Home

»

Payroll Software for Small Business

What is the Gender Pay Gap?

What is the Gender Pay Gap?

|

Fact Checked

|

Cite This Webpage

When it comes to pay equality, women have gotten the short end of the stick for decades. Despite making great strides towards gender equality in recent years, women still receive lower wages for their work, even when they are just as qualified as men. Despite what some think, occupational segregation happens to many individuals.

In 2024, while the pay gap is smaller than before, it still exists. We went to the experts on the gender wage gap to gather the most recent statistics. We explore different demographics and industries to present a broad overview of what the gender wage gap is for most women in the current labor market.

On this page:

Key Takeaways:

  • Women working full-time, year-round, make 83% of what men earn.
  • The gender wage gap has increased since 2019, when it was only 20.3%; now it’s around 22.2%.
  • Worldwide, women only make 77 cents for every dollar earned by men.
  • Pay equity for women who work full-time, year-round, will take until 2058.
  • Women of color, on average, make anywhere from 10%-45% less than non-Hispanic white men.
Women working full-time make 83% of what men earn.

Controlled vs Uncontrolled Data

We can use two types of data to examine the gender wage gap: controlled data and uncontrolled data. Understanding the difference between these two is important because it allows us to fully understand how the wage gap affects working women today.

Controlled Data

Controlled pay gap statistics show how much women earn compared to men when all factors that can influence pay are accounted for. These factors include education, experience, job title, industry, job level, and hours worked.

For example, in controlled data, a woman’s salary is compared to a man’s salary when both have a bachelor’s in science, work as data scientists, are juniors in their field, work at the same company, have worked the same hours, etc. Once all of these factors are accounted for, we look for a wage gap.

Uncontrolled data

Uncontrolled data takes a holistic approach to the gender pay gap. Instead of comparing the salaries of those with the same job, uncontrolled data shows how much all women are paid compared to all men. This type of data gives a better insight into the scope of the wage gap, demonstrating how large it can grow.


Gender Wage Gap Statistics

In the United States, women make less in a year than men on average. While the gender wage gap has decreased since women first entered the corporate workforce, it persists, denying women the same compensation as their male counterparts.

In 2023, the amount women make ranges anywhere between 82% and 84% (uncontrolled data):

  • Pew Research found that women earn 82% of what men earn.
  • Payscale found women make 83% of men’s earnings.
  • The US Department of Labor found women earn 83.7% of what men earn.
  • AAUW found that women earn 84% of men’s earnings – (average for all women of all races working full-time and part-time).

When we take the average of each organization’s findings, we see that women make an average of 83% of what men earn. That’s $0.83 for every 1 dollar a man is paid. However, this is just for the United States.

  • Worldwide, women only make an average of 77 cents for every dollar a man earns.
  • The gap has increased since 2019, when it was only 20.3%; it grew to around 22.2% after the pandemic.
  • Additionally, when we look at the regression-adjusted wage gap (something that has been stagnant for more than 20 years), it has widened from 22.6% to 22.9%.

Educational attainment doesn’t seem to help reduce this gap either. The Chamber of Commerce found that the more education a woman has, the bigger the pay gap between her and a man with the same education level.

  • Women with bachelor’s degrees who work full time make 70% of what men with bachelor’s degrees earn.
  • On average, men with bachelor’s degrees earn $73,592, while women with bachelor’s degrees earn $51,266.
  • The nationwide gender pay gap for women 25 and older with a bachelor’s degree is $22,326. (This is twice as high as the total gender pay gap in the US, which is $11,165.)

These are averages for all women in the United States, but the gender gap is worse for women of color, middle-aged women, or those with less access to support and opportunities.

Experts predict that pay equity between all women and all men who make money will take until 2053. However, women who work full-time, year-round, will reach pay equity in 2058.


