Powered by Smartsupp
START SAVING NOW SIGN IN

The Wage Gap Starts Early: Here’s How to Combat It

By Elizabeth Whalen

  • PUBLISHED March 21
  • |
  • 7 MINUTE READ

We know that on average, women earn about 83 cents for every dollar men earn—but new data from The Wall Street Journal shows that the male-female pay gap emerges earlier than we may have previously thought.

The study looked at more than 11,000 degree programs at 2,000 universities, comparing male and female graduates that had the same degree from the same school. In nearly half of the programs studied, male graduates were earning at least 10% more than female graduates within just three years of graduation.

The pay gap has long-term consequences for women’s financial security. Because women earn less, they have only 70% of the retirement income men do, in part because they receive less money in Social Security benefits and pensions. And the pay gap is even larger for Black women, who earn about 63% of what white men earn, and Hispanic women, who make 55% of what white men earn. 

The Reality of the Male-Female Pay Gap 

What does the pay gap look like in the workplace? Just ask Nadia De Ala, founder of Real You Leadership, a coaching and consulting firm dedicated to closing the pay, leadership and opportunity gaps that women face.

While working in technology sales, De Ala discovered a white male counterpart whom she helped hire was earning $20,000 more than she was. “I found out offhandedly,” De Ala said. “He was complaining about how the dollar amount he was making wasn’t enough.”

Maggie Roju also witnessed the pay gap, and its early emergence, up close. Roju, who worked in human resources for more than a decade across multiple industries, witnessed one woman in her early 20s discover that a male counterpart was doing the same work and earning more. The woman asked for a raise, but her manager said it wasn’t possible at the time.

What Causes the Gender Wage Gap to Start Early?

This new Wall Street Journal data reveals striking differences in pay that span industries and areas of study.

For example, the median pay for male graduates of Yale University’s economics program was 63% higher than for women. Among graduates of the nursing program at the University of Portland, median pay for men was 23% higher than for women. And male graduates of the culinary arts program at The Art Institute of Houston made 31% more than women graduates.

Multiple factors contribute to the fact that women typically earn less than men, including the motherhood penalty—whereby women with children are less likely to be hired and more likely to be paid less when they are hired—the pattern of some women emphasizing fulfillment over pay when choosing a job, and the tendency of women to avoid negotiating.

Solutions to the Gender Pay Gap

Closing the pay gap will likely take time, but everyone can help accelerate the process.

Roju, who now runs communications consulting firm Black Augment, recommends women negotiate at every stage of their careers by first researching salaries online and then taking emotion out of the conversation. “Approach the conversation as if you’re negotiating for a friend or a loved one—someone you want the best for. That helps you leave behind imposter syndrome.”

“Any work experience can be used as leverage,” adds De Ala. For entry-level roles, women can use volunteer, internship or student project experience as evidence of their abilities. Men also need to help by connecting women to their professional networks, advocating for women’s voices in the workplace and acting as mentors, she said.

Male leaders play a crucial role in closing the pay gap and can help by ensuring they are considering women in all conversations about promotions and raises, Roju said.

Company leaders should also think long term, Roju added. When the woman Roju knew didn’t get a raise to close the pay gap, she found a higher-paying job at another company. On her way out, she told a female colleague what the man was making. Soon, the second woman also asked for a raise and was denied, and she left for the company the first woman had gone to. On her way out, she told a female colleague about what the man was making.

The cycle repeated itself over the course of about six months. “Over time, about 80% of the women on this team left to go to the other company,” Roju said. “The first woman was getting referral bonuses from the new company, and the company she left behind had to spend money to advertise, recruit, interview and train new employees.” That money would have, of course, been better spent retaining current talent.

De Ala closed the pay gap she discovered gradually. “I kept managing up. I asked, ‘What do you need to see from me in the next three to six months for you to see that I am at that next level?’ By the time I got to my performance review, I had three slides that showed my value. I was going to ask for a 15% raise, but my manager gave me a promoted title—which I wasn’t even asking for—and a 20% increase in pay.”

Closing the pay gap is key to ensuring a bright financial future for women, and so is smart money management. High yield savings accounts, money market accounts and certificates of deposit all offer ways to make the most of all you earn—but the work needs to be done first to ensure you’re earning what you’re worth. 

 

Elizabeth Whalen is a freelance writer based in Seattle. She loves writing about business, financial services and sustainability.

Illustration by Jack Hudson

 

LEARN MORE: RVC Savings Products