What is the gender pay gap? And why do women get paid less than men?

“What is the gender pay gap?” You may have found yourself asking this question whenever you switch on your TV and listen to economists, talk show hosts, and politicians argue about it. What started as an insight into the median pay disparity between men and women has ballooned into one of the most debated topics in the world.

In this blog, we’ll try to shed some light on:

• The meaning of gender pay gap

• The reasons why the gender pay gap exists

• How to advocate for a fair and equal pay at work

What is the gender pay gap?

To put it simply, the gender pay gap (or wage gap) is the average difference between the salaries/wages paid to men and women. According to statistics provided by the Pew Research Center, women earned an average of 82 percent of what men earned in the United States in 2022. The results haven’t changed much since 2002, when the gender pay gap stood at 80 percent.

The gender pay gap is divided into two fragments: controlled and uncontrolled. The controlled gap follows the principle of “equal pay for equal work,” and it measures the pay disparity among men and women for the same type of job role. In contrast, the uncontrolled gap measures the pay differences between men and women holistically. 

For the year 2023, payscale predicts that the controlled gender pay gap will remain at 99 percent. This means that for every $1 made by men, women will earn $0.99. Even though this difference might seem small, it can increase substantially when compounded throughout a lifetime career. 

Gender pay gap - key statistics

According to Forbes, women in the United States earned 17 percent less than men on average in 2022. For the same year, only 8 percent of the Fortune 500 CEOs were women. Even after taking all controlled factors into consideration, women still earned only 95 percent of what men made at executive roles in the United States.

The gender pay gap was also prevalent in entry-level jobs. The National Association of Colleges and Employers reported a gap of 18 percent between the annual salaries of women and men in the U.S. in 2022, where men earned $64,000 while women made only $52,000 for entry-level jobs.

During the year, there was only one job where men and women earned the same pay: teaching assistant. Both genders made an average $34,000 in various teaching assistant jobs in 2022. Another profession with a low gender pay gap includes physical therapists. 

This year, the largest gender pay gap is observed in the real estate sector, where male real estate brokers and sales representatives make 60 percent more than their female counterparts on average. Similarly, personal financial advisors, security guards, bus drivers, and recreation workers are other professions with a gender pay gap exceeding 40 percent.

What is the impact of the gender pay gap?

Due to the existing gender pay gap, women lose an average of $530,000 over the course of their career. The number doesn’t bode well for college-educated women, who stand to lose roughly $800,000 throughout their entire professional careers. 

While these numbers will depend on a woman’s career choice as well as her education, time off duration from work, and the overall economic conditions, these numbers are still significant. The gender pay gap will also play a role in retirement insecurity of older women across the United States.  

What are the root causes of the gender pay gap?

The first step toward bridging the gender pay gap is to understand the root causes behind this issue. Here are a couple of reasons behind the prevailing pay disparity between men and women.

Hiring bias

When recruiting for different job roles, gender bias is still prevalent among many industries. According to research at Harvard, women tend to rank higher than men in several leadership qualities including innovation, communication, and problem-solving, yet these are often overlooked when it comes to hiring. Hiring bias often stems from certain preconceived notions on gender roles. 

Unequal bonuses

Not only are women often ignored for higher positions in an organization; many of them receive bonuses that are far less than their male counterparts. A study in Australia revealed that men earned an average of 35 cents more than women in bonuses in 2022. 

Industry regulations

Many economists point out that the reason why women earn less than men is because they opt for lower-paid jobs such as nursing, teaching, childcare, and social services. 

Personal choices

As mothers, women are often expected to take time off from work to raise children. This could explain why the uncontrolled gender pay gap is at 83 percent, since it takes into consideration women who are on maternity leave or temporary break from work to look after their kids.

Lack of flexibility

Most workplaces, especially the ones that offer high-paid jobs, offer little flexibility for working mothers. Some organizations, such as law firms, have long working hours and expect people to put in some extra hours as well, and this is where working mothers are at a disadvantage. However, as the world is slowly moving toward remote working, working mothers may achieve the perfect work-life balance that will allow them to dedicate more time to work and help close the gender pay gap.

How do you fight for equal pay?

One of the best ways to close the gender pay gap is to know your worth and ask for equal and fair pay. Here’s how you can advocate for equal pay at work.

Negotiate your salary

When you’re applying for a job for which you know the salary range and you feel that you’ll be underpaid, you should negotiate your compensation package. A quick online research will help you determine the ideal pay for the job you’re interviewing for. If you’re unsure how to negotiate on your salary, read up some articles online or talk to an expert. 

Practice civic engagement

Even though the gender pay gap has been significantly reduced, it still exists. Furthermore, each state and jurisdiction has its own gender pay gap, which you can easily discover by doing some research. Once you’re aware of this figure, you can negotiate for a salary that takes this pay gap into consideration and ask for a better compensation package. 

Learn from successful women

Is there a successful woman who inspires you? Someone who has fought against all odds and carved out her own path to success? If yes, then turn to her for some advice. Whenever you find a mentor, consider reaching out to them and getting them to engage in conversation. The more you talk to them, the more you learn, and the better equipped you will be to tackle difficult conversations (such as salary negotiations and equal pay).

Key takeaways

1. The gender pay gap exists. According to most economists, women make roughly 80 cents for every $1 made by men.

2. When analyzing the gender pay gap, the controlled gender pay gap is more important. It compares the salaries of men and women with the same education and skill set working the same job.

3. There are several ways you can do your part to close the gender pay gap, the most important being negotiating on your salary and asking for a fair and equal remuneration package.