What Is a Wage Gap?

Wage Gap Explained

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In a perfect world, workers would receive equal pay for equal work. In the real world, however, there often are big disparities in wages between workers of different genders, races, and other characteristics. These differences are called wage gaps.

Overt pay discrimination is against the law. Title VII of the Civil Rights Act, the Equal Pay Act, and the Americans With Disabilities Act prohibit employers from paying different wages to workers based on race, color, religion, sex, national origin, age, or disability. But workers of different protected classes still earn less than their colleagues who don’t belong to the same demographics.

If you experience the effects of one or more wage gaps in your career, the first step is to understand what you’re up against. You then can begin to build strategies to compensate for pay disparities. Here’s what you need to know.

What Is a Wage Gap?

A wage gap is the disparity between two types of workers’ pay. For example, according to the latest figures from the U.S. Bureau of Labor Statistics (BLS), women earn 82 cents for every dollar earned by men, and women of color continue to earn significantly less than White men.

  • Alternate names: pay gap, unequal pay, income inequality

When discussing wage gaps, it’s common to talk about controlled gaps versus uncontrolled ones. A controlled wage gap is the difference between two groups when all other factors are equal. For example, the controlled gender wage gap is the difference between female and male earnings among workers who have similar job titles, work experience, education, and work hours.

Both controlled and uncontrolled wage gaps have stories to tell. In the context of the gender wage gap, the controlled wage gap indicates persistent bias and perhaps even overt discrimination. The uncontrolled wage gap indicates in part the different choices and support systems available to women and men in our culture.

Examples of Wage Gaps: Gender, Race, and More

Wage gaps include disparities in pay between workers of different genders, races, ages, and occupations.

Gender Wage Gap

The gender wage gap stands at 82 cents on the dollar, according to several sources, including the BLS and Payscale. The controlled gender wage gap, which compares the wages of women and men with similar jobs and qualifications, is 98 cents on the dollar, per Payscale.

The much-smaller controlled gender wage gap may seem like good news. However, it’s important to note that women are more likely than men to be primary caregivers of young children, even if they are also breadwinners. BLS data also shows that women are more likely to take unpaid leave than men.

Racial Wage Gap

The BLS reports racial wage gaps across all occupational groups. Latinx and Black workers have much lower wages than White and Asian workers. Pay gaps are especially steep among management and professional occupations; service workers have smaller pay gaps, but also significantly lower earnings.

  • The median weekly earnings of full-time workers in 2020 were $758 for Latinx workers, $794 for Black workers, $1,003 for White workers, and $1,310 for Asian workers.
  • Among workers in management and professional occupations, Asian men earned median weekly pay of $1,883, White men earned $1,599, Latinx men earned $1,316, and Black men earned $1,232.
  • Across all racial and ethnic groups, the women in that group earned less than the men. Only Asian women earned more than some men (less than Asian men, but more than men in other groups). Asian women earned median weekly pay of $1,143, White women earned $905, Black women earned $764, and Latinx women earned $705.

Other Wage Gaps

There are other wage gaps to consider beyond gender and racial pay disparities. These include:

Occupation: Obviously, some occupations pay more than others. These often include jobs that require more education and training or in-demand skills. However, demand isn’t the only thing that determines pay range.

Studies have shown that female-dominated occupations pay less than male ones to the extent that when an occupation becomes male-dominated, it pays more. For example, in the past, computer programming was considered “women’s work” and as a result, was lower paying. Today, many tech jobs are male-dominated and higher paying.

Age: Median earnings peak between 45 and 54 years of age for U.S. workers as a whole. Then, for a variety of reasons including age discrimination, pay declines. Although health, career changes, and other factors may influence these numbers, it’s worth noting that the average retirement age for U.S. workers is 60 to 62 for women and 62 to 64 for men—several years after pay tends to decline.

Many workers are affected by more than one wage gap. For example, a Black woman who works in a male-dominated field may experience racial, gender, and occupational wage gaps.

How To Handle Wage Gaps in the Workplace

Whether you’re dealing with overt discrimination, unconscious bias, or lack of support, the first thing to understand about coping with a wage gap is that it’s not your fault. You did not create the conditions you’re struggling under. Leveling your personal playing field is not simply a matter of learning to negotiate better or standing up for yourself more.

That said, there are things you can do to increase your chances of getting the pay and recognition you deserve.

Be Loyal to Yourself and Your Career

Hopefully, you like your job and the people you work with. But never forget that a company is not a family, and a job is not a career. Look for opportunities to advance your goals, whether that means seeking a promotion or a raise—or taking a new job at another employer.

Build Your Skill Set

Always seek chances to add new skills to your resume, whether it’s taking an online class through your job, getting a certification, or volunteering for a stretch assignment that helps you gain new knowledge.

Give Yourself Options

Have a backup plan for your backup plan. Keep your resume up to date and your professional network strong. If at all possible, keep an emergency fund with a few months of expenses to tide you over in case of a layoff (or in case you need to quit your current job).

When you’re job searching, don’t stop your search after a particularly good interview or job lead. Remember that the more choices you have, the better position you’ll be in—no matter what comes next.

Key Takeaways

  • A wage gap is a disparity in earnings between two groups of workers, e.g., men and women.
  • Different types of wage gaps include the gender wage gap, racial and ethnic wage gaps, and occupational wage gaps.
  • To cope with wage gaps in your career, learn the statistics, be loyal to your career, and stay open to new opportunities.