Pay inequality has gradually lessened, but biases delay progress
Reviewed by Michelle P. ScottFact checked by Pete Rathburn
Since at least the 19th century men and women have not been paid equitably for their work. Although there has been some progress toward closing the gender wage gap between men and women in the United States thanks to the passage of laws prohibiting such discrimination, the results haven’t been equally felt by all women.
The intersectionality between America’s gender wage gap and its wage gaps by race is a primary cause of the substantial race-based income inequality in the U.S. LGBTQ+ people also face pay gaps in a number of ways.
Key Takeaways
- Women have typically earned less than men for doing the same type of work.
- Women of color, regardless of education, are often channeled to lower-paying jobs compared with White women operating at a similar skill level.
- LGBTQ+ individuals must also contend with the gender wage gap, in addition to facing a pay gap for their gender identity and/or sexual orientation.
- Though laws have been passed to address the gender wage gap, many factors and biases continue to enable its existence.
The Gender Wage Gap: A Long History
The wage gap between men and women has a long history, with some twists that may be unfamiliar to many. Those who know about Rosie the Riveter are likely well aware that during World War II, American women entered the workforce en masse, often into traditionally male-dominated fields, as men left to fight overseas. Nevertheless, this wasn’t the first great American war for which women stepped up to attend to needs on the home front.
During World War I many women took over for the men who were leaving to fight in what was called the “Great War.” When these new workers realized they were going to be paid less than a man for the same labor, several strikes ensued. During WWII demands for wage equality returned in force, with trade unions and women’s organizations becoming more heavily involved.
It took some 20 years for these demands to bear fruit with actual laws. The first pillar was the Equal Pay Act of 1963, which included the requirement that men and women receive the same pay for “substantially equal” work in the same workplace. A year later Title VII of the Civil Rights Act of 1964 expanded on this legislative groundwork by banning compensation discrimination due to “race, color, religion, sex, and national origin.”
However, it took 46 years—and a Supreme Court dissent by Supreme Court Justice Ruth Bader Ginsburg—before the passage of the Lilly Ledbetter Fair Pay Act in 2009, which provided that every discriminatory paycheck, not merely the employer’s initial pay decision, constituted a new discriminatory act for which the worker could file a claim and recover up to two prior years’ worth of back pay.
Understanding the Wage Gap
According to the “Cambridge Dictionary,” a wage gap is “the difference between the average pay of two different groups of people.” The gender pay gap, as defined by the Organisation for Economic Co-operation and Development, is “the difference between median earnings of men and women relative to median earnings of men.”
According to Payscale’s 2024 Gender Pay Gap Report, women on average earn 83 cents for every dollar earned on average by men in 2024. That’s a 17-cent difference with a notable impact. Working women collectively earned over $500 billion less than men in 2022, according to data from the U.S. Census Bureau cited by the American Association of University Women (AAUW).
Gender wage gaps can be attributed to a multitude of elements that often overlap. For instance, although differences in education or geographic location do contribute to wage inequality, gendered pay gaps still persist in their absence. Additionally, many of the potential contributing factors that might seem independent of a worker’s gender—such as differences in experience or hours worked—can themselves be the results of societal gender bias.
For example, traditional gender role expectations establish housekeeping and parenting as the primary responsibilities of women, which can leave them with fewer hours available to work and less industry experience than men. Benefits such as paid family leave and affordable childcare encourage mothers to return to work. Still, the U.S. Bureau of Labor Statistics said that as of 2023 only 27% of civilian workers had access to employer-sponsored paid family leave. Additionally, persistent income inequality based on factors other than gender can limit which groups of women are able to afford services such as childcare.
Intersection of Race and Gender
The 17-cent wage gap isn’t experienced equally by all women; some women make even less as a result of additional discrimination against other demographic characteristics. According to Bureau of Labor Statistics data for the fourth quarter of 2023, Asian women had a higher weekly median income than White, Black, and Latinx women for this period.
Though women across all four of these racial groups earned less than men of their same race, in the fourth quarter of 2023 Asian women earned more than White men. This wasn’t always the case. Between 2000 and mid-2019, though Asian women earned more than all other women, they had a lower weekly median income than White men. Asian men were the only demographic to earn more than White men in both the fourth quarter of 2023 and 2000 to 2021.
These statistics, however, rely on average values and don’t paint an exact picture. For example, though Asian American women earn more than White men overall, that’s not true of all Asian American women: For every dollar earned by White men in 2022, Filipino women earned 79 cents, Native Hawaiian women earned 61 cents, Tongan women earned 52 cents, and Nepali women earned 48 cents.