Gender Pay Gap Demographics

The gender pay gap changes for those in different demographics. Factors like age, education, and race all affect the gender wage gap

Age and the Pay Gap

Younger women between the ages of 25 and 34 have a reduced pay gap compared to the national average. They earn an average of 92 cents for every dollar a man in the same age group earns. However, as women get older, the gap grows.

  • Women ages 35 to 44 earned 83% as much as men the same age.
  • Women 45 to 54 earned 83% as much.
  • Women 55 to 64 earned 79% as much.

According to Pew Research, these trends have not changed in the last four decades.

Education and the Pay Gap

As mentioned before, the wage gap grows for women with higher levels of education

  • For workers with only a high school diploma, women earn 78.6% of what men earn.
  • For workers with a college degree, women make 70.2% as much.
  • For workers with advanced degrees, women earn 69.8% as much.

Some studies have found that, on average, women with advanced degrees earn less per hour than men with basic college degrees. Again, these data points are the average, so some women make more, and others make less.

Despite the fact that women are more likely to complete associate’s, bachelor’s, or master’s degrees, education is not enough to eliminate the gender pay gap. In fact, according to the US Department of Labor, women typically must complete an additional degree to receive the same yearly pay as a less-educated man.

This extreme gap is partly because, despite a growing presence in professional and STEM fields, women are over-represented in lower-paying industries.

Race and the Pay Gap

Race and ethnicity also affect the pay gap. The AAUW found the average of how much women of different races earn compared to non-Hispanic white men.

Gender pay gap statistics for full-time workers:

  • Asian American women earn 99 cents.
  • White women earn an average of 72 cents.
  • Black women earn 69 cents.
  • Native Hawaiian and Pacific Islander (NHPI) women who earn 65 cents
  • Latina women who earn 57 cents.
  • Native women who earn 59 cents.

Gender pay gap statistics for part-time or seasonal workers:

  • Asian American women earn 89 cents.
  • White women earn an average of 72 cents.
  • Black women earn 66 cents.
  • NHPI women earn 61 cents.
  • Latina women earn 52 cents.
  • Native women earn 55 cents.

It’s important to note that the statistics above are an average of what all women of each race earn. The data is not controlled for occupations, skills, job titles, etc. However, even when we look at controlled data, the gap does not disappear. It is important to be aware of the gaps so we can begin closing them.


Pay Gaps in Jobs and Industries in 2023

According to a study by Payscale, the pay gap varies greatly between different types of jobs and industries. The study looked at both controlled and uncontrolled data to compile an exhaustive list of statistics. We reviewed and gathered the data to find the jobs and industries with the most significant pay gaps.

Top five jobs with the biggest pay gap (controlled):

  1. Bartenders – 80% of a man’s earnings.
  2. Waiters and waitresses – 82% of a man’s earnings.
  3. Physicians and surgeons, all other – 88% of a man’s earnings.
  4. Directors, religious activities, and education – 88% of a man’s earnings.
  5. Driver/sales workers – 89% of a man’s earnings.

Top five industries with the largest pay gap (uncontrolled):

  1. Legal – 61% of a man’s earnings.
  2. Education, Training, Library – 77% of a man’s earnings.
  3. Management – 80% of a man’s earnings.
  4. Building & Grounds Cleaning & Maintenance – 81% of a man’s earnings.
  5. Farming, Fishing, Forestry – 81% of a man’s earnings.

Top five industries with the largest pay gap (controlled):

  1. Farming, Fishing, Forestry – 90% of a man’s earnings.
  2. Construction and extraction – 92% of a man’s earnings.
  3. Installation, Maintenance, & Repair – 94% of a man’s earnings.
  4. Food Preparation & Serving Related – 96% of a man’s earnings.
  5. Sales & Related; Production; and Protective Services tied at 97% of a man’s earnings.

