Why Do Women Earn Less Than Men?

This article by Mark Henricks comes from partner site Mint.

Women are paid 77 cents for every dollar earned by men, according to a recent study by the American Association of University Women. Does that mean a female worker is doomed to make 23 percent less than a male counterpart?

Not necessarily, according to experts who’ve analyzed wage-gap data and found that female workers are actually likely to be able to earn nearly if not exactly as much as males.

Gender discrimination

The natural assumption is that the wage gap is due largely or entirely to gender discrimination. This impression is supported by stories of the multi-million-dollar sums large employers have paid to settle lawsuits by women workers alleging they earned less because they are female.

However, there’s more to the wage gap than lawsuit settlements.

The biggest study of the phenomenon to date, a 2009 report commissioned by the U.S. Department of Labor, found many factors at work and little indication overall that discrimination is one of the most important.

The report specifically cautioned lawmakers and regulators against taking corrective action. “Indeed, there may be nothing to correct,” the authors wrote. “The differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers.”

The recently released AAUW report also suggests that discrimination plays at most a secondary role, with most of the gap explained by worker choices.

The authors reached this conclusion by adjusting the 23 percent gap for effects of occupation, hours worked, workplace flexibility, experience, education, and other factors.

After these adjustments, the gap shrank to 5 percent for college graduates a year after graduation and 12 percent 10 years after graduation.

Other factors

The remaining gap may or may not be partly or entirely due to discrimination. Researchers just don’t know enough about the effect of other factors.

For instance, some studies have found that female employers tend to pay women less than they pay men. One possible explanation for this is that women are prone to undervaluing their own work.

That may cause, among other things, female workers to negotiate less effectively for raises and promotions.

While a full explanation for the wage gap remains elusive, and gender discrimination has by no means been eliminated as a possible cause, it’s certainly true that women workers today are paid more by comparison to men than ever.

The gap was about 40 percent through the 1970s, dropped to 28 percent by 1990, was 27 percent in 2000, and has continued falling to reach its current level, according to researcher Francine Blau of Cornell University.

Still, 23 percent is a lot. Over a 40-year career it can come to $443,000 for an average worker, notes the National Women’s Law Center.

So you might want to do more than just wait for it to gradually get smaller. And there are specific actions you can take to shrink your own wage gap.

How to shrink the wage gap

Choosing an occupation is one. Some occupations pay less, and women tend to work in those occupations.

Worker experience is another. When workers move in and out of the workforce as, for instance, parents do when they stay home for a while to raise children, they have less experience.

Hours worked also matters. Employees who put in extra time are likely to be seen as more valuable. And flexibility is similarly important.

Workers willing to travel or work weekends may be considered more valuable to the organization.

Studies suggest that both male and female workers can increase their pay by carefully considering these factors. That is, they need to choose occupations wisely, develop relevant experience, put in longer hours, and be more flexible.

The bottom line

Finding that worker decisions are important in determining pay does not excuse, minimize, or deny the existence of gender-based discrimination.

But, while we continue to work as a society to reduce discrimination through legal and other means, there are many moves workers can make on their own to help make up any difference on their paychecks.