Today, the national survey group PayScale.com just released a massive new report on the Gender Wage Gap. The Wage Gap is the difference between what men and women are paid on average. The report surveyed upwards of 1.8 million people to gather the best and broadest cross-section of workers.
The results showed many similarities to data gathered from other researchers. Overall they found that the wage gap shrank slightly to 23.7% in 2016 from 25.6% in 2015.
To be clear this is just the raw data. PayScale.com took the average of all the male workers and compared them to the average of female workers and found that women made on average 23.7% less than men.
The data analysts at Payscale did not stop there. They dug much deeper into their own data to find some very interesting results. They started by controlling for factors like education and years of experience to find out if women are actually paid equally for equal work.
“Using our proprietary compensation algorithm, we are able to estimate a controlled median pay for females by adjusting for outside compensable factors across gender (years of experience, education, company size, management responsibilities, skills, and more), and calculate the difference in pay between similar men and women working the same jobs,” said Katie Bardaro, Lead Economist and VP of Data Analytics, PayScale.
When they controlled for these specific items they found that the wage gap shrank dramatically to 2.4% nationally. This means that even women working in the same job, with the same level of education, the same level of experience are still being paid 2.4% less than men in the same jobs.
PayScales data shows that some states are better than others when it comes to equal pay for equal work. For example, Connecticut has a controlled wage gap of just 0.4% while Louisiana has a controlled wage gap of 7.0%. Again, this means a woman in Louisiana is paid 7% less than a man in the same job with the same level of experience and education.
At first I was confused by these results. The data clearly shows that there definitely is a wage gap but not nearly as much when compared job-to-job.
So why is there a 23% wage gap overall and a controlled wage gap of 2.4%? PayScale’s data also revealed some intriguing answers to that question.
PayScale found that 18% of women overall reported being passed up for a promotion or a pay raise because of their gender compared to only 3% of men.
The problem is even worse for women with higher levels of education. The data shows that 35% of women with an MBA said they have been passed up for a raise or promotion because of their gender.
PayScale also broke down the percentage of women who have been passed up for raises and promotion by state. Utah topped the list with nearly 30% of female respondents saying they have been passed up for a raise or promotion.
PayScale also found that women are less likely to get higher-level, higher-paying jobs.
“As workers age, men become significantly more likely to enter into management roles, with men being 25 percent more likely than women to be in management roles mid-career (age 35-40) and over 41 percent more likely late career (age 60-65),” said Bardaro. “The differences become starker as we move from mid- to upper-management.”
“Though the percentages are roughly the same for Managers/Supervisors and Directors, men are 85 percent more likely than women to be VPs or C-Suite Execs mid-career, and 171 percent more likely late in the career,” Bardaro added.
Though it appears we as a nation have made great progress in closing the wage gap between men and women in equal job levels there are still serious systemic problems that create a much larger wage gap for women. Because women are still being passed over for raises and executive level promotions the overall wage gap will continue to plague working women for years to come. To truly address the wage gap we need to also address the systemic gender discrimination that prohibits women from rising up the economic ladder.
One more bit of data I think should be mentioned. When controlled for education and job type one industry has virtually eliminated the wage gap. Nationally the Wage Gap is 2.4% but among those in “Education Services” the gap is .6%.
Could it be because they workforce is predominantly female? Could it be because they have strong union contracts that ensure pay equity for years of experience and education levels? Could it be because more and more women are taking higher administration jobs?
The answer to all of the above questions is YES. Strong unions, a diversified workforce and upward mobility lead to the elimination of the wage gap.