Wage gap even worse than we had thought
I know you probably want good news for the holiday season, but women workers — and the guys who root for them — it’s high time to argue for an end-of-year bonus or salary increase, because you likely are coming up short.
According to a report from the Institute for Women’s Policy, the gender wage gap is even worse than previously thought. Unlike Census Bureau data that examines the current state of wage disparity in a given year, this report looked at a 15-year time period (from 2001 through 2015) to better gauge the gender wage gap that exists.
The extended time period captures something called “work force attachment,” which takes into account when people leave the workforce voluntarily or involuntarily. (The study followed the same people over the time period.) While men were also penalized for time out of the workforce, women’s earnings losses for time out were almost always greater than men’s.
With a longer lens, the gender wage gap balloons from the often-cited 20 percent to a jaw-dropping 51 percent. Did you catch that? Women made 49 cents for every dollar a man made.
One factor behind the gap is women tend to take more breaks in their careers to raise children or care for elderly family members. They are being penalized for taking care of their families.
Only 28 percent of women worked full time versus 59 percent of men over the 15 years covered and, as a result, they missed out on some prime earning years. This finding is consistent with a recent Goldman Sachs study, which found that a woman who takes just five years out of the workforce can forgo one-fifth of her potential lifetime income, even though she is only away from work for one-eighth of her career.
Even women who took off just one year from work got hit hard; their annual earnings were 39 percent lower than women who worked all 15 years.
Another issue is that when the burden of caregiving falls on a woman’s shoulders, she may take herself off the promotion track, which can hurt her career trajectory. Or she may reduce her hours or go part-time, which can rob her of valuable benefits and/or retirement savings. Or she may simply choose time or control of her schedule over money.
The Goldman research uses the term “downshifting” to describe this phenomenon — essentially, many women, either voluntarily or involuntarily, shift to work that requires less time, less travel or more flexible hours.
If you were waiting for the good news, you’ll have to wait a little longer: Even women who stayed in the workforce for the entire 15 years faced an enormous pay gap: They made 67 cents for every dollar a man made.
OK, that’s a lot of bad news, so here is something good: The research finds that there has been progress over the past 50 years. And I am encouraged by the next generation of entrepreneurs, who are more thoughtful about this issue.
They want to address the wage gap not only on a fairness basis, but also to attract and retain more women to their organizations. They are expanding benefits, including providing paid family leave time for employees to care for their kids and aging parents; enhancing flex time to allow more employees to work remotely; and some are lobbying the government to provide subsidies for child care.