The Truth About The Gender Pay Gap

According to the latest data from the U.S. Census Bureau, women who work full time are paid only 77 cents to the dollar their male counterparts are paid. Over the last decade, the gender pay gap has held steady at 23 percent, and it shows no sign of budging. Women and their families can’t afford that loss. We need fair pay not just for women, but for our nation’s economic vitality.

Part of the pay gap is explained by the types of jobs in which women typically work, the number of hours they work, and the gaps in labor force participation that occur when family issues take women out of the workforce. But the entire pay gap cannot be explained away by these factors. A recent AAUW analysis found that among full-time workers one year after college graduation–well before most men and women start having children–women were paid, on average, just 82 percent of what their male peers were paid. After controlling for hours, occupation, college major, and other factors that affect pay, the gap shrank but did not disappear. An unexplained pay gap of 7 cents remained, and it is likely that bias accounts for at least some of this disparity.

But this is only the beginning. These early disparities in income often have long-term economic consequences, such as lower lifetime pay, tighter family budgets, and eventually, reduced Social Security and other retirement benefits. Another AAUW report found that 10 years after college graduation, women were paid just 69 percent of what men were paid, and the unexplained pay gap increased to 12 percent. Among our elderly population, women are much more likely than men to live in poverty, with 11 percent of women over the age of 65 living in poverty compared with 6.6 percent of men.

While the pay gap is a problem for all women, women of color are usually hit the hardest. Data from the U.S. Census Bureau shows that Native Hawaiian and other Pacific Islander, African American, and American Indian or Alaska Native women are paid only 66, 64, and 60 percent, respectively, of what non-Hispanic white men are paid. Hispanic women fare the worst, receiving a dismal 53 percent of what white men are paid. The effect of these disparities becomes clear when one looks at the poverty numbers recently released by the Census Bureau. While less than 9 percent of white men live in poverty, the number jumps to 29 percent for black women and 28 percent for Hispanic women. And in some states, more than 40 percent of Native American women and girls live in poverty, according to a recent study by the Center for American Progress.

These numbers are unacceptable, but change may be a long time coming. The Institute for Women’s Policy Research found that, at the current rate, the gender pay gap won’t close until 2058–a date so far in the future that even most millennials will already be retired. What a gloomy prospect for American workers and their families, who cannot afford to wait more than 40 years to start being paid what they deserve.

The past decade of stagnation has been discouraging, but there is one important step that must be taken to help fix this systemic problem and improve our economy. For two years, the U.S. Department of Labor has been saying it will develop a new tool to collect information on salaries, wages, and other benefits for employees of federal contractors. This tool is essential to giving employers the information they need to pay fairly, and it will give the Department of Labor the information it needs to make sure companies that are receiving our tax dollars are following the law. AAUW is urging the Department of Labor to speed up its work on this important data collection tool. In addition, employers in every sector need to change their mindset, pay fairly, and tailor work that allows for better work-life balance for women and men.

Getting accurate information is just one way we can take action now. Especially in these tough economic times, no woman should have to work her whole life knowing that her retirement savings likely won’t match the savings of her male coworkers. It’s an issue that touches all ages, classes, and yes, both genders, because when women don’t take home the equal pay they have earned, everyone hurts.

Linda D. Hallman, CAE, is executive director of the American Association of University Women (AAUW). Since 1881, AAUW has empowered women and girls through advocacy, education, philanthropy, and research. AAUW’s nonpartisan, nonprofit organization has more than 165,000 members and supporters across the United States, as well as 1,000 local branches and 800 college and university partners. Since its founding, AAUW’s members have examined and taken positions on the fundamental issues of the day — educational, social, economic, and political.