Meanwhile, in 2023 Black and Latinx women both had lower weekly median incomes than White women, with Latinx women earning the least of any group. The fact that most women of color are experiencing a larger wage gap is indicative of the compounding negative impacts of gender bias and racial bias on their income.
Gendered Opportunity Gaps
Education reformers refer to an opportunity gap as “the ways in which race, ethnicity, socioeconomic status, English proficiency, community wealth, familial situations, or other factors contribute to or perpetuate lower educational aspirations, achievement, and attainment for certain groups of students.” Outside of the education field, the same basic concept also applies to the obstacles workers face as a result of their demographic characteristics.
Teachers and other kinds of mentors often point to the importance of networking, which provides participants with a kind of social capital (i.e, a positive product of human interaction for a person’s career). Having friends, family members, or other social connections in high places typically makes securing job opportunities much easier. Because this social capital isn’t evenly distributed, it creates an opportunity gap.
Myriad other factors contribute to the overall opportunity gap. One of the more prominent is what’s known as “occupational segregation,” which is “a group’s overrepresentation or underrepresentation in certain jobs or fields of work,” as the Washington Center for Equitable Growth puts it. In 2020 the Center found that fields dominated by men tend to be higher-paying ones, regardless of skill or education level.
Meanwhile, societal pressure and structural sexism may influence the career paths that some women take. In particular, Black and Latinx women, regardless of education, are often concentrated in lower-paying jobs compared with White women operating at a similar skill level. For instance, a 2021 study by the Pew Research Center indicates that most women of color continue to have much lower representation in lucrative STEM careers.
And of course, there’s also the continuing sexism and misogyny in the job market. Even though the Equal Pay Act made gender-based discrimination illegal, unfortunately, it can still be commonplace. Outside of the actual wage gap itself, employers may discriminate by relying on a person’s salary history during hiring and compensation, which perpetuates pay disparities. To thwart discrimination, some states in recent years have banned the practice of employers asking job candidates about their salary history.
If you believe that you are being paid less than your coworkers because of your race, color, religion, sex, national origin, age, or disability, you can file a complaint with the U.S. Equal Employment Opportunity Commission (EEOC). The complaint process is detailed on the agency’s website.
Transgender and Nonbinary Wage Gap
In addition to facing discrimination for their gender identity and/or sexual orientation, LGBTQ+ individuals may also contend with wage gaps for their identities. The intersection of these two socioeconomic divides can result in unique circumstances for workers outside the gender binary. For instance, the Human Rights Campaign reports that transgender men and women made 70 cents and 60 cents, respectively, for every dollar the “typical worker” (e.g., the median wage for all workers in the United States) earns. Additionally, a 2008 study found that the average earnings for transgender women fell by approximately 32% after transitioning. Conversely, the average earnings for transgender men actually increased post-transition, albeit only by 1.5%.
Several transgender men in the same 2008 study reported gaining additional authority and respect at work following their transition. Other researchers found that transgender women had trouble maintaining employment, with more recent data indicating that many leave high-paying jobs for lower-paying ones due to workplace discrimination. Some transgender men, however, have reported having trouble being accepted at work, particularly if they lacked an “undisputed masculine appearance.”
That said, transgender and transitioning individuals may face wage and opportunity gaps regardless of their gender identity. The 2022 U.S. Transgender Survey found that more than one third (34%) were experiencing poverty. The survey also found that 11% of respondents who had a job in the previous year were fired, forced to resign, lost the job, or been laid off due to their gender identity or expression. And the unemployment rate among the survey respondents was 18%.
The Human Rights Campaign also found that nonbinary, genderqueer, genderfluid, and two-spirit workers made 70 cents for every dollar the typical worker earns. In terms of the opportunity gap, a 2016 study found that nonbinary individuals assigned male at birth (AMAB) typically faced hiring discrimination, while those assigned female at birth (AFAB) more often experienced discriminatory treatment within their workplaces. Additionally, nonbinary people as a whole were more likely to have been denied a promotion, though they generally have fared better than transgender women.
Note
Research on the pay gap LGBTQ+ Americans face is relatively scarce, particularly when it comes to addressing diversity within the community, which is due in part to a lack of data collected by the federal government. The 2020 Census, for example, was the first U.S. Census Bureau survey to collect data on same-sex couples, but it only did so on those living together. This was the only question that addressed the LGBTQ+ demographic.
