Gender Pay Gap

Recently, a survey was released on the website SurveyMonkey questioning Americans about their thoughts concerning the gender pay gap. The survey had 8,566 participants and the results are slightly shocking. This survey presents that about 46% of men and 30% of women believe that the issue was made up to serve political purposes and consider it to be an illegitimate problem. Meanwhile, other statistics reveal that four in ten people think the problem is fake.  

Media coverage for this topic does not seem to help in convincing people about the legitimacy of this problem because more than a quarter of Americans feel as though reports concerning the pay gap are overblown, often describing it as fake news. Not only were men more likely to doubt the issue’s existence and be skeptical of media reports but they were also more likely to claim there is no difference by gender in compensation for the performance of similar tasks. Even after being shown the data from the US Census Bureau, which shows that women only earn (on average) 81 cents for every dollar a man makes, some men claimed that the reasons were because women generally choose careers that don’t pay as much and they work fewer hours compared to men.

Perhaps part of the cause for disbelief of the pay gap, and reports regarding the topic stems from confusion over how the problem is discussed and presented. Gary Burtless, a senior fellow in economic studies at the Brookings Institution, told CNBC Make It, “I think some people get it wrong that [the pay gap] is all about discrimination against women, and another group of people get it wrong that is has nothing to do with discrimination.”

This quote from Burtless can be confusing, yet it makes sense. People often view this problem as an all-or-nothing issue, meaning that the pay gap is either all about discrimination or isn’t about discrimination at all, even though discrimination against gender is only a factor of the pay gap. Factors such as job title, location, industry, educational achievements, company-size, prior work experience, and age, also cause wage gaps to emerge.

For example, a report by Glassdoor, a website that allows former and current employees to review companies and their management, found that women earn 21.4% less than men after looking at more than 425,000 salaries shared by full-time U.S. employees. However, when Glassdoor changed the search criteria and based comparison on age, education and experience, the gap slightly shrank to 19.1%. The gap shrank even further after Glassdoor refined the comparison by adding criteria to only include employees with the same work position, similar companies and locations, leaving the gap at 4.9%.

The data found by Glassdoor indicates that men and women’s industry segregation, or tendency to pursue occupations that pay differently, is the main reason for the pay gap, which accounts for about 56.6% of the overall pay gap. However, the data also means that not all of the 21.4% unadjusted wage gap can be explained by reasons like job type, industry, education or other factors. In fact, only 13.8% can be explained by differences between gender. Glassdoor states that the remaining 7.9% is likely due to “gender bias.”

Given the disbelief about the existence of the wage gap by such a large percentage of the population, it’s no wonder why legislative and industry efforts to address the issue have been met with slow progress. Due to this, Glassdoor estimates that it will be another 50 years before men and women achieve economic equality in the United States.

A reason why the wage gap is seen as a false issue created for political purposes is that Democrats traditionally have been aggressive with asserting government bills to repair the gap. Their latest effort is the Paycheck Fairness Act, which was passed on March 27 by the House of Representatives. The Paycheck Fairness Act aims to strengthen equal pay protections by banning employers from asking applicants how much they made previously, prohibiting employers from retaliating against workers who disclose wage information, and increasing penalties for equal pay violations. In order for this act to work companies would not only have to inform the Department of Labor how much they are paying employees but also demonstrate that any salary differences are based on elements other than sex, such as education or experience.

More than half of Americans support government involvement in the issue, with 70% of women and 41% men saying that they feel the government should be doing more. Nevertheless, Americans are now equally divided on their thoughts about what steps the government should take when passing new legislation. A little over half of people believe that disclosing gender and payment information to the government is helpful, while a similar number of 52% think that preventing employers to ask about previous pay would also help.

A recent study founded by the Harvard Business review found that when legislation requires companies to disclose gender pay discrepancies, the wage gap shrinks. The study also found that more women are hired and promoted to senior roles. However, the study notes that pay didn’t become more equitable because as women’s wages rose, male wage growth slowed.

Ever since legislation approved the Paycheck Fair Act, it has been found already that seven states, Puerto Rico and a few cities have already passed laws forbidding employees from inquiring about an applicant’s previous wage. These laws passed derive from an effort to end the pay gap, these states believing that their laws will force companies to offer jobs based on an individual’s skills and talents not on their current wages.

The Paycheck Fairness Act may be a good way to close that wage gap, but it also might not be. As Americans and women, we will have to wait to see how everything concludes. Hopefully, this pay gap issue will subside and women will be able to earn the same amount as men.

Statistics on the Gender Pay Gap