Women across the country on Tuesday are wearing red to show how far “in the red” they are compared with their male counterparts.
April 10 is being dubbed “Equal Pay Day” because it symbolizes how far into 2018 women need to work to catch up to what men earned in 2017.
And there are still plenty of questions about why women earn less than men, despite gains in education and skills.
The facts are incontrovertible: Women earned 80.5 cents for every $1 earned by men in 2016, according to the most recent Census data.
The difference between what men and women earn isn’t just academic: Women on average are losing out on $10,086 in pay each year because of the pay gap, according to the National Partnership for Women & Families. That contributes to higher levels of poverty and income inequality — as well as leaving women less secure in their retirements.
So why do women earn less than men? As the Economic Policy Institute’s Elise Gould and Jessica Schieder note in a report, it’s impossible to “mansplain away.” Not only does the gap exists, but research points to a complicated mix of bias and occupational choices that create a pervasive cycle of lower earnings for women.
1. Lower pay for women starts with “occupational segregation”
Economists are increasingly examining the role of “occupational segregation,” or how women and men are steered toward different occupations. For instance, girls are often encouraged to enter “soft” professions such as education, while boys are routed into math or science-related fields.
A Kindergarten teacher will never earn as much as a financier.
Because many women are less likely to be encouraged to study higher-paying fields, they are placed on a track for lower life-long earnings.
The Department of Labor points to occupational segregation as causing much of the pay gap, according to a report on women’s pay and the wage gap. Women tend to disproportionately work in lower-paid fields, while men dominate higher-paid industries.
Progress on eliminating occupational segregation has stalled since the early 2000s, according to the American Association of University Women.
2. Pay is unequal right out of college
Not all of the gender wage gap can be explained by occupational choice, however. Women are paid less than men in their first jobs after college, even when adjusting for their occupations and field of study.
One year after graduating from college, women with a computer science degree — a high-earning field — are earning 77 cents for each $1 earned by their male classmates with the same degree, according to the American Association of University Women.
Because women tend to earn higher grades than men, the gap isn’t due to academic differences between the genders, they noted.
From their first job, women can get locked into permanently lower pay, given subsequent employers often base their salary offers on what job candidates previously earned.
3. Women get hit with a “motherhood penalty”
The biggest pay hit happens when women have children, leading to what researchers call a “motherhood penalty.”
University of Massachusetts sociology professor Michelle Budig found women’s earnings slip 4 percent for each child they have. Men’s earnings, by comparison, get a bump when they have children.
Employers may believe women aren’t as committed to their jobs after they have children, although compensation research firm Payscale found that menmore than women workers.
Yet it’s true that women are bearing the burden of childcare and household work. Women spend twice as much time as men caring for or helping children and other household members. They’re also twice as likely to do housework on a typical day than men, according to the American Time Use Survey.
4. Women lose pay gains when they step out of the workforce
Another side of the motherhood penalty is the impact felt by some women if they step away from work to care for children or family members.
It’s a decision primarily taken by women, with Pew Research Center noting that the country had 10.4 million stay-at-home mothers in 2012, compared with about 2 million stay-at-home dads.
Stepping out of the workforce has lasting implications for a woman’s salary and financial health. A woman who earns $44,000 per year and decides to take 5 years out of the workforce to care for a child will lose out on wages of $220,000.
But her losses grow considerably larger when considering the lost retirement savings and wage growth. All together, her income loss will reach almost $707,000, according to the Center for American Progress.