Equal Pay Day sets reminder: gender pay gap exists

By Kalea Hall



The gender pay gap exists, and it impacts not just society, but the nation’s economy, researchers say.

Today is Equal Pay Day – a day set to symbolize how far into the year women must work to earn what men earned the previous year.

In the U.S., women make 79 cents for every $1 men make.

The income loss for women translates to a loss for the economy – globally, nationally and regionally.

“Lots of people believe men should be paid more than women,” said George Zeller, a Cleveland-based economist. “Changing that [belief] is a very difficult comprehensive task. This is not just a problem in India and Singapore, it’s a problem in the U.S.”

In 2014, women’s median earnings were 79 percent of men’s median earnings, according to the American Association of University Women’s, AAUW, report on the gender pay gap.

The year 2014 was the last one for which statistics and data were available.

Using data from the U.S. Census Bureau, the AAUW also looked at the wage gap state by state. The data shows Washington, D.C., with the smallest wage gap of 90 percent in 2014. In Ohio, women made 78 percent of what men made in median earnings.

The reasons for the pay gap are vast.

Janice Elias, Ph.D, a professor emeritus at Youngstown State University in the Department of Human Ecology, teaches a class called work and family that features the factors that impact a woman’s salary.

One factor is women are less likely to negotiate for a higher salary.

“A second big factor is that women are more likely to have a discontinuous work history,” Elias said.

A woman is more likely to be the stay-at-home parent than a man, Elias noted.

Another factor leading to lower wages for women is the tendency women have to enter into lower-paying industries.

In 2014, the civilian force included 146 million full-time and part-time employed workers, where 53 percent were men and 47 percent were women.

Forty percent of working women were employed in traditionally female occupations such as social work, nursing and teaching. Forty-three percent of men were employed in computer programming, engineering and firefighting, according to AAUW’s report.

“The general trend is where fields are male dominated they tend to pay more,” said Kevin Miller, senior researcher at AAUW.

In September 2015, McKinsey Global Institute, the business and economics research arm of McKinsey & Co., came out with a report that showed the impact of the pay gap on the global economy. Advancing women’s equality in the world can add $12 trillion to global growth, according to the report.

In a “full-potential” scenario, a world where women participate in the economy the same as men, the MCI study found that it would add up to $28 trillion, or 26 percent, to annual global GDP (gross domestic product) in 2025, which is equivalent to the combined U.S. and China economies.

The study also looked at the alternative “best-in-region” scenario in which all countries match the rate of improvement of the best-performing country in their region, which would add as much as $12 trillion in annual 2025 GDP.

The study looks at six types of intervention needed to bridge the gender gap: financial incentives and support; technology and infrastructure; the creation of economic opportunity; capability building; advocacy and shaping attitudes; and laws, policies and regulations.

Less pay for women means less money flowing into the economy.

“If we were to equalize pay, [women] are going to have more money to save or spend,” PNC economist Mekael Teshome said.

Equal pay for women would also improve labor force participation, he said.

“If you can close this gap it will encourage more women to join or stay in the labor force,” Teshome said.

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