While women continue to make strides toward equality both socially and professionally, a divide between the earning powers of males and females continues to exist in most sectors of American business. Studies have shown that the number of women entrepreneurs is growing steadily, and some may argue that gender roles in business are slowly but surely approaching parity.
Although there is still work to be done to ensure this parity is reached, statistics pulled from recent studies suggest that the gender gap in American business is beginning to fade. A few analysts even conclude that due to the higher female graduation rates and other factors a role reversal is taking place, one in which women will soon assume the dominant position.
Let’s take a look at these stats in an attempt to draw our own conclusions on the state of gender roles in American business.
Gender Discrimination in the Workplace
A few months ago, the Pew Research Center conducted a survey asking respondents about the role gender plays in business, specifically in relation to earning power and access to top executive and management positions. And although it doesn’t seem like a wide, sweeping problem, the findings show that, at least in the minds of respondents, gender does factor into high-ranking business decisions.
While 86% of the survey’s respondents say they’ve never been discriminated against at work because of gender, 18% of women said they had been, compared to only 10% of men. Of the respondents that said yes, 39% of women and 34% of men said they had been turned down for a promotion because of gender, while 31% of women and 30% of men said they had been outright denied a job because of it.
According to the survey, the gap in gender discrimination when it comes to landing jobs and promotions seems slight, but it also shows that the gap in earning power is still very prominent. The survey asked if respondents felt they earned less than a member of the opposite sex who was doing the same job:
- · 52% said yes, including 27% of men and 66% of women.
While definitely not concrete evidence, these responses show, at the very least, that women feel under-compensated in the workplace. But is this truly the case?
Progress in the Wage Divide
Another study performed by the Bureau of Labor Statistics sought to compare the wage gap of generations past with that of the present, and it shows that women have continued to make strides toward equality in recent decades.
A staggering statistic from days past is the catalyst of the report:
- In 1979, women working full-time earned only 62% of what men did.
Decades later, the study found:
- In 2012, women earned 80.9% of what males earned.
This progress is promising, but it’s also a bit misleading. An earlier study conducted by the BLS compared the earning powers of both genders by age groups, and it found that younger generations of women have made even more progress than shown when making a generalized comparison:
- Women between the ages of 20 and 24 earn 93.2% of what males of the same age earn.
- Those between 25 and 34 earn 92.3% of their male counterparts.
- Beyond 35, women earn anywhere from 75% to 79% of what males earn.
In addition to age, industry sectors also play a factor in earning power for women. The study found that the largest wage gap exists in the financial services industry, in which women earn only 70.5 cents for every dollar earned by men. (Another study found that women with MBAs earn about $4,600 less in their first jobs than men in similar positions, perhaps further suggesting a systemic problem within the industry.) Somewhat surprisingly, the industry with one of the smallest divides in wages is construction, where women earn 92.2% of what men do.
Reasons for the Wage Gap
While the factors contributing to the divide will continue to be debated, many believe the gap in wages is due to interruptions in women’s careers. The Pew Research study found that 53% of respondents (46% of men and 60% of women) believe females earn less because they “make different choices about how to balance work and family.”
Another study performed by the Institute for Women’s Policy Research came to a similar conclusion, adding that taking time off to care for children and the elderly force more women into accepting only part-time positions, contributing to the disparity of wages between males and females. It also found that women tend to work in lower-paying industries and professions, labeling these as “help” and “support” positions, but opening up yet another debate about the relegation of “female” professions that further contributes to the wage divide.
As family life has become a factor for lesser wages for women, the Institute found in another study that the opposite is true for men: Men who are married and have dependent children are more likely to have higher earnings and work longer hours than their female counterparts, a finding that may suggest the divide in earnings starts at home.
MIT economist David Autor and Melanie Wasserman recently released a study that focused on gender-related trends in the workplace in comparison to education. The study concluded that the gender gap in wages is shrinking, and they equated this shrinking to the underperformance of males in school in relation to females.
Like the studies previously discussed, Autor and Wasserman’s findings show wages for women have increased “substantially more” than males in recent decades. This increase correlates to increased graduation rates for women and decreased rates for men:
- While males born in the 1930s and 40s had a 10% higher likelihood to attend college over females, college attendance rates reached gender parity for those born in the 50s.
- But for those born in the 1970s, females were 17% more likely to attend college and 23% more likely to earn a four-year degree than males.
The study found that these stats directly correlate to earning power, as males without college degrees saw their earnings fall anywhere between 5% and 25% in the last 30 years. These stats suggest, the study argues, “that an emerging economic gender gap favoring women is developing.”
Another BLS study found that, on an inflation-adjusted basis, earnings for female college grads have increased by 30.8% since 1979, compared to only 16.3% for their male counterparts. Yet another BLS study found that women now account for about 51% of all persons employed in management, professional and related occupations, which is slightly higher than their share of total employment (47%) and which suggests that not only is the gap in wages shrinking, but the roles of women have increased in business.
While these reports undoubtedly will do little to quell the debate regarding gender roles in the workplace, they should at the very least highlight the progress made by women in business. As experts suggest wages and positions of gender in business will reach parity by 2020, the aforementioned studies show there is still a bit of work to be done to reach equality.
What are some of your observations in the workplace in relation to roles, wages and power? And for you small business owners, what have you done or think you can do to combat these gaps?
MIT Economics: “Wayward Sons: The Emerging Gender Gap in Labor Markets and Education”
Institute for Women’s Policy Research: “The Gender Wage Gap by Occupation”
Institute for Women’s Policy Research: “Still a Man’s Labor Market: The Long-Term Earnings Gap”
U.S. Bureau of Labor Statistics: “Women in the Labor Force: A Databook”
U.S. Bureau of Labor Statistics: “Highlights of Women’s Earnings in 2011”