What's Next To Do: Gender Wage Gap Persists in Every State, Industry
We’re not throwing any parades to celebrate the slightly smaller gender wage gap in this country in 2015. Because it is not good enough. But we are aiming to close the wage gap by 2025.
According to a new study by PayScale.com of 1.8 million American workers, in every state of the union, the average working woman earns less than the average working man. The raw pay gap ranges from -28.8 percent in Wyoming to -15.2 percent in Vermont.
“The pay gap is much smaller than is often reported once you control for the factors that impact compensation, but it persists across job types, job levels, industries, geographies, etc.,” says Lydia Frank, vice president of content strategy for Payscale.
“And what’s as important, if not more important, than the conversation around equal pay for equal work is the under-representation of women in the best-paying jobs in the U.S. workforce, whether we’re talking about industries like tech or more senior roles within an organization (director, VP, C-level executive).”
The Payscale study also shows that the more education a woman has, the more likely she is to claim that gender has kept her from a promotion. For women leaders and women aiming for management and a CEO spot, this is bad news indeed.
More than 35.9 percent of women with an MBA degree say gender has been the factor that has kept them from a raise or promotion, while only 5.3 percent of men with an MBS said the same.
A third of the women surveyed with JD degrees, or women lawyers, said that gender was a barrier to advancement, while only 4.9 percent of men with law degrees said gender was a barrier.
“Generally, the more educated a woman, the more likely she is to give her employer a low rating on addressing workplace gender inequality, with female MBAs (37.0 percent) and Ph.D.s (36.1 percent) being the most likely to give low ratings,” the report states.
“The largest discrepancy for low ratings between men and women is among MBAs – female MBAs are the most likely to give a low rating to their employer while male MBAs are the least likely at 11 percent.”
The degrees of women reporting that gender is a barrier, also varies widely by state. In Utah, 29.8 percent of the women say gender has kept them from getting a promotion, while in Wyoming, only 10 percent of women report the same reason for a lack of promotion.
“Ingrained beliefs shaped over a lifetime do not change overnight. And, as far as we’ve come in terms of the advancement of women in the workforce, many people still have some strong opinions on gender roles,” Frank says. “When individual managers are making decisions about employee performance and whom to promote, biases are bound to influence decisions. It’s not necessarily intentional, but every person has bias, whether they’re aware of it or not. All you have to do is look at the percentage of female CEOs in the S&P 500 – 5 percent – to understand that women are still bumping up against a glass ceiling,” Frank says.
According to the Payscale study, “Women are less likely than men to be in management roles. The difference grows as we consider higher levels of management and career tenure. Late-career men are 41 percent more likely to be in management roles than women, and 171 percent more likely to be vice presidents or C-Suite executives.”
Women make the most in the tech industry, with the media controlled pay for women at $76,400 per year. But that compares to men in tech earning $77,000 per year. In tech, women are 31 percent of the employee base survey.
Women make the lowest salary in accommodation and food services, with women earning controlled median pay of $34,700 per year, compared to men earning $36,200. There is near gender equity in that sector, however, with 50.3 percent of the employees surveyed male and 49.7 percent of the employees surveyed in foodservice female.
“The industry with the largest uncontrolled gender pay gap is Finance and Insurance (-29.1 percent), and the smallest uncontrolled pay gap is observed in the Business and Support Services industry (-7.6 percent),” according to the report.
The largest controlled pay gap is found in the Mining, Quarrying, and Oil and Gas Extraction industry (-7.4 percent), while the smallest controlled gap is in the Educational Services industry (-0.6 percent). In that sector, women earn a controlled median annual salary of $70,200, while men earn $75, 800. Men make up 68.1 percent of the employees in mining, with women accounting for 31.9 percent of the employees.
“Industries that tend to have smaller wage gaps between men and women also tend to have a higher representation of female workers. Education has the smallest controlled gap in our report at 0.6 percent, and 64 percent of the workers are women,” Frank says. “There are some exceptions. For example, both the Tech and Construction industries have relatively small controlled pay gaps between men and women in the same jobs. However, in both of those industries, women are still quite underrepresented in the best-paying jobs available within the industry. Closing the remaining pay gaps should be a focus for men and women doing the same work, but the opportunity gap is an even larger problem.”
The study concludes, “As workers age, men become significantly more likely to enter into management roles, with men being 25 percent more likely than women to be in management roles mid-career (age 35-40) and over 41 percent more likely late career (age 60-65).”
Perhaps surprisingly given these gaps, 68 percent of the women employees surveyed reporting that the employer is addressing these inequities proactively. More than 64 percent of men report the same. A near even percentage of men and women—both are 25 percent—say that no action has been taken by the employer to address gender inequities.
Frank says companies that ignore the gender inequities ultimately pay with failure to retain top talent. “Every company wants to attract and retain the best talent. It’s critical for business success. What this study shows clearly is that both women and men who don’t see their employer addressing gender inequities in the workplace are more likely to leave. Employers who take action on this issue have a competitive advantage in the war for talent,” Frank says.
In a separate 2016 report from Mercer, ‘When Women Thrive, Businesses Thrive” that analyzes data from more than 3.2 million employees from nearly 600 organizations in 42 countries, analysts drew similar conclusions.
“To break through the inertia and accelerate progress, organizations need actual behavioral change on the individual level — beginning with leaders and progressing peer by peer to create real momentum for change,” writes Patrician A. Milligan, Global Leader of When Women Thrive and Multinational Client Group at Mercer.
“Organizations need women and men together to recognize that all are better off economically and personally when women make up a larger share of the workforce.
And women and men need targeted programmatic changes built on robust proof of what is helping and what is hurting the advancement of women in their own organizations,” Milligan writes.
And the changes need to be systematic and not quick fixes.
“Educated women who are not in the workforce represent a potential GDP increase of about $12 trillion,” according to the report.
Other key findings from the Mercer report include:
Women make up only 35 percent of the average company’s workforce at the professional level and above.
Female representation declines as career level rises. Globally, women make up 33 percent of managers, 26 percent of senior managers, and only 20 percent of executives.
There is an increased focus on hiring and promoting women into executive ranks, seemingly driven by regulation and heightened media attention.
In the United States and Canada, working women are faring better than in other parts of the world, according to Mercer.
“Although women make up more of the mid- and senior-level workforce in North America than in any other region, current talent flows will yield virtually no gain in women’s representation at the professional level and above over the next decade,” according to the Mercer report.
“Although we have seen improvements in promoting and hiring women into the executive level over the past year, women are hired at lower rates at other levels. Again, organizations appear to be focused on a quick fix to improve senior-level representation.”
Mercer, on its www.WhenWomenThrive.net site, says an approach with individuals and organizations that upholds six pillars of an effective gender strategy will help to correct gender inequities in the workplace.
According to Mercer, for individuals, passionate leadership, personal commitment, and perseverance to meet the goals of gender equity in the workplace are necessary. On the organizational level, leaders need proof of what is and what is not working, processes that support women, including pay equity analysis and programs that support women’s needs such as programs addressing health and financial stability.
Progress at this rate is slow. And experts agree that waiting until 2134 for gender equity in the workforce is unacceptable. Take The Lead is on target to eliminate the gender gap in all sectors by 2025. That trims the gap to 109 years.
About the Author
Michele Weldon is editorial director of Take The Lead, an award-winning author, journalist, emerita faculty in journalism at Northwestern University and a senior leader with The OpEd Project. @micheleweldon www.micheleweldon.com