Despite Progress, Gender Pay Gap Persists in U.S.

Three male job candidates and one female candidate sitting on chairs waiting to be interviewed

Although wage inequality has been getting more attention in recent years with various governmental, nonprofit, and business initiatives in place to raise awareness of the issue and support income parity for women in the workplace, the pay gap persists.

In honor of National Equal Pay Day, we’re taking a closer look at the state of the pay gap in the U.S.

Initiated in the mid-1990s by the National Committee on Pay Equity, Equal Pay Day aims to illustrate the gap between men and women’s wages. The day always falls on a Tuesday, to represent how far into the next week women must work in order to earn what men earned the week prior.

This year, Equal Pay Day falls on April 2.

How Big Is the Pay Gap?

As of September 2018, women in the United States earned 80 cents for every dollar paid to men. Despite the uptick in public awareness and the various initiatives in place to close the gap, it will currently take at least 70 years to close the pay gap in the U.S.

So how do these numbers play out globally? According to the World Economic Forum’s forecasts, women may be earning the same as men in 217 years.

Unconscious Bias Against Women in the Workforce

Some people think that the pay gap between men and women can be explained by lifestyle preferences and career goals — saying, for instance, that some women opt to drop out of the workforce in order to raise families. But this doesn’t explain — or justify — the gap.

In workplaces of all kinds, unconscious bias, the learned tendency to attribute certain traits to a particular group of people, often comes into play. For example, the idea that women better serve as nurturers and caretakers, whereas men provide better monetarily, has persisted throughout history, despite the many strides being made. Even individuals who claim to support women’s equality and income parity may be making major work decisions — such as those involving promotions or the distribution of raises — based on unconscious biases. (You can explore your own unconscious bias tendencies using this Harvard test.)

Biases against women have a major impact on wages, and studies have even shown that people are willing to pay men more for identical items, represented in identical ways, just by virtue of gender alone. This was the case in a study done on eBay involving male and female sellers of $100 gift cards, in which men earned an extra 6.9%.

And it’s not just only money; it’s also about representation. The manufacturing sector, for instance, employees substantially fewer women than men. In the U.S., 47% of the workforce is comprised of women, but only 29% of employees in the manufacturing sector are female. On a positive note, however, a survey from Deloitte shows that 58% of women in manufacturing have seen positive changes in the industry’s attitude toward women in the last five years.

This signifies that moves are being made in the right direction, but manufacturers should still be focusing on creating a more equal and inclusive environment. And it’s not just “the right thing to do” — it’s also good for business. One recent study even found that companies with women holding at least 30% of leadership roles are more likely to see continued, profitable growth.

How to Close the Pay Gap

Gender equality is a hot topic among companies and consumers alike. Nike, for instance, has recently taken action to promote gender equality in the workplace, offering more leadership roles to women and closing the pay gap within the company to 99.9%. With consumers increasingly willing to pay more for brands that align with their values, these types of moves are smart on many levels.

For companies looking to implement change, start by taking a look at the numbers. Even companies with the best of intentions can let cognitive biases drive their decisions. Hiring a staffing agency or some form of external auditor to look at the number of women to men employed, as well as the wages paid (including bonuses), can give businesses valuable insight into areas for improvement.

From there, companies can build a policy that ensures equality of pay between men and women. It is not enough to verbally declare your commitment to change — a written and enforced policy is a wiser option. This will provide peace of mind to current workers, increasing employee retention, while boosting your business reputation overall.

Cognitive bias training is a high priority for manufacturers aiming to make real change. This type of training helps employees understand their own biases and offers them solutions for reframing their thinking. Only 30% of employees receive training of this kind, despite the fact that nearly half believe employers could do more to promote gender equality. Online training and lunch-and-learn sessions are two affordable ways to integrate cognitive bias training on a budget.

Working Toward Income Equality

As more companies begin to realize the benefits of a gender-balanced workplace, change is underway, but much work remains to be done. For any business seeking to remain competitive and relevant in today’s ever-shifting, increasingly diverse industrial landscape, closing the pay gap should be a top priority.

Image Credit: fizkes / Shutterstock.com

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