Women’s paychecks still smaller despite slowly shrinking gender wage gap

Although the wage gap between men and women has narrowed slightly in recent years, the difference between a woman’s paycheck and a man’s is still significant. The ratio of women’s to men’s median weekly earnings (full-time wage and salary workers) in 2010 was 81.2.  That means that a woman who earns a weekly wage that is statistically in the middle of all weekly wages earned 81.2% of what the same statistical middle-of-the-road male earned last year. The median weekly earnings for a female were $669, while a male earned $824.

This frequently cited measure of gender wage inequality has generally been moving in a positive direction for decades.  In 1980, the ratio was 64.2 – a gap nearly 20 points larger than in 2010. In 2009, the measure was 80.3, slightly less than in 2010.

Source: Bureau of Labor Statistics, Current Population Survey, Highlights of Women’s Earnings in 2010, released July 2011.

According to the Institute for Women’s Policy Research, there are several explanations for the recent gains made to the wage gap, including the economic downturn:

“During recessions the gender wage gap typically narrows because bonus and overtime payments, which on average account for a larger share of male than female earnings, are cut back. In real terms, women’s median weekly earnings did not increase during 2010; men’s median weekly earnings decreased by just under one percent.”

While this ratio can be used as a general yardstick for measuring wage inequality, it is important to note that it does not consider differences in the distribution among women and men with respect to educational attainment, prior work experience, parental status, geography, occupation, industry, etc. Unfortunately, even when taking these characteristics into account, most studies find that only part of the wage gap can be explained by human capital factors and patterns of employment.  That means that at least some part of the wage gap is likely due to structural gender discrimination.

A recent study by Georgetown’s Center on Education and the Workforce found that, when you look at earnings over a lifetime, women who have attained a PhD make as much as a man with a Bachelor’s degree. Men that have completed some college but have no degree on average make the same as women with a completed college degree over the course of lifetime.  

In fact, the study finds, when women and men with the same level of education are compared, women earn about a quarter less than men.  Translated into dollars, women who earn a Bachelor’s degree make over $650,000 less than men with the same level of education. The gender gap is even more pronounced for those with Professional degrees: men earn about a million dollars more over a lifetime than women with these degrees.

This graphic from the Georgetown study tells the story well:

State-By-State Analysis

The gender wage gap varies significantly across states, from a low of 68.8 to a high of 91.3. West Virginia has the largest wage gap, with a ratio of 68.8, followed by Wyoming at 69.1 and Louisiana at 69.8.  Delaware has the most equitable pay between the genders, with a ratio of 91.3, followed by California at 88.9 and Arizona at 87. Western and Southern states, on average, have the largest gender wage gaps, while Eastern states have the smallest gaps. 


Source: Bureau of Labor Statistics, Current Population Survey, Highlights of Women’s Earnings in 2010, released July 2011.