The Gender Pay Gap

Tatiana Follett and Iris Hentze 2/12/2021

man and woman construction workers

Introduction

Prior to the pandemic, women in the United States earned just 89 cents for every dollar made by a man. Although not equal, the gender pay gap has improved markedly since 1980, when women earned 36% less than men. However, the rate has remained relatively stubborn over the last 15 years. The current recession caused by the COVID-19 pandemic has brought new challenges for women in the workforce and caused extensive female job losses. This webpage will review some of the existing research on the gender pay gap and explore some of the solutions states have pursued in recent years to address it.

Background and Research

The gender pay gap can be explained in part by “measurable factors such as educational attainment, occupational segregation and work experience,” according to the Pew Research Center. Women often have less market experience than men, as men are more likely to work when they have young children and more likely to work longer hours. Women are twice as likely to work in part-time jobs. Even when both men and women hold full-time positions, men are more likely to work longer hours. This “overwork” can result in higher pay for men. Women often take part-time work to accommodate other family duties such as caring for children or elderly family members. Studies show women are more often tasked with allocating more of their time towards unpaid labor as many of these activities have been considered “women’s work.” One study from the Bureau of Labor Statistics (BLS) states that between 2003 and 2007 women worked an average of 10.8 more hours a week doing unpaid household work than men. Illustrated by the chart below, the BLS breaks the unpaid work they measured out into four categories: household activities, caring for and helping household members, purchasing goods and services and travel-related to unpaid household work.

As seen in the chart below, the BLS found that women spent an average of 6.3 hours more per week doing household chores than men (15.5 versus 9.2 hours) and 2.4 hours more per week providing care to household members (4.4 versus 2.0 hours). Women also, on average, spent more time both purchasing goods and services and traveling related to unpaid household work per week than their male counterparts. Data from the Organisation for Economic Cooperation and Development (OECD) indicates that American men spend 141 minutes per day on unpaid household labor, while women spend 245 minutes. 

In line with this trend, the pay gap is lowest at the beginning of careers and slowly increases as women’s careers continue and as women are often forced to choose between paid work and family care responsibilities. This is especially true for Black women and men, in part because white men attain leadership positions at higher rates than women or minorities. 

The gender pay gap can be compounded for individuals with other, intersecting identities such as race and class. According to data from 2020, among women who hold full-time, year-round jobs in the US, Black women are typically paid 63 cents, Native American women 60 cents, Latinas 55 cents and Asian American women 87 cents for every dollar paid to a white male working in a similar position. Additionally, Black and Hispanic women are more likely to work in lower-paying service-industry jobs such as food service, domestic work and health care assistance. 

Finally, female participation in the workforce varies greatly by industry. In 2018, the female labor force participation rate was 57.1%. According to the BLS, women have relatively high participation rates in education and healthcare (74%), leisure and hospitality (54%), and other fields such as personal and laundry (54%.). In contrast, women have low rates of participation in fields such as software (19%) and as chief executives (27%.) 

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Average hours per week

Note: Data refer to the civilian noninstitutional population ages 15 and older.

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State Actions

The Federal Equal Pay Act (1963) mandates equal pay for equal work among men and women. The Equal Pay Act also covers benefits, bonuses and reimbursements for equal work. Since 1963 every state except for Mississippi has enacted its own version of an equal pay act. However, in response to persistent pay discrepancies, many states have revised or strengthened existing equal pay laws and taken additional steps to address inequitable compensation.

One approach is all about pay transparency. These measures commonly contain one of three provisions: (1) they prohibit employers from asking for salary history as a condition of being granted an interview or being hired, (2) they require employers to publish salary ranges, or (3) they allow for the disclosure of current salary and salary history among employees. Some state policies contain provisions for all three. Alabama, for example, passed legal protections for job applicants who choose not to disclose salary history as a condition of being granted an interview or being hired in 2019. Washington state adopted a similar policy that same year. Legislation passed in Hawaii in 2018 both prohibits employers from asking for salary history up front and prohibits employers from taking discriminatory actions against employees for discussing wages with other workers. Maryland’s most recent amendment to it’s Equal Pay Act took effect in October 2020. According to the Society for Human Resource Management, the bill requires employers to provide applicants, upon request, with a wage salary range for a potential position. The bill also creates a ban on disclosure of pay history and protects employees who make inquiries about their own wages. 

Recognizing and accounting for other, intersecting identities in equal pay laws is another approach taken by states to address continued pay inequities. In 2017, California amended its Equal Pay Act to prohibit pay discrimination against minorities. The amendment prevents employers from using prior pay history to justify a “sex-, race-, or ethnicity-based pay difference.” Illinois’ amendments to it’s Equal Pay Act took effect in September 2019. The amendments, like other states, prohibit inquiries into salary history and protect employee disclosure or inquiry into wages. The recently amended version of the Act also specifically states that, in addition to gender, no employer may pay wages to African-American employees at a rate less than what they pay an employee who is not African-American for the same work. Finally, New York’s Equal Pay Act requires that all employees in one or more protected classes be paid the same as an employee not in a protected class doing similar work. Protected classes are defined in statute to include age, race, color, national origin, sexual orientation, military status, and disability, among others. 

