Just last week, the University of Connecticut agreed to pay almost $250,000 to seven female employees after a routine audit by the U.S. Department of Labor found evidence of gender-based pay discrimination. But UConn isn’t the only one. Just two weeks ago, Yale University settled a similar gender-discrimination case by paying $87,500 to four female cardiologists in its medical school who were paid less than their male counterparts. Why does this keep happening? Shouldn’t we know better by now?
Despite what most people think, the gender pay gap still exists and has not closed much in the last 50 years. In fact, it has remained almost stable for the past 15 years or so. According to an analysis by the Pew Research Center in 2018, women in the United States are still earning 85% of what men do. That means for every dollar a man earns, a woman will only earn 85 cents.
Research from the Economic Policy Institute shows that women cannot “educate themselves out of” the wage gap. Even with a college degree, women workers are paid on average $10.20 less per hour than men, which amounts to a deficit of $21,216 per year.
PayScale explains that “part of the reason for the gender pay gap is that women are more likely to take a break during their careers to have children or to seek lower paid positions that offer more flexibility to make it easier to manage a family,” however, “some people mistakenly assume that this ‘explains’ the gender wage gap and eases fears over sexism.”
The bottom line is that even when controlling for differences in education levels, prior experience, occupation type, and leaves of absence, the data still reveals a disparity in how much men and women are paid for the exact same jobs. Why is this?
A new study out of Cornell University found that more than half of the pay gap is based on how we perceive the value of traditionally “male” or “female” occupations. Another 38% came from pure discrimination (conscious or unconscious). These two factors go hand in hand. As stated in the New York Times, “janitors (usually men) earn 22 percent more than maids and housecleaners (usually women),” even though their day-to-day labor tasks are very similar.
Furthermore, when women enter traditionally male-dominated fields (perhaps to earn a higher salary), they are still paid less than men. In fact, wages on the whole fell by 34% when women in large numbers became designers, and 18% when they became biologists. On the flipside, when men who go into “pink-collar” careers (think teaching and hospitality), they are often paid more. Computer programming, which used to be a “relatively menial role” performed by women, became a lucrative and prestigious career when men began to outnumber women in the field. It isn’t that women pick jobs that are less skilled or important, but rather that employers see women’s work as less valuable. We should change that.
Closing the gender pay gap isn’t only good for equality, but it’s also good for business. When women feel that they are treated unfairly or have no opportunities for advancement, turnover rates are higher, and companies miss out on talent and new ideas. Reducing the pay gap helps women advance to higher ranks within the company, which, according to a 2017 study by McKinsey & Co, makes the company 21% more likely to see above-average profitability.
Audits, like the ones done at UConn and Yale, are just the tip of the iceberg when it comes to solving this problem. Economists also say that sharing salary information is an important way of bringing these issues to light. Despite what many people think, discussing salary is completely legal, according to the U.S. Department of Labor. Companies like Whole Foods and Jet.com do a good job of being transparent about salaries for all employees. Furthermore, employers should not rely on past salaries to set pay, which just perpetuates existing inequalities. One solution is to use standardized pay scales, as companies such as Reddit and GoDaddy already do. For individuals who may not have bargaining power over their salaries, a promising way to ensure equal pay is “through the resuscitation of collective bargaining,” also known as unionizing. (Economic Policy Institute). Not only do unionized women have higher wages and benefits, but they are also more likely to have access to paid leave, paid sick days, vacations and medical leave. Although these recommendations are by no means exhaustive, they may be some of the most impactful and straightforward ways to close the gap and end wage discrimination against women.