The Gender Pay Gap Is Real and May Widen When Women Return to Work, Payscale’s Research Explains

• The gender pay gap has not shrunk since last year, with women still earning just $0.82 for every $1 that men make.
• Women who return to the workforce after a period of unemployment experience wider pay gaps, earning only $0.70 compared to men after more than 24 months of unemployment.
• The older women get, the further their earning power declines, with the gender pay gap increasing substantially for women aged 45 and above.

Today, Payscale Inc., the leading provider of compensation data and software, released the results of its annual survey, the 2022 State of the Gender Pay Gap Report (GPGR), in recognition of Equal Pay Day. The report puts a spotlight on how women are paid in comparison to men, with this year’s report also taking a closer look at the intersection of race and pay inequality.

Payscale’s GPGR measures for both the controlled and uncontrolled gender pay gap. The controlled pay gap measures “equal pay for equal work” by examining what women earn compared to men when all compensable factors are accounted for including job level and title, education, years of experience, industry, and hours worked. While the controlled gender pay gap is narrower, with women being paid $0.99 for every $1 men make, the gap should be zero, and the closing of the gap has been ponderously slow. Even more concerning, is the pay disparity revealed in the uncontrolled pay gap, which only accounts for gender and is a better indicator of the types of jobs and the associated earnings occupied by women versus men. In this instance, women earn only $0.82 for every $1 men make.

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“More needs to be done to eliminate the gender pay gap, which is a direct reflection of how women are valued in the workforce compared to men,” said Ruth Thomas, Pay Equity Strategist at Payscale. “Fortunately, employers are finally starting to take pay equity seriously. What’s more, they are thinking beyond just gender and focusing on all unexplainable pay gaps. But with the pressure of rising wage inflation, minimum wage increases, and strong competition for talent, we can expect more pay compression and pay inequity issues to arise. That’s why we believe compensation management technology is critical to provide up-to-date salary data and tools to continuously monitor pay equity.”

While the gender pay gap does appear to be closing, shrinking $0.02 since 2015, it is doing so at a glacial speed and the small amount that it has closed may not be reliable in the current economy. This is due in part to the impacts of COVID-19, which have disproportionately affected women. Women are more likely to leave the workforce as a result of social expectations placed upon them as mothers and caretakers, heightened by the global pandemic. When these women look to reenter the workforce, they are often penalized. Unemployed women also face a disproportionate wage penalty compared to men, suggesting that the gender pay gap could widen again in the future.

Furthermore, women of color can face increased barriers in opportunity as gender and racial biases can intersect to create obstacles to hiring, pay raises, referrals, promotions, and leadership. Native American women experience the widest pay gap when data is uncontrolled at $0.71 compared to every $1 men make and Black women experience the widest gender pay gap when data is controlled for compensable factors, earning only $0.98 compared to every dollar men make. Women are also paid less as they move up the corporate ladder and are less likely to break into executive roles. Similarly, women lose earning power and are paid reduced wages as they age. Not only does the gender pay gap expand for women ages 30 to 44, but women ages 45 in the uncontrolled group are earning only $0.73 compared to men in the same age bracket.

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In addition to exploring the gender pay gap by analyzing race, age, and unemployment during COVID-19, Payscale’s GPGR also examines the widest pay gaps by specific job title, showing the direct impact of lost earnings as a direct result of systemic pay inequity — further illustrating how women are paid less than men for work of equal value in certain occupations.

Despite the work that needs to be done to close the gender pay gap, reassuringly, organizations are doing more than ever to address pay equity. According to Payscale’s recently released Compensation Best Practices Report (CBPR), 66 percent of organizations surveyed said that pay equity analysis is a planned initiative for 2022 — a huge increase from last year. In addition, pay transparency laws being implemented more frequently throughout the U.S. will work to further close the gender pay gap.

“It is encouraging to see states like New York, California, and Connecticut stepping up to ensure employees are paid fairly,” said Lulu Seikaly, Senior Corporate Attorney at Payscale. “Pay equity laws are a step in the right direction to ensure everyone, no matter gender or race, is compensated fairly for similar roles, and that employers will be accountable to measure and report on their pay gaps. We are also seeing a rise in pay transparency laws across the country, which will push pay equity standards even further and improve communications and labor relations with employees.”

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