they earned between 60-90 percent of what men in their field earned.

Along with the type of occupation, economic sectors also have different earnings. Overall, the nonprofit sector and government sector do not earn as much as for-profit sectors and the military. It is observed that women are more likely than men to work in the nonprofit and government sectors. While women still do work in the other sectors and have the highest earnings there among the others, those sectors are still largely made up of men. For example, the military sector is only made up of 1% of women. Nonetheless, earnings in the military and the nonprofit sector as well have no significant difference in earnings between genders one year after college graduation.

For the other sectors, there are significant differences in the income. In the for-profit sector, women earned only 80 percent of what men earned, and in the government sector, women earned 86 percent compared to their male colleagues. With a factor such as the amount of hours worked controlled for, it is still observed that men earned more than their female counterparts. Whether they work in the same occupation, the same economic sector, and work the same amount of hours, female workers still earn less than their male counterparts.

Debunking Myths: Motherhood’s Influence on the Gender Pay Gap

College major, occupation, and amount of hours worked may be the most contributing factors as to why there is a gender wage gap. The remaining known factors, and the smallest ones at that, are demographics and personal characteristics such as age, marital status, ethnicity, race, and location. However, parental responsibilities are a common assumption for the gender wage gap. It is viewed, societally, that the mother of a family will be more likely than the father to take time off or leave work to be able to take care of children and/or loved ones.

While this study only looked into men and women just one year after their college graduation, where most people had yet to start a family or have children at the time, it was found that those who did have children essentially earned more than their colleagues who did not have children. It may be common to mistake it as a factor because it can be explained why women could be earning a lesser income during periods of their lives when they do leave work to take care of family. With that being said, motherhood can be called a myth in regard to the gender wage gap.

With all of these factors controlled for, a third of the gender wage gap is still unexplainable. A woman and a man can have gone to the same type of college institution, graduated with the same major, and have the same occupation in the same economic sector while working the same amount of hours, and the woman will still earn less than the man. While the gender wage gap is small, right as someone graduates college and enters the workforce, there is no avoiding it for the rest of their careers. This issue is something that has been disruptive for women and families for too long now. Gender discrimination and bias may be suggestions as to why the rest of the gap is still unexplained and why it exists as well. While efforts to close this gap have been made apparent, little progress has actually been made throughout the years.

References

1. Pew Research Center. The Evolution of the Gender Pay Gap.
2. Federal Reserve Bank of St. Louis. Wages, Age, and Gender: An Economic Perspective.
3. American Association of University Women (2009). Behind the Pay Gap: Gender Earnings Post-College Graduation.
4. Georgetown University’s Center on Education and the Workforce. Discrepancies in Earnings: An Analysis of College Majors and Post-College Occupations.
5. U.S. Bureau of Labor Statistics. Gender and Occupation: A Look at Dominance in Various Industries.
6. U.S. Department of Defense. Gender Distribution in the Military.