In commemoration of the International Women’s Day, let’s address one of the most persistent problems women face today — globally.
History informs us that when women increase their involvement in any given society’s workforce, the society’s overall development improves. This means increased economic productivity, more fair and representative governments and institutions and a better life for future generations. As the International Monetary Fund states, “Empowering Women Is Smart Economics”.
Yet there remains a difference between the percentage of women and men in the workforce. Inequality also exists in how well women and men are compensated for equivalent work. According to a report by the Pew Research Center, in 2023 US women’s medium annual earnings are only 82% of men’s. Similar disparities exist in countries around the world. The gender pay gap is a persistent and long-standing issue that derives from social, economical and cultural factors.
Unfortunately, the COVID-19 recession hit women particularly hard. Women had to juggle childcare, housework and job responsibilities in the midst of a pandemic — if they had a job at all. Unfortunately, having children or having any type of care labor depresses any woman’s employment prospects.
Women’s Ages, Races and Sexual Orientation Amplify the Pay Gap
In a complex set of circumstances, the gender pay gap actually increases as women workers age. The Pew Research Center reports that In terms of weekly earnings, the average 24 year old woman earns 8% less than a man her age in the same job. At 30 years old, the pay gap increases to 16%, and for women between 60 and 65 years old it is 22%. Women aged 65 and older typically earn 27% less than men in similar positions.
The Pew Research Center analysis shows that the pay gap also varies when women are grouped by race. While the pay gap has narrowed for all racial groups in America in the last 40 years, the disparity remains very large for Black and Hispanic women, who on average are paid only 70% and 65% (respectively) of what their male counterparts make. Asian American women face the smallest pay gap at 93%, while the gap for white women is 83%.
Women who have disabilities and/or are members of the LGBTQ community fare worse than other women. Each woman’s experience is unique, with most women facing a lifetime of making less than their male counterparts.
Factors: Discrimination, Occupational Segregation and Caregiving
The factors that created and maintain the pay gap are many and complex. While a full examination goes well beyond the scope of this piece, we can take a quick look at three of the biggest factors.
Discrimination (conscious or unconscious) against women in the workplace happens across the board. McKinsey & Company, in partnership with LeanIn.org, recently published a report on Women in the Workforce 2022 which examines gender bias throughout the life of women workers in the United States. The report shows that women still fare less well than their similarly-situated male counterparts in the hiring process, which reduces their opportunities to attain employment. Once in the workplace, women report experiencing “less psychological safety” and are less likely to have allies or advocates for them to advance in their careers. Furthermore, women are more likely to experience “demeaning and ‘othering’ microaggressions” than male workers, with women with disabilities, in particular “often have their competence challenged and undermined”.
Occupational segregation is another factor in the wage gap. It is the tendency for certain groups of people to be concentrated in particular occupations and industries. Occupational segregation is related to historic socialization, which dictates what types of work are “appropriate” for women. Teaching, nursing, caring for the elders and administrative roles are considered “female-dominated”. Men, on the other hand, are more likely to work in higher-paying and male-dominated fields such as engineering, technology, and finance.
Finally, although men have taken a larger role in family caregiving this century, it is still true that women are more likely to perform caregiving duties than men. Not surprisingly, the time and emotional energy invested in caregiving often become obstacles to women in their careers. While it has been illegal to fire a woman because of her pregnancy since 1978, motherhood and other caregiving responsibilities still negatively impact women’s earning capacity. The 2022 numbers from the US Bureau of Labor Statistics show that regardless of age or parental status, women were five to eight times more likely to experience a caregiving impact on their employment.
Bottom Line
We still have a long way to go. Women need to have economic security and financial independence to help themselves, their families, and the society they live in.
Have you suffered from gender discrimination at any point of your career? Is there any story or data you’d like to share? Please feel free to leave a comment or reach out to me via Twitter or Facebook. At LexION Capitall, our priority is to make our clients’ financial goals a reality by providing hands-on wealth management solutions, backed up by science-based insights into the financial industry. We help you maintain well-diversified investment plans. Should you need help in the aspect of financial growth, please visit my company’s website, LexION Capital.
Elle Kaplan is the founder and CEO of LexION Capital, a fiduciary wealth management firm in New York City serving everyone who feels left out by traditional “Wall Street”, including women and the families they love.
