What Equal Pay Day Tells Us

Women-in-BusinessApril 14, 2015, was equal pay day. It represents how much longer a woman has to work to earn as much as a man did in 2014. The statistic is that women earn 78 cents for each dollar that a man earns and has to work more than 15 months to earn the same amount that a man does in 12. This doesn’t tell us the whole story.

It is based on comparing the median incomes of full-time employed men and women in 2014, across all jobs. Women generally have lower paying jobs than men do – there are significantly more male CEOs, CFOs, surgeons etc., than female. Women tend to go into lower paying positions than men do.

The question is – why do women tend to choose lower paying jobs? It is not because women aren’t as ambitious or hard-working as men. It is because women have to make different choices than men do.

As we have discussed before, women generally take on the majority of family responsibilities. Many of us were encouraged from a young age to focus on home rather than aiming for leadership positions. Hopefully now the tide is changing and girls are being praised for the same behaviors as boys rather than being labeled “bossy”.Like a girl

As adults, more women are making career choices based on what is best for their family where more men are making choices based on what is best for their career. I know, I made that choice and it has affected my career and earnings. And I would make the same choices all over again.

But the point is that women have to make a choice between career and family because there are not enough better options. If there were more flexible work options and maternity/family leave policies, women would have more choices. And there are companies that offer these options and they are seeing lower turnover and increased employee loyalty.

The gender pay gap

Comparing the median wages of men and women leaves a lot of important information out. There is a difference in the types of jobs that women and men tend to go into and this causes part of the difference. But there is also a gender pay gap in careers where men and women are doing the same job.

This gender pay gap varies depending on industry and job title. The smallest gap exists in lower paying jobs in which women are a larger percentage of the work force, such as health care technicians, office clerks and social workers. The wage gap is less than 10 cents per dollar for these jobs.

successful business womanSome of the largest pay gaps exist in higher paying occupations that are traditionally male-dominated, such as financial services, chief executives and supervisors. The wage gap in these jobs is 30 cents plus.

Why is there a larger gender wage gap in higher paying positions? Part of the issue is that women rarely negotiate their salaries. Men are much more likely to negotiate their salaries, ask for more money than women do and get it more often.

Even for the first job out of college, men tend to negotiate for a higher starting salary. The wage gap is narrower right out of college, but that small difference in starting salary becomes a wider gap over time. Men ask for promotions and raises more often than women do and have a higher rate of getting both.

So the answer is, in part, that women need to be better at negotiating and self promotion. But another issue women face is those who do speak up and ask for a raise or a promotion are less liked at work and may get fewer opportunities or more negative reviews because of it. It seems like a no-win situation. Men are rewarded for self-promotion and women are overlooked when they don’t speak up and penalized when they do.

Education, training and coaching can help women negotiate and promote themselves better in the workplace. It can also help those in leadership positions examine policies and behaviors to improve support for women in business.

The gender pay gap is more than a number or a date. It reflects on our society and culture and closing that gap will require all of us to look at how we react to women and girls and why we make the choices we do. The innovation we see in technology and business needs to carry over into the way we structure our careers and support girls and women.

 Sources:

http://www.washingtonpost.com/blogs/fact-checker/wp/2015/04/02/the-equal-pay-day-factoid-that-women-make-78-cents-for-every-dollar-earned-by-men/

http://www.inc.com/suzanne-lucas/5-ways-smart-people-are-solving-income-inequality.html?cid=sf01001

http://www.huffingtonpost.com/emily-baxter/how-the-gender-wage-gap-differs-by-occupation_b_7066158.html

http://www.fastcompany.com/3044613/strong-female-lead/today-is-equal-pay-day-how-can-we-finally-close-the-gender-wage-gap