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Tuesday
Jul162019

As US women's soccer team rallies for equal pay, what to know about the gender wage gap

iStock(NEW YORK) -- The U.S. Women's National Team claimed its fourth Women's World Cup championship title last week.

Procter & Gamble -- through a full-page ad in The New York Times for its deodorant brand Secret -- made headlines by offering a donation of the team of $529,000, or $23,000 for each player, in an effort to close the gender pay gap between players on the women's team and U.S. Men's National Team.

But it's not just in the world of sports where we see a discrepancy in pay between the sexes or its effects. Here's what you need to know about the gender pay gap and what you can do about it.

First, let's define the wage gap:

We've been recording the wage gap since 1963, when the Equal Pay Act was enacted. It's calculated by dividing the national median income of all full-time, year-round working women by the national median income of all full-time, year-round working men.

This is significant when you consider that women are employed at the same rate, educated to the same level and often responsible for the same earnings in their families as men.
Is the wage gap that big of a deal?

Women earn 80 cents less than men. It can be broken down further by specific factors, such as location, education, industry, marital status and race. For example, black women make 61 cents to the dollar and Hispanic women make only 53 cents to the dollar, according to research from the American Association of University Women.

Is it going to close anytime soon?

Nope. The World Economic Forum estimates that it will take 202 years to close the wage gap.
Why do people say it doesn't exist?

Let's go through each of the most frequently cited arguments on why the wage gap doesn't exist. (Spoiler alert: it does.)

'Women choose to work in lower paying jobs'

Actually the opposite is true: a report from the Institute for the Study of Labor shows that when women become more educated and experienced and enter traditionally male-heavy jobs, the pay declines for the job overall.

The reverse, too, is true. For example, computer programming used to be an unglamorous, predominantly female job. Now, it's one of the most lucrative career paths and is pretty much exclusively male.

'Women don't negotiate'

According to a study by the University of Wisconsin, the University of Warwick and the Cass Business School, women do negotiate as much as men. They're just less likely to receive pay bumps.

We think this is due to what is called "the double bind." Essentially it's when women are perceived to be acting outside of the norm of how we expect a women to be ("the good girl"), and then we get penalized. So, basically, when we are assertive and ask for a raise, we're perceived as aggressive and increase the chances of not getting it.

'Women leave the workforce to have children'

It's estimated that for every child a woman has, she suffers a 5% wage penalty at work, according to a study from Third Way. I want you to compare that to the fact that fathers earn 11% more than non-fathers.

Research has shown that employers are less likely to hire women with children compared to childless women, and if they do choose to hire a mother, employers offer a lower salary than they do to other women.

'Men have more education and experience'

OK, two things to note here:

One, women are 60% of today's college graduates, according to the National Center for Education Statistics.

Two, when both genders have more schooling, the wage gap actually widens for women. PayScale found a 4.6% wage gap between male and female M.D.s and a 4.7% gap between MBA holders.
Why should we care about it?

Closing the wage gap benefits everyone, not just women. If women were paid equally by 2025, we could add $12 trillion to the U.S. GDP, according to the McKinsey Global Institute. So that's cool.

The poverty rate for working women would be cut in half, says a report from the Institute for Women's Policy Research. This is significant because women currently make up 70% of Medicaid recipients and 80% of welfare recipients, so if we get them out of poverty, it will cost less for taxpayers.
So what can you do?

Despite the fact that the wage gap isn't going to close for a long time, there are four things you can do right now to create change:

1. Get a raise.

2. Talk to your company about pay transparency as well as family leave since without that, it makes it even harder for women to close the wage and leadership gap. There are statistics out there that will help you make a strong case for why these things help the bottom line.

3. Get involved in local and state politics. Familiarize yourself with what legislation is on the docket and where you can lend your support. Things like the salary history ban, increasing the minimum wage, paid family leave and affordable child care are all things that help close the wage gap and improve life for all.

4. Join Ladies Get Paid!

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