How the Gender Pay Gap Works

The gender pay gap figure is typically calculated by first adding together all of the annual salaries of women who are working full-time, year-round, then finding the median salary — that is, the salary that's in the exact middle, with 50 percent of the women earning more than that figure and 50 percent earning less. Then the same calculation is made for men working full-time, year-round. Once those two figures are determined, you can compare them and calculate the pay gap [source: Glynn].

As an example, let's look at income data for 2020. According to the U.S. Census Bureau, in 2020 the median salary for men working full-time, year-round was $61,417, while the similar figure for women was $50,982. This translates to a wage gap of roughly 17 cents per dollar. Or, to put it another way, women earned 83 percent of what men were taking home that year. Some attribute the narrowing pay gap not so much to women's salaries increasing but more to men's salaries decreasing [source: Gillman].

While this is the most commonly used method to compute the gender wage gap, it's not the only one. Sometimes weekly salaries are used for comparison purposes, which nets slightly different results [sources: Semega, et al., Glynn]. For instance, the Bureau of Labor Statistics calculates using median weekly earnings and has the pay gap ranging from 78 percent to 81 percent, depending on the age group of the men and women being compared.

Keep in mind that you can't look at one statistic and make sweeping characterizations about pay inequities. Here's a quick example why. In 2020, U.S. Census Bureau data showed females heading a household solo earned a median income of $49,214, while men heading a household sans spouse netted $67,304. That's a gender wage gap of 36 cents per dollar, potentially telling a different story about the reason behind pay inequities.

Not everyone agrees that there is a true gender pay gap. For starters, the calculations compare the salaries of all working women to all working men, yet these women and men don't all hold the same jobs. That is, the figure isn't comparing male doctors with female doctors or male electricians with female electricians. And even if it were, most employees have different educational and employment backgrounds, two factors that greatly impact salary [source: Glynn].

Another point to keep in mind is that both women and men tend to cluster around certain occupations. About 45 percent of all working women are employed in just 20 fields, including secretaries and teachers; among men, one-third work in the top 20 male occupations, which include truck drivers, managers and supervisors. Overall, the cluster of occupations women favor tend to pay less than those favored by men. Some experts say such job-clustering accounts for about half of the gender pay gap [source: Glynn].

Childcare is another reason men and women don't always earn the same amount of money when working at the same occupation. If a woman takes time off after giving birth, for example, she will have less tenure than her male counterparts when she returns to the workforce and may lose out on wage increases. Some experts add that more women than men seek jobs that are close to home and that offer flexibility and personal fulfillment, which creates competition for these types of jobs and thus holds down wages. Men are also more likely to take on jobs that are dangerous or physically demanding, but offer greater pay, like truck driving or construction work.

Critics also point out that when you compare the wages of men and women with similar credentials who are working in similar fields, there isn't much of a wage gap at all (although the men will almost always out-earn the women). A 2021 PayScale report put the difference at 2 percent when controlling for men and women working the same jobs with the same qualifications. However, there were some fields where the pay gap was virtually non-existent, (like legal professionals and health care support workers) and others like farming and fishing where the gap was as big as 92 percent [source: PayScale].

Nevertheless, some say that after controlling for similar education, occupation and work experience and race, there is still a 38 percent wage gap that cannot be explained by measurable factors [source: Holmes and Corley]. Of the 111 occupations tracked in one study in 2019, there were a scant five where women earned more than men. These included counselors and fast food workers.

One of the reasons the gender pay gap continues to exist is that many women have no idea they're receiving discriminatory pay. If you're a woman and don't know that you're being paid less than the guy one cubicle over who has the same experience as you and is performing the same job, then how can you ask for fair treatment? Experts say the way to combat this is to start discussing salaries with your coworkers, family and friends. Unfortunately, many Americans, especially mid-level employees at private corporations, where salaries aren't public information, shy away from talking about their wages [sources: Narrow the Gapp, Wolgemuth].

In some countries, people are much more open about their salaries. But in the U.S., too often income is linked with success and self-worth. Thus, people with low incomes are embarrassed to disclose that fact, while many rich folks decline to say anything out of guilt or fear of resentment.

In May 2015, Lauren Voswinkel created the hashtag #talkpay and encouraged people to tweet their job titles, experience levels and salaries to help combat wage discrimination. Shortly after that, the Twitter handle @talkpay_anon debuted, which lets people post to #talkpay anonymously. A quick read of the #talkpay tweets reveals a wide variety of income information, plus ideas on ways in which women can boost their bottom line, such as negotiating pay increases. (Some critics of the gender wage gap theory say part of the reason for it is that men are better salary negotiators) [source: Fleming]. Websites have also popped up that let you compare your salary with that of others, such as Comparably and PayScale.

A 2020 survey by Glassdoor showed 70 percent of working adults across seven countries believe that men and women should be paid equally for equal work. California has a law requiring businesses to pay people the same wage for doing "substantially similar work" regardless of job titles [source: Isidore]. California also passed a law in 2018 that prohibits employers from asking prospective employees about past or current salaries. This was already enacted in some other states as well [source: HR Dive].

In 2014, then-President Barack Obama also signed an executive order barring federal contractors from punishing employees who compared their salaries, plus a presidential memorandum requiring those same contractors to submit employee compensation data (e.g., pay, sex, race) so the government can see if there's any wage discrimination going on [sources: Kahn, The White House, Domonoske].

Hopefully, all of these actions will pay off. Because if the gender pay gap continues closing at the same glacial rate, it will be around 2058 before parity is finally reached [source: Narrow the Gapp].