Multiple states also passed laws which broaden the definition of “equal” or “comparable” work and implement consequences for violating these laws. Maine amended it’s Equal Pay Act in 2019. Similar to other state laws, the Act prohibits unequal pay for equal work. Specifically, the Act mandates equal pay for both sexes for “comparable work on jobs which have comparable requirements relating to skill, effort and responsibility.” Finally, the Maine law also protects employees who take action to assist in the enforcement of equal pay. A substantial law, the Nebraska Equal Pay Act also prohibits unequal pay for “comparable” work. The Act states that employers cannot lower one person’s salary in order to comply with the equal pay requirement. Similar to the Maine law, the Act prohibits the discipline or discharge of an employee who takes action to enforce the provisions of the Act. The Act also establishes the powers of the Nebraska Equal Opportunity Commission

Finally, some states enacted laws which provide a more unique set of protections. Nevada N.R.S. § 333.182-188 (effective 6/30/2021) requires the state Purchasing Division to only engage with vendors who have submitted a bid or proposal for a state contract that pays their employees equal pay for equal work without regard to gender. The State’s Purchasing Division is required to establish a program to independently certify vendors that pay their employees equal pay for equal work. The amendment to the Wyoming Equal Pay Act places significant consequences on companies which do not adhere to equal pay laws by increasing penalties for violations of the Act. Employers who violate the Act face fines up to $500 and imprisonment up to six months. Finally, Colorado’s Equal Pay for Equal Work Act, SB 19-085, restructures the state’s existing complaint management system for equal pay claims. The state authorizes the director of labor and employment to create a complaint mediation process, including providing legal resources to claimants. The act prohibits wage differentials based on wage rate history or sex, but allows for disparities based on seniority and a number of other exceptions. The law enables the state to enforce employer pay transparency through levying fines against employers between $500 and $10,000 for violations. 

Legislation Currently Under Consideration

So far this year, states are continuing to consider legislation similar above. In Alaska, SB 16, would task the state with studying and reporting on equal pay for comparable work and is currently under consideration. The bill would require the State Commission for Human Rights to submit a report to the legislature annually including information regarding what extent employees are paid equal pay for equal work regardless of characteristics including race, religion, national origin, age, physical or mental disability, sex and others. Iowa’s legislature is currently considering a bill that would impact pay equity in a number of ways. First, it would follow what other states have done in making it illegal for an employer to seek salary history as a condition of an interview or employment. The bill would also make it illegal for employers to require employees to refrain from discussing salary as a condition of employment. Finally, the legislation would also establish an Equal Pay Task Force, charged with studying the extent to which the gender pay gap persists in the state and why.

In South Carolina, a bill is under consideration that would amend that state’s Equal Pay Act. Similar to action other states have taken, the legislation adds to the state’s existing equal pay statutes by elaborating on what is considered “comparable work” and “comparable jobs.” The bill also elaborates on the administrative and judicial consequences employers would face if found in violation of these laws. Finally, the Mississippi Legislature is considering equal pay legislation related to state employees and contractors this legislative session. Mississippi SB 2330, if passed, would prohibit the state or any of its political subdivisions from paying employees at wage rates less than those paid to employees of another sex for the same work. The bill does allow for wage differentials when based upon specific factors such as tenure. 

COVID-19 and its Impact on Women in the Workplace

Although data collection on the effects of COVID-19 on women in the workplace and the gender pay gap are ongoing, it is clear that the pandemic-related recession has disproportionately affected women. In previous recessions, such as in 2008, men reported higher rates of job losses than women. According to a report by the National Bureau of Economic Research (NBER), men are more likely to work in fields affected by a typical recession. In contrast, women are more likely to work in relatively stable fields, such as healthcare and education. The unique nature of a pandemic- related recession has reversed these effects, however. 

As the female labor force participation by industry data show, women are much more likely to work in hospitality, healthcare and education. While hospitality, healthcare and education are normally stable industries, they have been some of the hardest hit during the pandemic-related recession. Fittingly, the BBC has deemed the current economic downturn a “shecession,” noting that female job losses are 1.8 times greater than male losses. A report by the McKinsey Global Institute claims that women accounted for 46% of the pre-pandemic labor force, but account for 54% of recent job losses. The report states that, globally, women are 19% more at risk of losing their jobs due to COVID-19. Overall, labor market distribution accounts for 25% of the gender gap in job losses. McKinsey, along with other sources, claim that another reason for high female job losses is because women do about 75% of existing unpaid work and may have been overly burdened by increasing childcare needs due to the pandemic. Furthermore, cultural ideas about the value of keeping a job vary for men and women. This means that when jobs are scarce or domestic needs are high, women may be more likely to give up their jobs than men. Overall, McKinsey estimates that the failure to address these gender disparities could result in a $1 trillion lower global GDP in 2030 than if the pandemic had not occurred. 

While current data on the effects of the recession on the gender pay gap are inconclusive, some sources claim that there may be long-term effects caused by the disproportionate job losses experienced by women. The BLS published data on the median weekly pay differential between women and men in the first three quarters of 2020. The data are as follows:

 

Q1

Q2

Q3

Median weekly earnings - Men

$1,066

$1,087

$1,104

Median weekly earnings - Women

$857

$913

$902

Difference

$209

$174

$202

A more comprehensive chart, including information on minority women, is available on the BLS website. 

While evidence of an immediate gender pay gap change is inconclusive, the Society for Human Resource Management (SHRM)  indicates that there could be a longer-term pay differential. The SHRM claims that women “often” incur a pay penalty after taking a long period of time off of work, and earn 7% less, on average, than men in the same position. Due to the pandemic, women are more likely to take time off of work to care for children, thus presenting the potential for a widening pay gap. 

Tatiana Follett is an intern in the employment, labor and retirement program. Iris Hentze is a policy specialist in the employment, labor and retirement program. 

Additional Resources