The Pay Paradox

It’s 2024, and the difference between what men and women are paid is still sizable. According to data from the Pew Research Center, the gender pay gap has only closed by 4 cents since 2002. When factors such as education level and experience are controlled for, not all women experience pay parity. What’s making this gap so hard to close? And what can women do to fight back?

There are two types of gender pay gaps: uncontrolled and controlled. The uncontrolled gap represents the overall difference in pay, whereas the controlled gap factors in men and women working the same job with the same experience, qualifications, and education level. As of 2024, the uncontrolled gap sits at 84 cents made by women for every dollar made by men. The controlled gap sits at 99 cents. While it may seem like we’re far from achieving equal pay, the Center for American Progress estimates that pay equity could be a reality by 2056.

The persistence of the pay discrepancy boils down to two main reasons:

Social pressure on women to pursue specific career paths, such as education or caregiving, notably poorly compensated careers. Women are also less likely to pursue STEM degrees than men. Although women make up most of the undergraduate enrollment, they are proportionately half as likely to pursue STEM majors as men.

The gender pay gap is also perpetuated by the expectation for women to take time off from work to raise a family or care for loved ones. This gap widens significantly for women between the ages of 35 and 44, a period that often coincides with the start of family responsibilities.

Discriminatory practices also play a significant role in the gender pay gap. Despite the Equal Pay Act of 1963, which prohibits companies from having different compensations for the same role without an equitable reason, working women with families often face what is known as the "motherhood penalty," while working men with families enjoy the "fatherhood premium."

Despite these obstacles, women can advocate for better pay. Milena Humplik, co-founder of Broad Street Consulting Group, an executive recruiting firm in the finance and insurance industries, adds her advice on how to close the gender pay gap. With increasing pay transparency and accessibility to salary information, “women do know their value but tend not to take as much risk in moving companies for pay raises and promotions,” she said. She advises women to self-advocate for fair compensation and take risks when getting promotions, even if it means leaving their current company.

Legislatively, the Paycheck Fairness Act was introduced in March of last year. The bill aims to update the Equal Pay Act of 1963 by requiring employers to demonstrate that wage differences between men and women employees are due to factors other than sex. It would also protect employees who inquire about the company’s wage practices or discuss their wages from retaliation. Additionally, the bill would establish a program to provide training and negotiation skills for equitable compensation and working conditions and make wage discrimination information more accessible to the public.