Mar 13, 2019

Taking Steps Toward Closing the Gender Pay Gap in 2019

The number of women in the workforce has quadrupled over the past 70 years, and women now represent almost 47% of Americans working today, a number that has held pretty steady since the 1990s, according to the United States Bureau of Labor.  

However, there remains a wide and consistent difference in what the average man and average woman see printed on their paychecks. In 2017, the median annual pay of all American women working full-time and year-round was 80% compared to men, noted the American Association of University Women (AAUW).

Closing the gender pay gap is a personal, political, and business issue. Some 60% of Americans believe the pay gap is due to sexism or unconscious bias, according to a survey by the nonprofit group Lean In. Only 5% of those surveyed attributed the pay gap to the idea that women don’t work as hard or aren’t as educated as men, and only 16% of Americans believe companies are succeeding in closing the gender pay gap.

Dealing with this stubborn and discriminatory issue will most likely require the efforts of voters, small businesses, corporations, and the government.  

Raising Minimum Wages

One of the simplest ways to start to close the gender pay gap is to raise minimum wages, although it may not be what some small business owners want to hear.

The National Employment Law Project (NELP) reported in 2016 that 42% of American workers earned less than $15 per hour, a figure that many advocates believe should be the new national minimum wage.  This share of the workforce includes a disproportionate amount of women.

According to NELP, women account for almost 55% of American workers making less than $15 per hour even though women make up 47% of the overall workforce. People of color are also overrepresented in this group, and women of color are impacted especially.

“A $15 minimum wage could make significant inroads in helping women and people of color make ends meet, closing persistent gender and race-based pay and wealth gaps, and improving educational and health prospects for children,” NELP said in the report.

Even if it isn’t an increase to $15 per hour, any increase of the minimum wage would be a step toward closing the gender pay gap. As of early 2019, the federal minimum wage stands at $7.25 per hour, a figure that hasn’t increased since 2009. In 20 states, this amount is still the minimum wage.

The federal minimum wage for tipped workers is just $2.13 per hour, a figure that hasn’t budged in nearly 30 years. The National Women’s Law Center reports that almost 75% of workers earning this wage are women.

In January, Democrats in Congress reintroduced bills in both the House and the Senate aimed at raising the minimum wage to $8.55 in 2019 and increasing it incrementally to $15 in 2024. After that, the bill would tie the minimum wage to inflation patterns as well as phase out the tipped minimum wage.

Standardizing Wages

For businesses, one step toward closing the gender pay gap is to standardized wages and raises. In a recent report published in Harvard Business Review, researchers noted that managers should articulate defined priorities for closing the gap.  

“Based on what we’ve heard from companies, these priorities may be things like minimizing the overall increase in the wage bill, capping raises to individual employees in percentage terms, maintaining pay differences across job categories to reflect different job responsibilities and to incentivize good performance, avoiding large discrepancies with the external job market, and paying women fairly in the context of your firm,” the researchers explained in their report.

Of course, standardizing pay in such a way is also a step toward undoing additional forms of discrimination based on race or other factors.

Encourage Women to Negotiate and Discuss Salary with Coworkers

There is a business culture aspect to closing the gender pay gap, and this challenge might prove the most difficult to confront as a society at large.

Research shows that most Americans expect women to be nurturing and collaborative, Lean In explains. The dark side of this expectation is that women who advocate for themselves, including pushing for higher pay, can be seen as threatening. The fear of social pushback can be stifling, which is why women may not seek the pay they believe they deserve.

“Women who negotiate are more likely than men who do to receive feedback that they are ‘intimidating,’ ‘too aggressive,’ or ‘bossy,’” Lean In continued in a report.

Another business culture change that can help close the gender gap is to encourage — or at least allow — workers to discuss their salaries amongst themselves. Not only are pay secrecy rules often illegal, but these policies also entrench discriminatory pay structures.

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About the author

Barry Eitel
Barry Eitel has written about business and technology for eight years, including working as a staff writer for Intuit's Small Business Center and as the Business Editor for the Piedmont Post, a weekly newspaper covering the city of Piedmont, California.

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