By Grace Ewles and Arushi Dawar
Equal pay, gender equality, and protection from workplace discrimination have been the core pursuit of the women’s rights movement since its founding in the 1960s. Although we have made laudable progress on these fronts, significant systemic and structural barriers remain for women, with one of the largest challenges revolving around the gender wage gap.
An Introduction to the Gender Wage Gap
Much has been said about the gender wage gap over the years; in countries with laws prohibiting discrimination based on gender, some argue the gender wage gap is a myth since gender-based discrimination is illegal. However, this perspective does not take into account the “systemic differences between the average wages or salaries of men and those of women” (Brittanica).
It is estimated that globally women make 23 percent less compared to their male counterparts, with women earning $0.77, on average, for every $1.00 earned by men (UN Women). Although the size of the gender wage gap varies across countries (see "Gender wage gap," OECD, for its 2022 gender wage gap data by country), the gap remains present across geographic locations, industries, and job levels.
When an intersectional lens is applied to the data, the gap becomes wider. (For more information on intersectionality, see McLean & Company’s Diversity, Equity, and Inclusion Primer.) For example, a study revealed Black and Hispanic women experience the largest gender wage gap in the United States, earning 70% and 65% as much as white men, respectively, whereas white women earn 83% as much as white men ("The Enduring Grip," Pew Research Center, 2023). Differences in the gender wage gap also extend to family status, with working mothers earning an average of $0.70 for every $1.00 earned by working fathers (National Women’s Law Center, 2020), a phenomenon frequently referred to as ”the motherhood penalty” (AAUW). These differences result in significant long-term impacts, including a greater number of women living in poverty (Institute for Women’s Policy Research), increased repayment timelines for student loan debt ("Deeper in Debt," AAUW), and a negative impact on long-term financial planning (UBS Wealth Management).
Narrowing the Gap
Unfortunately, trending data over the past two decades shows little movement in closing the gap, with women in the US earning 80% as much as men, on average, in 2002, and 82% in 2022 ("Gender pay gap," PEW Research Center, 2023). While this gain of two percentage points is narrowing the gender wage gap, global data estimates it will take 135.6 years to close the gap worldwide (World Economic Forum, 2021).
Research shows the underlying causes of the gender wage gap are systemic in nature; factors such as education, experience, and hours worked account for only a portion of the variability we see in pay differences (Economic Policy Institute). Together, this research highlights the complexity of the gender wage gap and shows that anti-discrimination laws alone are not enough to close the gap.
Accelerating Change
Moving forward requires efforts at both the societal and organizational levels. Here, organizations can prioritize the following actions to minimize the gender wage gap within their systems:
- Build inclusivity from the start. Embed inclusive practices in the early stages of the employee lifecycle (e.g. attract, recruit) to minimize the presence of the gender wage gap from the beginning of the employer-employee relationship. For example, eliminating non-critical requirements and increasing pay transparency by including pay rates in job postings help build equity and minimize the number of women self-selecting out of the application process. For more information, see McLean & Company’s Job Aid: Diversity, Equity, and Inclusion in Talent Acquisition and The Rise of Organizational Transparency.
- Conduct an internal salary assessment. Identify a cadence to regularly conduct salary assessments to promote internal and external equity, including assessing pay gaps and identifying systemic patterns of inequity from an intersectional lens to address root causes. For more information, see McLean & Company’s Conduct a Salary Assessment.
- Prioritize identifying and addressing inequities. Leverage a data-driven approach to identify and challenge systemic inequities that perpetuate the gender wage gap. For example, explore internal practices related to the perform and grow phases of the employee lifecycle to remove barriers to career advancement opportunities for women and ensure performance is measured fairly and objectively, particularly when using a pay-for-performance model. For more information, see McLean & Company’s Create a People-First Diversity, Equity, and Inclusion Strategy, Modernize Performance Management, and Evolve Pay for Performance.
Closing the gender wage gap requires active efforts and commitment at multiple levels to identify and address systemic inequality. Through these concerted efforts, employers can begin to advance a little faster toward their DEI goals and play a part in shaping a more equitable future for all.
For more information, see our Diversity, Equity & Inclusion (DEI) Resource Center. To learn more about our research and services, please reach out to jcampbell@mcleanco.com.
This article was written on behalf of the Women’s Employee Resource Group at Info-Tech Research Group. McLean & Company is a division of Info-Tech Research Group.
Works Cited
Aragão, Carolina. “Gender Pay Gap in U.S. Hasn’t Changed Much in Two Decades.” Pew Research Center, 1 March 2023.
“Deeper in Debt: Women & Student Loans.” AAUW, May 2017.
"Equal pay for work of equal value." UN Women, n.d.
“Gender Wage Gap.” Britannica, 9 May 2023.
“Gender Wage Gap.” OECD, 2022.
“Global Gender Gap Report 2021.” World Economic Forum, March 2021.
Kochhar, Rakesh. “The Enduring Grip of the Gender Pay Gap.” Pew Research Center, 1 March 2023.
Milli, Jessica, et al. “The Impact of Equal Pay on Poverty and the Economy.” Institute for Women’s Policy Research, April 2017.
“The Motherhood Penalty.” AAUW, n.d.
Schieder, Jessica, and Elise Gould. “’Women’s Work’ and the Gender Pay Gap.” Economic Policy Institute, 20 July 2016.
“Taking Action: How Can Women Best Protect and Grow their Wealth.” UBS Wealth Management, Oct. 2017.
“The Wage Gap: The Who, How, Why, and What to Do.” National Women’s Law Center, Oct. 2020.