Industries with the smallest pay gap (uncontrolled):

  1. Healthcare Support – 98%
  2. Life, Physical, Social Science – 96%
  3. Healthcare Practitioners & Technical – 96%
  4. Art, Design, Entertainment, Sports, & Media – 95%
  5. Architecture & Engineering – 94%

Industries with the smallest pay gap (controlled):

  1. Healthcare Support – 99%
  2. Life, Physical, Social Science – 99%
  3. Art, Design, Entertainment, Sports, & Media – 99%
  4. Architecture & Engineering – 99%
  5. Healthcare Practitioners & Technical – 98%

We can see that even when we control the data (taking into account the skills, experience, job titles, and more), women make less than men on average. However, there are a few industries where women with comparable skills make the same or more than men.

Industries where women make equal to or more than men (controlled):

  1. Transportation & Material moving – 100%
  2. Building & Grounds Cleaning & Maintenance – 100%
  3. Legal – 101%
  4. Education, Training, Library – 103%

Additionally, the Institute for Women’s Policy Research found that there was no gender pay gap as a teaching assistant. The median weekly earnings for both men and women working full-time was $662.

Pay equity exists in some industries, which is a step in the right direction. However, all people deserve equal pay when they work the same job and put in the same effort as others. Pay equity should be the normal experience for all women, not the pleasant exception.

If you’re looking for a job in one of these industries and are concerned about the pay gap, Elizabeth Koraca, a career coach and strategist, explains that you can, “Research what other people in your industry, doing the same or similar job, are making. Ask friends or colleagues what they’re making.” This research will give you an idea of what the average person makes and provide you with a baseline of what you should also make.

Koraca also says, “When you’re navigating the pay conversation with your employer, you want to be prepared and be armed with facts and statistics to back up your request.” Reliable facts and statistics will help strengthen your position for equal pay.

“When navigating the pay conversation with your employer, be prepared and be armed with facts and statistics to back up your request,”

Elizabeth Koraca, Career Coach & Strategist

Luckily, the pay gap is not as wide as it once was, and women are seeing increased efforts to ensure equal pay becomes a reality.


How the Gender Pay Gap Has Changed

The Equal Pay Act of 1963 made it illegal to discriminate based on gender when deciding pay. Before that, women working full-time, year-round, made about 59 cents for a man’s dollar. And for all women, regardless of how long they worked or when, the average was about 37 cents for every dollar earned by men.

In 1982, the pay gap for women 16 and older was 65% of a man’s earnings. In 2002, the gap shrank, and women 16 and older made 80% of what men made. And in 2023, women earn an average of 83% of what men make.

For women between the ages of 25 and 34, that pay difference has always been a little smaller, but not by much.

  • In 1984, it was 74%
  • 2002, it was 86%
  • 2023, it’s about 92%

The pay gap has shrunk since 1963, but it has remained stagnant for the past two decades.


Pay Gap in Different States

The pay gap does change in different parts of the United States. According to the US Census Bureau, these are the top five states with the highest average yearly wage gap.

  1. Wyoming – $21,676
  2. Utah – $17,303
  3. Louisiana – $14,926
  4. Washington – $14,609
  5. North Dakota – $13,950

The District of Columbia gets a “dishonorable” mention with a $16,032 yearly wage gap. The gap drops to $14,700 on the price parity map.

When we consider the cost of living and the dollar’s spending power in different states, the wage gap shifts, and the top five states change just slightly.

Price parity wage gaps:

  1. Wyoming – $23,202
  2. Utah – $17,764
  3. Louisiana – $16,256
  4. North Dakota – $15,127
  5. Oklahoma – $14,706

Why is There a Gender Wage Gap?

Many wonder why such a clear gender pay gap exists. Measurable factors like education, occupation differences, and work experience have offered some explanation. As women have increased their education levels, joined industries mainly populated by men, and built life-long careers, we have seen the gender-based gap shrink but not disappear. As such, other factors must also influence the gender pay gap.

One study asked both men and women what they thought influenced the gender pay gap.

  • 61% of women say a major reason is that employers treat women differently. Only 37% of men say this is a major reason.
  • 45% of women say how women choose to balance their work-life and family is a major factor, while 40% of men hold this view.

