The Gender Pay Gap Isn’t Just About Discrimination
The gender pay gap has been a problem facing women in the workplace for decades, and despite some progress, it’s still a very real issue today. In 1974, women earned just 59% of their male counterparts’ median annual wages. By some calculations, that figure rose to 79% by 2014 (the BLS reports 83%). So it took 40 years for the gender pay gap to narrow by just 20-24%.
Most conversations about the gender pay gap focus on the causes of this difference. The usual culprits used to be lack of education and experience among women, and discrimination from mostly male bosses. While discrimination still exists, women have eliminated the educational gap and hold 49.3% of all jobs in the U.S. Yet the disparities in pay between men and women still exist.
Discrimination still plays a very big role in the gender pay gap, but research from Glassdoor shows it is also a result of the systemic sorting of men and women into different roles. Men still tend to pursue jobs with traditionally higher salaries than those favored by women. Social pressure still diverts men and women down different paths, and this may be perpetuating the gender pay gap more than we realize.
The Gender Pay Gap Data
Glassdoor’s research report, Demystifying the Gender Pay Gap: Evidence From Glassdoor Salary Data, found there is still a sizeable difference in pay based on gender in the U.S., U.K., Australia, Germany and France. And it’s not just a difference between men and women overall, the gap still exists after controlling for personal characteristics, job title, company, industry and other factors.
On average, Glassdoor’s salary data showed that women earn 76 cents per every dollar men earn. When some statistical controls like age and education were included, to “make an apples-to-apples comparison between workers,” the gap declined to 19.2%, or 81 cents per dollar for women. Adding in more controls such as job title, employer and location, to make female and male workers look more equal on paper, resulted in a gender pay gap of just 5.4% or 94.6 cents per dollar.
So which figure is correct? While the 76 cents, or something close to it, shows up in many headlines, it isn’t exactly fair to compare the earnings of a female cashier and a male lawyer. The national average gender pay gap should be broken down as Glassdoor has done, to highlight the differences in pay between women and men who hold similar jobs.
Glassdoor’s research went further, examining the gender pay in different industries. The report found that this “adjusted” pay gap, taking the statistical controls into account, was highest in health care (7.2%), insurance (7.2%), mining & metals (6.8%), transportation & logistics (6.7%), and media industries (6.6%). The industries with the lowest adjusted gender pay gap were aerospace & defense (2.5%), agriculture & forestry (2.5%), biotech & pharmaceuticals (3%), and travel & tourism (3%).
The Bureau of Labor Statistics also collects wage data to make comparisons between women and men, and found similar results based on 2014 earnings. Women’s earnings as a percentage of men’s were lowest in legal (56.7%), sales and related (67.8%), and protective services jobs (69.6%). The smallest gaps came in construction and extraction (91.3%), office and administrative support (90.9%), and food preparation and serving (90.5%).
Sorting Vs. Discrimination
Clearly the industry in which a woman pursues a career has an impact on her earnings compared to a male colleague. Traditionally men and women tended to work in different jobs and industries, but that has been changing as more women pursue a wider range of educational qualifications. Still, societal pressures push men and women in different directions, so we have been sorting ourselves along gender lines for some time now.
Glassdoor’s research concludes that 54% of the overall gender pay gap in the U.S. can be explained by this occupational sorting. Overt discrimination and workplace gender bias accounted for a further 33% of the gender pay gap in Glassdoor’s study. While both are a concern, occupational sorting looks to be a slightly larger problem, and one that we can start to change by understanding its causes.
Women are typically encouraged to pursue more service-oriented roles such as teaching or nursing. We also bear a much larger responsibility for work outside the office including child and elderly care. This adds more pressure on women to choose typically lower-paid, more flexible jobs, reinforcing our organizational sort. You could make the argument that organizational sorting is a form of gender discrimination itself, as far fewer men complain of low wages due to societal pressure to choose specific career paths.
How to Close the Gap
So in the 21st century women still face workplace discrimination and a gender pay gap, from the beginning of their working careers when they are guided towards certain fields of study, and throughout the course of their working life. We already know that educational gains and social progress have helped bring more women into the labor force overall, and reduce the gender pay gap by small amounts. But we need to address the dual problem of organizational sorting and discrimination if we want to close the gap entirely.
Glassdoor’s research suggests greater transparency can help reduce the gap further, by exposing the disparities in pay between women and men in the same jobs, and eliminating the taboo of discussing salaries and compensation overall. But we also need to address these forms of discrimination at their source.
Traditional roles for women in the workplace no longer apply, and young women should be encouraged to pursue any career regardless of how many (or how few) women have gone that route already. And employers need to be more open to alternative work schedules and flexible work arrangements, to accommodate the responsibilities of women (and men) outside the workplace. Plus, employers in industries with the largest gaps in pay can make more of an effort to train, then recruit female workers. Combined, these efforts would go a long way towards closing a gap that should have disappeared long ago.