Wage gap costs women $1.6 trillion a year, report says

In the United States, the wage gap costs women about $1.6 trillion a year, according to a new report.

Women earned 78 cents for every dollar earned by men in 2022, according to the National Partnership for Women and Families.

The researchers calculated the full cost of the wage gap for women using statistics from the U.S. Census Bureau, specifically data on all women who worked, whether full-time or part-time, and those who took leave due to illness or care.

“The wage gap has been around for so long that people are no longer aware of it and think it’s normal,” said Jocelyn Frye, president of the National Partnership for Women and Families. “But it’s not something we should consider normal, and we shouldn’t normalize disparities that shouldn’t exist.”

Although the numbers are discouraging, experts say this information should motivate women to be more aggressive in salary negotiations.

“I don’t want this to deter women or make them feel less motivated to go out there and get the pay they deserve,” said career and money expert Mandi Woodruff-Santos.

Three factors contribute to the persistent wage gap, Frye said:

1. Caregiver Responsibilities: On average, women tend to work fewer hours because they shoulder many of the family responsibilities, she said. For example, last year, women spent about 2.68 hours per day caring for household children under age 6, according to the American Time Use Survey.
2. Professional segregation: Women are concentrated in lower-paying jobs and are often excluded from higher-paying jobs due to occupational segregation, she said. Forty-two percent of the wage gap is the result of occupational segregation, exacerbated by the pandemic, the U.S. Department of Labor found.
3. Discrimination in the workplace: Women continue to face gender bias and discrimination. At this point, half of U.S. adults say employers’ different treatment of women contributes to the pay gap, according to the Pew Research Center.

“If you intervene on just these three issues, you could close this gap significantly,” Frye said.

Asian American women earned the most among workers, earning 89 cents for every dollar earned by non-Hispanic white workers, the National Partnership for Women and Families found.

This wage scale deteriorates for every major racial or ethnic group in the country, with white female workers being paid 74 cents on the dollar; Black female workers, 66 cents; and Latina workers, 52 cents.

It’s important not to ignore the data, but rather let it motivate you, added Woodruff-Santos, co-host of the “Brown Ambition” podcast series and founder of MandiMoney Makers.

“While data like this is important, it should not discourage women of all shades,” Woodruff-Santos said. “You don’t have to be a statistic.”

Here are three tips for moving forward:

If you want to advance in your career, you need connections. To build connections, you need to feel comfortable talking with different people.

First, build your confidence by sharing your work and expertise with those around you, both in your business and in the broader industry in which you work. For example, showcase your expertise at work during monthly team meetings and, for a broader reach, on social media platforms.

“Make sure your name is well known throughout the company and associated with excellence,” Woodruff-Santos said.

As you become more known to others, conversations can become increasingly uncomfortable as you grow as a woman — and even more so if you’re a woman of color, she added.

“These rooms weren’t built with us in mind, but it’s important that you continue to push and sit at these tables,” Woodruff-Santos said.

You should make an effort to have in-depth conversations with hiring managers and recruiters, and ask them about the pay ranges for someone with your experience to get an idea of ​​your current market value.

You can later pass this information on to your current employer when negotiating salary increases. However, what constitutes even better leverage is having a competing job offer, Woodruff-Santos said.

“Women often need proof that they are wanted by another company to wake up our managers and superiors,” she said. “If they’re not afraid of losing you, you carry less weight.”

The “compensation cupcake” is the analogy Woodruff-Santos uses to help people determine their asking price and understand their value.

The basis of the cupcake, or the cake itself, is the market rate for your base salary. The icing, on the other hand, represents your additional incentives, such as annual bonuses, stock awards, or professional reimbursement funds offered by your company.

“These are financial benefits that we get that are not part of our base salary, but are definitely like money in our pocket,” she said.

The sprinkles on the cupcake symbolize unvested benefits, like equity or 401(k) plan matches. Finally, everything is topped off with an “equalizer cherry,” which deals with data such as the gender pay gap.

“Add a 10 to 20 percent premium to any compensation you think you’re fighting for, just to make up that shortfall,” Woodruff-Santos said.