Equal Pay Day: 5 key points about the gender wage gap

The gender pay gap may be one of the most enduring -- and debated -- problems in the labor market. 

Equal Pay Day, marked on April 4 this year, was created as a way to highlight the wage disparities between the genders. It symbolizes the day when women catch up with what male workers earned in 2016, based on broad assessments that peg women’s pay at about 20 percent less than men’s. Women make about 79 cents for every $1 men earn, the smallest gap since 1960, according to the U.S. Census Bureau.

Examining the causes of the gender wage imbalance has gained traction among corporations and institutions, but there are plenty of headwinds for women who work outside the home. For one, progress on narrowing the gender pay gap has stalled after women made big gains in the 1980s. Second, many Americans don’t believe the pay gap exists, even though economists have thoroughly debunked that misconception. 

Seven out of 10 workers polled by employment site Glassdoor in 2016 said they believed men and women were paid equally at their firms. Men were far more likely to say that’s the case, with almost 8 out of 10 agreeing, compared with 6 out of 10 women.

If the gender wage gap exists, why do so many workers believe otherwise? Most companies aren’t transparent about what they pay their workers, and Americans generally don’t share their salaries with each other. In most cases, workers are hazarding a guess when they say men and women are paid the same, or they’re basing their belief on the salaries of a few friends or co-workers. 

A broad analysis of worker pay is essential to determining whether a company has a gender pay imbalance, according to Glassdoor. 

“The reality is if employers haven’t done the work to truly analyze their pay data, they will have a hard time knowing if a wage gap exists,” said Dawn Lyon, vice president of corporate affairs at Glassdoor, in a statement. “Our experience shows pay gaps don’t result from overt discrimination. They result from years of unintentional bias that can creep into an organization over time.”

Here are five key points concerning the gender pay gap: 

All things being equal, women are still paid less. Doubters sometimes argue women earn lower wages because many decide to take time off from work to raise children, cut back on hours or because they have less experience than men. Yet even when controlled for those factors and other issues (such as employers and job titles), women earn more than 5 percent less than men, according to a Glassdoor analysis.

Higher-paid women suffer bigger gender wage gaps. Women who work in highly paid fields such as finance and medicine feel the most economic pain from the pay gap, according to an analysis from the Economic Policy Institute, a left-leaning think tank. Women at the top end of the wage-distribution spectrum earn just 74 cents for every $1 men earn, they found.

Why is that? High-achieving women may be hit with the “motherhood penalty.” The EPI noted that women’s pay lags that of men with similar education and experience after they have children, even though men see no corresponding fatherhood penalty. Time-intensive workplaces such as law firms and investment banks may be more likely to ding women on that front. 

Men earn more even when they enter women-dominated fields. One argument is that the pay gap reflects professional choices: Women tend to gravitate toward lower-paid fields like education, the thinking goes, and therefore will earn lower wages. Well, yes and no. 

While occupational choice is an important issue, it’s not the whole story. When men enter a woman-dominated field like teaching or nursing, they actually earn more than women, the EPI noted. Male preschool and kindergarten teachers earn $16.33 per hour, compared with $14.42 per hour for their female counterparts, for instance. 

The gender pay gap is fueling the retirement crisis. Over the average working woman’s lifetime, she’ll lose out on more than $530,000 from earning less than her male counterparts. That jumps $800,000 for college-educated women. Given that women on average live longer than men, those lost wages are adding to the country’s retirement crisis. No surprise, older women are more likely to live in poverty than men over 65. 

Because of the wage gap, women must save $1.25 for every $1 a man saves for retirement to keep up their standard of living when they leave the workforce, according to NerdWallet

Women are underrepresented in the top-paying jobs. It’s not only that men earn more for doing the same work, but they’re more likely to dominate high-paying fields. Women on average make up less than 30 percent of the employees in the country’s top-paid jobs, according to a LinkedIn analysis. Only 7 percent of orthopedic surgeons and 5 percent of chief technology officers are women, for instance. Those occupations pay about $450,000 and $190,000 per year, respectively.