Another possible reason the gender pay gap exists is that women worldwide do more unpaid caregiving than men, limiting their time in paid jobs. Similarly, women tend to be overrepresented in low-paying jobs as these give them the flexibility they need to take care of their other responsibilities.

Women are more likely to have part-time jobs than men, which widens the wage gap when we look at weekly earnings.

  • In 2022, the weekly earnings for women were 77.4% of a man’s weekly earnings.

Another factor that influences the gender pay gap is motherhood. While having children is not a bad thing, in the conversation of pay gaps, there is something called the “Motherhood penalty.” 

Childcare takes a lot of time and energy. Women are often out of work for 6-12 weeks, sometimes longer, after giving birth. As a result, any money they would have made during that time is essentially lost. Even if their jobs offer paid maternity leave, the amount likely will not equal what she would have made otherwise. This “motherhood penalty” is one reason some women earn less in a year than men.

In fact, a study conducted by Lundborg, Plug, and Rasmussen (2017) found evidence of this in Denmark by surveying women who sought medical help to get pregnant. They tracked women’s fertility and employment through detailed surveys. They found that women who had successful in vitro fertilization treatment had lower earnings down the line than those who were unsuccessful.

Another explanation for the pay gap is discrimination. Evidence from different contexts suggests that discrimination is an important factor, though it’s not something we can directly measure. However, 67% of women do feel that their employers treat them differently. Similarly, social norms on distributing labor between genders can affect wage inequality.

No matter what the cause, women deserve equal pay. Elizabeth Koraca tells women they need to “Make sure your employer knows the value you bring to the table. When you walk in and have that conversation about pay, believe in yourself and your abilities and project confidence.”

She explains that it’s important to be prepared for these conversations with your employer. “Practice what you’re going to say and have talking points prepared in advance.” Ultimately, women must believe in their strengths and remain confident.

“When you walk into the pay conversation, believe in yourself and your abilities—project confidence,”

Elizabeth Koraca, Career Coach & Strategist

The Bottom Line

Women’s work is often undervalued by some employers, though there is no logical reasoning behind such views. However, a woman’s median earnings and annual earnings reflect this truth.

In America and throughout the rest of the world, women are paid less on average than men. Currently, women only make 83% of what men make, and it’s even lower (77%) when we look at the whole world. Even when data is controlled, when we look at women with the same skills and qualifications as men, the pay gap persists in most industries.

This pay inequality is worse for women of color or different ethnicities when compared to non-Hispanic white men. Black women working full-time earn an average of 69%, and Latina/Hispanic women make an average of 57% of what men earn. One possible explanation for this disparity is the type of jobs these women commonly have, which are generally low-paying; however, we must not discount internal bias and discrimination as possible factors.

The gender pay gap varies by job and industry. The majority of industries have an evident wage gap, but a few offer equal pay according to controlled data. If women are to reach pay equity before the projected year of 2053, fair wages must be the standard for all people. You can easily monitor pay differences with payroll software to ensure there are no unintentional pay gaps.

About NAWBO Expert Reviews

NAWBO Expert Reviews is a free resource with reviews of software and services to help your business succeed. Our team of experts share their insights and guidance to help highlight solutions that meet your unique business needs.

Fair Use Statement

If you find this article helpful, feel free to share it for noncommercial purposes only. When doing so, we ask that you link back to this page so readers can see our full research and findings.


About the Author

gabrielle carpenter headshot

Gabrielle focuses on market research and industry trends for the NAWBO Expert Reviews Team. Through her work, she empowers small business owners with the information they need to make smart purchasing decisions.

How to Cite this Article

NAWBO Expert Reviews. “What is the Gender Pay Gap?” NAWBO.org. Feb. 9th, 2024, https://nawbo.org/expert-reviews/what-is-the-gender-pay-gap/.

Skip to content