Written by Naomi Rovnick, CNN
CNN’s senior science correspondent Sara Forden and Eileen Sullivan, editorial director of LinkedIn, discuss the science behind women’s historically lower earnings relative to men and how the new “Three-R” wage gap will impact the labor market.
A new gender pay gap in the US is expected to be revealed this week, reflecting a significant shift in how much women actually earn compared to men.
The wage gap, formally called the “wage gap between men and women in the US,” is not that straightforward, as salary data is often based on hourly rates, which are not always the same as base salaries.
In fact, almost 20% of the wage gap can be attributed to average hourly wages, which can shift from year to year depending on factors like hiring, promotions and transfers, according to a study published by the National Bureau of Economic Research.
For example, a female office manager who works 40 hours a week and earns $45,000 would have an annual salary of $85,000, assuming her hours were constant year to year. But if she were to work an additional 10 hours, her earnings would be about $150,000, meaning she now earned about $5,000 more than a similarly-qualified male counterpart.
That extra money can be crucial as women in the US make up the majority of part-time workers — 73% — and who lose out on higher wages, since wages drop when they are employed part-time.
But could that $5,000 difference have been another Joe, who worked only 30 hours a week at the office? Would the female office manager have been out $5,000? We’re about to find out.
‘Women around the world still earn $1.20 less than men’
The new wage gap shows a slight increase in average hourly wages. It’s based on surveys of median wage levels from more than a quarter of a million women and men, who filled out federal unemployment forms during 2017. This new wage gap information will be revealed Wednesday at the American Economic Association’s annual meeting.
While salaries have risen, both the median wage and the income gap have narrowed since 2017, says Jill Harth, co-founder of PredictableWages.com. And these numbers could shift as the year goes on: “The data suggest that if women had the same income as men starting in 2014, we would be looking at this bigger salary gap.”
Meanwhile, while the $5,000 difference between men and women is “really small,” Harth points out it is still significant, even small enough to spur different perspectives about this topic.
“This is just a drop in the bucket, but what I want people to be focused on is that it’s happening and when people see that, they’re going to want to do something about it,” Harth says.
“I think it’s important to pay attention because the wage gap is getting smaller, but it’s still inequality of pay and not equality of pay,” adds Harth.
If Trump signs 2019 State of the Union Day off, will that just mean more red states?
The wage gap phenomenon
As the wage gap was shrinking, the word “gender pay gap” became less widespread in 2013, according to the Project on Fair Wages. But if you didn’t recognize it before, you will now — unless your employer chooses to not list it at all, says Harth.
“That’s probably the biggest change from what the public thinks, as the word gender pay gap has really disappeared from companies.”
Her advice to those who are trying to close the gender pay gap at their company: “Try to focus on the specifics of what they’re doing, such as their recruitment process, and make sure that they are taking the full advantage of the data.”