Eliminating the Gender Pay Gap

Reasons for the Gender Pay Gap

Why is the pay gap so persistent? Experts cite the following reasons:

• the increased participation rate of women in the workforce
• job segregation
• lower experience levels of women
• women's own attitudes

Increased participation

The first and most dramatic factor affecting women's wages is the share of women in the labor force. The number of women in the labor force has grown dramatically over the past few decades. Currently, women account for about 47.3 percent of the total labor force. This is a major increase from 1950, when women represented just 29.6 percent of the workforce.

From 1900 to 2025, the labor force participation rate for women grew from 18% to 57% of all working-age women.

The reasons for this increase in participation are many and involve drastic changes in American society.

• Lower birth rates and improved technology in the home have made it easier for women to work outside the home.
• Increased education has made it more desirable forwomen to work.
• The need for two paychecks in many families and the increase in the number of one-parent families (usually headed by a woman) have made it necessary for women to work.
• Increased female political representation.

The single adult family accounts for a rising proportion of America's families, particularly low-income families. This trend has been called the feminization of poverty.

Job segregation

The increase in the women's participation rate in the workforce might not by itself have reduced women's wage rates. If there were a single labor market, then an increase in the participation rate would simply mean an overall increase in the supply of labor and somewhat lower wage rates for all workers. But there are many labor markets, and women tend to be segregated into many that are low paying. Positions deemed "women's work" that are occupied by 70% or more of women include:

• Skincare specialists
• Secretaries and Administrative Assistants
• Preschool and Kindergarten Teachers
• Dental assistants

These positions earn less than those that are integrated or occupied predominately by men. However, women are making a strong push into some positions that pay well and were formerly male dominated:

• Veterinarians
• Natural Sciences Managers
• Pharmacists
• Postsecondary teachers

For those occupational areas in which women predominate, there is one further problem: there is very little vertical movement within the occupation, and the range of salaries is therefore narrower.

Even when advancement is possible, women often hit a glass ceiling, a term that has been defined by David Cotter and colleagues as having four distinctive characteristics that must be met to conclude that a glass ceiling exists:

1. A gender or racial difference that is not explained by other job-relevant characteristics of the employee.
2. A gender or racial difference that is greater at higher levels of an outcome than at lower levels of an outcome.
3. A gender or racial inequality in the chances of advancement into higher levels, not merely the proportions of each gender or race currently at those higher levels.
4. A gender or racial inequality that increases over the course of a career.

Experience

Women’s experience levels also play a role in creating the pay gap. Because of their tendency to drop out of the labor market for childbearing, women commonly have less experience than men the same age. In occupations where skill requirements change rapidly, this is a major disadvantage. Employers historically were less likely to engage in training personnel whom they perceive as not being permanent employees; so even if women have the same level of experience, they may have received less training.

Perspective

Finally, women may have been hurting themselves with their own attitudes regarding wages.

There has been a tendency for women to undervalue their contributions and overstate their rewards. In the past, they were likely to reevaluate their contributions downward to agree with the cultural norms that said women's contributions to organizations were not as great as those made by men. In addition, they tended to increase their non-pay rewards by emphasizing the good working conditions of the office (vis-à-vis the factory floor) and the social aspects of the job.

The total rewards an organization offers include both financial and non-financial, elements that may be used to attract, motivate and retain employees. Total rewards include everything the employee perceives to be of value resulting from the employment relationship.

Motivating elements include:

• Compensation
• Benefits
• Work-Life Balance
• Performance and Recognition
• Development and Career Opportunities