The U.S. Bureau of Labor Statistics (BLS) reported that in 2023 women who were full-time wage and salary workers had median usual weekly earnings that were 84% of male full-time wage and salary workers. This situation is up 22% from 1979, the first year for which comparable earnings data are available, when women’s earnings were 62% of men’s earnings.  Per the BLS, the majority of this closing of the pay gap was between 1980 and 2003. From 2004 to 2023, the women’s-to-men’s earnings ratio remained in the 80-84% range. 

The pay gap is not measured with men and women in similar titles, but on an overall basis.  In another study by the University of Chicago, the narrowing pay gap may be due to men’s inflation-adjusted earnings declining since the 1970s.   

According to the BLS report, up until age 24, women make 94% of what men their age do. By the time they’re 35, however, the gap widens to 83%. With each passing decade it keeps widening. By age 55, women are making just 77% of what men their age do.  Young women and men ages 16 to 24 had the lowest earnings ($691 and $736, respectively), where for males, median weekly earnings were $1,364 for ages 35 to 44; $1,396 for ages 45 to 54; and $1,380 for ages 55 to 64. For women, their median weekly earnings were highest for those ages 35 to 44 and 45 to 54, with earnings of $1,136 and $1,115, respectively. Women ages 55 to 64 had earnings that were slightly lower, at $1,065. 

A degree still matters.  Among all workers age 25 and older, the weekly earnings of those without a high school diploma ($708) were 44% of those with a bachelor’s degree and higher ($1,609) in 2023. For workers with a high school diploma who had not attended college, median earnings ($899) were 56% of the median earnings of workers with a bachelor’s degree and higher. Those with some college or an associate’s degree ($1,016) made 63% of what workers with a bachelor’s degree and higher made. 

With more women than men earning their degrees and entering the workforce, it could be expected that the pay gap should narrow even more.  The inflation-adjusted earnings of women without a high school diploma increased by 4%. By contrast, inflation-adjusted earnings for men without a high school diploma declined by 23% over the same period. For those with a bachelor’s degree or higher, since 1979, inflation-adjusted earnings for women have increased by 38%, while earnings for men have risen by 20%.  

But will the gap narrow?  It appears societal issues come into play.  There is what is called gender clustering with roles or occupational sorting: men and women tend to be clustered into different fields. For example, more men are truck drivers and engineers than women.  Women are widely in nursing, teaching, and customer service.  Truckers earn as much as $2,300 per week while nursing, for example, pays about $1,400 per week.  Although the value of nurses to engineers in society is not even close, engineers make more money generally than nurses. 

Another issue is maternity and caregiving.  It appears to be a prime issue for the pay gap. Women are most likely to stay at home to raise children, taking them off the career ladder, and when they come back, they are far behind men, who continue as the “primary” earner.   If a family member needs care, women are most likely to do so, and likely switch schedules to meet those needs.   

If HR is to make an impact with the pay gap, it should look at programs to keep women in the workforce without losing their place on the ladder.  HR can make a meaningful impact in various ways, from providing daycare support to offering mentorship and facilitating career advancement—even at the supervisory level and in part-time roles. HR should review the pay disparity within any job title, under a lawyer’s purview for confidentiality purposes.  Pay disparity in titles should be no more than 3% within an organization.  The bigger the disparity, the more likely potential discriminatory practices are raising their heads. 

ASE Connect 

Compensation Consulting – ASE offers compensation consulting in the areas of Compensation Strategy Development, Job Analysis and Evaluation, Market Pricing and Benchmarking, Incentive Plan Design, and Executive Compensation Consulting.  Learn more. 

Source:  Bloomberg 9/5/24, BLS 8/2024, VOX 2/19/18