American women, on average, earn 77 cents for every dollar that men make, as cited by President Obama. That’s the prevailing ratio when discussing the national wage gap and the still-solid glass ceiling. Our gut reaction is to scream “gender inequity!” but taking a closer look at how the demands of family life (e.g., children) incur different demands on men and women, we get a more accurate picture of why this ratio endures. In fields where women make up half (or more) of the talent pool, this gap is narrow to non-existent. Today, there’s an opportunity for women to join the growing business and STEM workforce. This could also be an opportunity to narrow the wage gap.
25 years of gains and hang-ups
In the 1980s, the national wage gap narrowed from 60.2 cents for every $1 in 1980 to 71.6 cents in 1990. By comparison, this ratio has barely budged in the last decade. Before diving into the possible causes of stagnation, however, we should consider how these numbers are obtained.
When we say, “women earn 77 cents for every dollar men make,” it doesn’t mean that a man and woman standing side-by-side, doing the same work will earn, respectively, one dollar and 77 cents for their efforts. Rather, it means that the median earnings of full-time female workers is 77 percent of the median earnings of full-time male workers. It doesn't speak to any other factors that determine pay, such as the type of job, education, experience, or hours worked.
Workplace inefficiencies = gender inequity
| Although male and female MBAs have nearly identical incomes at the outset of their careers, their earnings soon diverge, with men earning more (annually) as soon as 10 years after MBA completion. |
In this paper, labor economists analyze and compare the career outcomes of MBAs who graduated between 1990 and 2006 from top US business schools. They found that although male and female MBAs have nearly identical incomes at the outset of their careers, their earnings soon diverge, with men earning more (annually) as soon as 10 years after MBA completion.
This divergence is largely because of differences in career interruptions and weekly hours worked. In general, women were found to have more career interruptions and work shorter hours (including more part-time and self-employed work)—the main reason being children. Although these interruptions may not seem significant at the time, for women with children, it adds up to about an eight-month deficit in actual post-MBA experience compared with men. Similarly, women with children typically work 24 percent fewer weekly hours than the average male.
According to these findings, it’s the workplace that’s discriminating against women—but could it change?
Power in numbers
| "A tipping point may have been reached in fields where women have become a majority (or nearly the majority) of the young talent..." |
According to the study, “a tipping point may have been reached in fields where women have become a majority (or nearly the majority) of the young talent (such as medicine, veterinary medicine, optometry, pharmacy, and accounting).” In other words, career interruptions and the amount of hours worked had less of an impact in fields where there is a “larger share (or critical mass) of women in the talent pool.”
Although this is not yet the case for MBAs and the business and financial sectors there’s a growing opportunity in these professions as well as in science, technology, engineering, and mathematics (STEM) careers. It’s estimated that by 2020 that there will be 1.4 million programming jobs available in the United States. Right now, four of the 20 top-paying jobs for women are in computing, a field in which only about 25 percent of workers are female. Soon there will be a shortage, a need, and (above all) an opportunity for women to break into these fields in large numbers.
When it comes to the gender wage gap, numbers do make a difference. Having more women in top-paying, business and STEM careers can help transform the workplace and equalize those measures that determine pay grade. The next question is: how do we turn this opportunity into action?