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  • Writer's pictureMiriam Grobman

The Gender Pay Gap: Myth or Reality?

Gender pay gap cartoon

The current discussion about the gender pay gap often remains in the title: "Women make 20% of what men make," and each side tries to argue with singular arguments why the other one is wrong: "this happens because of discrimination" or "this happens because women lean out of the workforce or work part time." The reality is, as always, much more complex. 10 important things you should know now about the gender pay gap: 1. Women in the United States earn about 80% of what men do. White women earn 75%, asian women earn 85%, african american women earn 63% and hispanic women earn 54% of what white men do. 2. Women are more likely to work in lower-paying professions than men. Nevertheless, women now constitute 44% of the workforce in higher-paying management, business and financial occupations and majority of university graduates. 3. Experience and industry and occupation choices account for about 62% of the gender pay gap. The other 38% remains unexplained. 4. When controlling for same profession and role, the pay gap between men and women reduces to single digits, for lower paying jobs. 5. Yet, the higher paid the profession is, the more likely it is to have a double-digit gender pay gap (for example, male investment bankers, lawyers and surgeons earn significantly more than female counterparts). 6. Women don't reach the higher paying roles at the same rates as men do. According to PayScale, "Men are 85% more likely than women to be VPs or C-Suite Execs by mid-career, and 171% more likely to hold those positions late in their career. Conversely, by the time they reach age 60, more than 60% of women are still working in individual contributor roles, but less than 45% of men are still in this type of job." 7. Looking at 100k job offers and 15k candidates, found that companies offered, on average, 3% less to female candidates. They also found that female candidates straight out of college have higher salary expectations than men but the trend reverses in candidates with more years of experience. 8. Motherhood, on average, brings a pay penalty for women, and mothers have a harder time going back to the workforce after taking time off. Yet about 64% of young mothers remain in the workforce. 9. In more than 70% of married couples, men earn more than women. This, added to the rising costs of childcare, makes it more likely for women to take on childcare responsibilities and stay at home or work part time. 10. Regardless of what you believe about the reasons for the pay gap, money is power and the fact that women earn less than men on average has real economic, business, and political consequences.

Where do we go from here?

Closing the gender pay gap is a very complex problem that requires policy solutions like creating incentives for women to pursue certain fields and providing affordable childcare options for parents. In the meantime, what can companies and individuals do to help reduce the gap?

  1. Analyze and correct pay differences for similar roles within your organization

  2. Don't look just look at salary figures but also compare overall qualifications and level of experience of women and men in similar roles to identify when women (or men!) aren't being assigned to the right level of seniority

  3. Increase transparency of compensation and job descriptions per pay grade

  4. Encourage women to negotiate their salaries and to apply for higher roles. Share benchmarks, when appropriate

  5. Give special attention to new mothers to help them overcome temporary barriers and keep them in the workforce (and train managers to do the same)

  6. Don't assume that mothers aren't interested in a promotion. Ask!

Below are 10 charts to help you visualize the gender pay gap:

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