Women lose out on $900,000 in earnings in their lifetime due to pay gap
March 14 is Equal Pay Day, the symbolic date indicating how far into the year women would need to work to earn the same amount of pay male workers earned the prior year. This year, the day is underscored by the dour fact that the pay gap has barely budged in two decades.
Women earned 82 cents for every $1 earned by men last year, according to the Pew Research Center. That indicates women are only slightly ahead of where they were in 2002, when they earned 80 cents for every $1 earned by male workers, the research organization said.
The lack of traction comes despite gains in college enrollment where women now constitute the majority of students, and in so-called STEM fields, or science, technology, engineering and math. The long-term impact of the pay gap can translate into lost wages of $900,000 over the course of a woman's lifetime, according to a new study from Payscale. That hurts women's financial stability not only during their working years, but also in retirement.
One reason for the wage gap boils down to the types of jobs where women are more likely to be employed — teachers, office assistants or medical aides, for example — which tend to be lower-paying fields than male-dominated professions such as software developers and lawyers.
The pay gap is partly a reflection of "women not being encouraged to take the same jobs as men, maybe male-dominated jobs like construction or even in the financial industry," noted Hannah Wardenburg, associate wealth adviser at Hightower Wealth Advisors in St. Louis. "They are in the administrative side of work or in education, and we know they aren't compensated the same as in the male-dominated industries."
Wardenburg said that when she started out in a financial training program five years ago, she was in a class of 15 trainees — only two of them, including herself, were women.
"That was eye-opening to me," she said. "I didn't realize there was still such a gap and that women weren't being encouraged to come into these professions."
"Ceiling on their pay"
Some young women are turning to upskilling, training in emerging fields such as data science in order to boost their earnings potential, said Jennifer Schwab, the CEO of ENTITY Academy, which specializes in bootcamps for women who want to switch to fields such as cybersecurity or software development.
"They see in their professions, especially after a liberal arts degree, that there is a ceiling on their pay," Schwab told CBS MoneyWatch.
Although more women are earning STEM-related college degrees, most are picking health-related subjects rather than computer science or engineering, where graduates tend to earn higher pay, according to Pew research.
The "opportunity gap" describes the 18-cent gap between women's and men's earnings. But there's also a "controlled gap," which measures the difference in income between men and women with the same jobs and experience, Payscale noted.
"[T]ogether they highlight the wealth and power imbalance that continue to exist between men and women in our society," said Ruth Thomas, pay equity strategist at Payscale, in a statement.
Payscale found that some jobs have bigger controlled pay gaps than others, meaning that women in those occupations who have the same qualifications as their male counterparts earn less — and that can add up over time.
Here are the fields with the biggest controlled pay gaps, according to Payscale:
- Bartender: Women earn 80 cents for every $1, or $6,000 less in annual pay
- Waiters and waitresses: 82 cents, or $4,600
- Physicians and surgeons: 88 cents, or $35,000
- Directors of religious activity and education: 88 cents, or $6,800
- Drivers and sales workers: 89 cents, or $4,300
- Credit analysts: 90 cents, or $6,400
- Database administrators: 91 cents, or $8,000
- Chemical technicians: 91 cents, or $4,300
- Chemical equipment operators: 91 cents, or $4,000
- Inspectors, testers, sorters, samplers and weighers: 91 cents, or $4,600
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