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Two women kneeling and one women standing in between actively using tools to repair metallic sides.
Women workers install fixtures and assemblies to a tail fuselage section of a B-17 bomber at the Douglas Aircraft Company plant, Long Beach, Calif.  1942. (Alfred T. Palmer/Library of Congress)

Closing the Gap: Unraveling Pay Inequities

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This blog post was written by Lynn Weinstein, Business Reference and Research Specialist in the Science & Business Reading Room. 

This week we commemorate Equal Pay Day. The symbolic date, March 12, represents the extra number of days beyond a year that the average woman needs to work to earn the same amount a man earns in one year for equal work. Equal Pay Day is dedicated each year to raise awareness about how to solve gender and race pay gaps. Unraveling the causes and persistence of wage inequality is complex.  Some of the factors resulting in pay inequity today include occupational segmentation, the caregiving penalty, and negotiation bias. 

Occupational paths that women have historically taken have paid less in contrast to roles that are more frequently filled by men. For instance, women are more likely to be caregivers and occupy clerical positions. In addition, women are more likely to be nurses than doctors; and are more likely to be teachers rather than professors; with these roles traditionally paying less. This occupational segmentation, where certain fields of work are predominantly occupied by specific demographic groups, is one of the causes of the gender gap in wages, as these occupations are paid less If you are interested in exploring data on pay by demographic group in the United States, look at the U.S. Census and U.S. Labor Bureau’s monthly’s publication Current Population Survey (CPS). Here you can look tables and data on personal income. To dive deeper into wages, view the occupational employment and wage statistics, published by the Bureau of Labor Statistics. 

Women FBI employees in an office looking at folders in a filing cabinet and seated at a desk. 1976. (Thomas J. O’Halloran/Library of Congress)

According to Nobel Prize winning economist Claudia Goldin, another cause of the pay gap is the penalty our society imposes on those who take time off from work for caregiving, or who are perceived to place a priority on caregiving over work. Women are more likely to take time off from work to care for children or older adults in their lives. The wage and employment history gap created by caregiving is often not addressed well in U.S. by employers, resulting in lower wages and diminished career opportunities for women, who more frequently take on the caregiving roles for their families.  

Photograph shows an African American woman in an office sitting with her daughter on her lap.
Woman takes child to work because of no child care facilities. April 10, 1973. (Bettye Lane/Library of Congress)

Goldin cites another factor contributing to pay inequity: women are less likely to effectively negotiate their salaries and benefits packages, which results in women settling on lower salaries. This is also supported by research conducted by authors Linda Babcock and Sara Lashever in the book “Women Don’t Ask.” Since salaries are often negotiated based on prior earnings, ineffective salary negotiations or employment gap for caregiving can lead to a continuing impact on lifetime earnings. A lack of pay transparency in many workplaces disproportionately impacts women. 

Pat Bosch, Architect, designing at desk in her office. November 12, 2019. (Library of Congress)

These are just a few factors impacting pay inequity. There are other factors, such as gender biases, inequitable opportunities for advancement, as well as racial and ethnic disparities in training, education, and networking opportunities. Globalization and economic downturns can disrupt labor markets and result in greater pay inequity that may more profoundly affect some demographic groups more than others. 

There are ways that companies can work to promote equal opportunities and pay equity, including providing pay transparency, negotiation classes, and more advancement opportunities for traditionally under-resourced groups.  Increasingly, employers are seeing the importance of diversity as an element of Corporate Social Responsibility and a way that shareholders evaluate corporations based on Environmental, Social, and Governance (ESG) criteria. For example, some investors are eager to see that there are women represented on the board of a company and that diversity is part of the company’s strategy. Promoting equal opportunities, pay transparency, flexible work policies, and eliminating gender biases can lead to greater workplace diversity, increased employee morale, and a better corporate brand image. 

Discover more about the gender pay gap: 

  • Career & Family: Women’s Century Journey Toward Equity by Claudia Goldin (2021). The Nobel Prize winning economist examines college-educated women from the 1900s to today and their relationship to work and wages. The book includes an assessment of the initial detrimental impact of COVID-19 on women in the workplace, and the hope for balance that comes with increased flexible work and telework. It includes an in depth look at the caregiving penalty and negotiation bias. 
  • Women Don’t Ask: Negotiation and the Gender Divide by Linda Babcock and Sara Laschever (2021). The authors examine why women are less likely to negotiate for what they want, tell women how to ask for what they want in the workplace, and why they should negotiate for salaries, benefits, and positions. 
  • Machiavelli for Women : a Playbook for Getting Ahead at Work  by Stacey Vanek Smith (2021). National Public Radio host Vanek Smith advises readers on how to apply principles of the 16th Century philosopher Machiavelli to their work lives to gain power and shatter the glass ceiling. 
  • The Gender Wage Gap by Melissa Higgins (2017). This Common Core Standards-aligned book covers the history of women’s wages, the differences between men’s and women’s wages that still exist, and the efforts to close the gap. 
  • Job Options for Women in the 80’s by Ruth Robinson Hernandez. U.S. Department of Labor, Women’s Bureau. Washington, D.C. (1980). This vocational and employment guide for women in the 1980s was published by the U.S. government and digitized by HathiTrust. 
  • First Annual Report. Women in Industry Service. By U.S. Department of Labor. (1919). Washington, D.C.: Government Printing Office. This first annual report of the Women in Industry Service, which, a year later, became the U.S. Women’s Bureau, reported findings on labor issues of women who had replaced men in the workforce during WWI. Notably, on page 17, the report recommends equal pay for equal work. 
  • The Employments of Women: a Cyclopaedia of Woman’s Work by Virginia Penny (1863). This digitized copy is one of the earliest studies of women’s labor markets, and by a social reformer and economist. It includes an examination of what jobs were open to women in the 1860s and what wages they might earn, based on surveys and research that the author conducted. 

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