The Effect of Sexual Harassment
Although inappropriate sexual remarks and physical advances in the workplace are prohibited by Title VII of the Civil Rights Act, much like the wage gap itself, sexual harassment is still all too commonplace. Though experiencing it isn’t exclusive to women, it disproportionally affects them. The U.S. Equal Employment Opportunity Commission found that approximately 83.7% of the 6,201 sexual harassment charges filed in 2022 were filed by women, compared with 16.3% filed by men.
In addition to emotional harm, sexual harassment can negatively impact a woman’s earnings. For instance, a report published by the National Partnership for Women & Families in March 2021 found that women in workplaces where sexual harassment isn’t reported may be less comfortable negotiating salaries and raises. Incidents of sexual harassment in the workplace often go unreported due to fears of retaliation, termination, or inaction. In a 2018 Morning Consult survey, 46% of women who reported sexual harassment to their bosses or human resources departments were dissatisfied with the results.
Sexual harassment can affect job performance, workplace advancement, and career choices. Women who experience it in the workplace often report heightened anxiety and depression, which can affect productivity and overall performance. According to a 2019 report from the American Association of University Women, 38% of surveyed women experiencing workplace sexual harassment reported that it contributed to their decision to leave a job early, while a 2018 New America study found that women could be pushed out of entire industries, amplifying occupational segregation.
Additionally, women of color, LGBTQ+ women, and women with disabilities may face both greater financial consequences and an increased risk of retaliation, doubt, victim-blaming, and other prejudiced responses for reporting sexual harassment.
Gender Gaps on a Global Scale
Each year the World Economic Forum studies and indexes worldwide gender-based disparities as part of its annual Global Gender Gap Report. In addition to its overall assessment of wage and opportunity gaps, the 2023 Global Gender Gap Index comprises four comprehensive subindexes, each measuring a different type of gender disparity across 146 countries. These include:
- Economic participation and opportunity: This index measures wage equality between women and men for similar work, plus the difference in estimated earned income, labor force participation, and the number of professional and technical workers as well as legislators, senior officials, and managers between men and women. The economic participation and opportunity gap is the second largest, at 39.9%.
- Educational attainment: This index measures the difference in net primary, secondary, and tertiary enrollment rates as well as literacy rates between women and men. The educational attainment gap is the second smallest, at 4.8%.
- Health and survival: This index measures the difference in healthy life expectancy between women and men as well as the sex ratio at birth. The health and survival gap is the closest to closing, with only 4.0% remaining.
- Political empowerment: This index measures the difference between the number of women and men in parliament seats and at the ministerial level, as well as the number of years women have served as heads of state over the past five decades. The political empowerment gap is the farthest from closing, with 77.9% still remaining.
31.6%
The percentage of the overall global gender gap that has yet to be closed as of 2023.
Outside of topics that have already been covered in this article, these subindexes measure several additional gender discrepancies that aren’t always considered when discussing the wage gap, despite the socioeconomic impact they can have on the personal level and conditions that enable discriminatory income differences. For example, if women are denied a higher quality of healthcare, it may impact their ability to work should they become sick or injured. Additionally, it could prove difficult to enact effective legislative changes to reduce an income gap if those with political power benefit from the current status quo.
Although each country is given its own score, the global average values make it easier to quantify how the more abstract opportunity gaps have changed over time. For instance, the 2023 report found that the overall index and three out of the four subindexes had improved from 2022. The only one that decreased was the economic participation and opportunity subindex, from 39.7% to 39.9%.
What Is the Gender Pay Gap in 2024?
As of 2024 women earn 83 cents on average for every dollar made by men on average. The gender pay gap has improved by 8 cents since 2015.
Why Is the Gender Pay Gap so Large?
While several laws have been passed that made gender-based pay discrimination illegal in the U.S., there are multiple factors that have allowed this type of wage gap to endure, such as conscious and unconscious discrimination and bias in hiring and pay decisions, higher rates of part-time work for women, and women and men working in different industries and jobs, with female-dominated industries and careers attracting lower wages.
What Country Has the Lowest Gender Pay Gap?
While no country has achieved full gender parity, as of 2023 Iceland’s economy (at 91.2%) has the lowest pay gap by gender and is the only one that has closed over 90% of its pay gap.
The Bottom Line
Although the gender wage gap has narrowed over the years, it will never completely close without coordinated efforts that address the many factors and biases that continue to enable its existence. Companies have to get involved in this by ensuring that all employees are being paid a fair wage for their labor and the workplace itself is a safe environment for all women.
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