Thursday, June 13, 2013

Young Women and the Pay Gap: Better or Worse?

On Monday, we commemorated the 50th anniversary of the Equal Pay Act.  The wage gap research has interesting data about young women. According to a 2010 report from the Department of Labor, women under 35 who work full time earn around 90 percent of what their male counterparts earn. Yet women over age 35 earn only about 75 percent compared to their male peers. Nonetheless, according to research from Catherine Hill at the American Association of University Women (AAUW), young women fresh out of college experience a 7 percent wage gap compared to their male peers at their first job.

Single, childless, women under the age of 30 as a group actually earn more than their male counterparts. According to a 2010 study by Reach Advisors, this group of women earns 8 percent higher than their male counterparts. A main reason to explain this reverse wage gap is that more women from this age group are going to college than men.  Sadly, this group of women is the only female demographic to experience a pay advantage.  Reach Advisors found that this early advantage disappears when women have children.

Where you live and work plays a factor in the gender pay gap.  In a 2013 Gallup study, women in the District of Columbia experienced the smallest wage gap compared in the United States. In the District of Columbia in 2011, women earned 90% of what men earned.  Comparatively, in Wyoming, women earned only 67% of their male counterparts'. 

However, we find disappointing data when we examine the the wage gap between men and women graduating from top MBA programs. In 2002, women at the top 30 MBA programs earned 98 percent of what their male peers earned.  In 2004, this figure fell to 94.1 percent and never really went up from then.  In 2012, women were earning 93.2 percent. Moreover, in 2010, research from Catalyst found that women MBAs were being paid $4,600 less in their first job than men.  This disparity grows to around $30,000 by mid-career.

So what does this all mean? Do we need to stop worrying about the pay gap since younger women seem to be doing better than previous generations? I think it's too early to call.  Discrimination is the work place is still rampant, family responsibilities still mainly fall to women, and legislation in the United States lags far behind other countries in terms of work-life balance policies. Women need to learn more about salary negotiation and actively practice it. We need to advocate for better maternity, paternity, and paid sick leave laws. Young women have a crucial role to play in eliminating our own pay gap. 

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