Why You Might Make Less Than Coworkers

Perspectives
Sep 15, 2011
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2 Min Read

You might be equal to the colleague in the next office over and still make less money.  Here’s one reason – your gender.

One of my readers just shared a horrible story.  She works in a major accounting firm, and found out – definitively – that she’s making 20 percent less than her colleagues of the male persuasion.  “Women are relatively new to the accounting world, and there is a perception that management shouldn’t invest in people who are just going to have babies and leave,” she told me.  “The thing is, I don’t think my situation is that unusual – it’s still an old boys’ club.”

In a 2010 article for Harvard Business Review, Investigating the Pay Gap, Sarah Green says that the median salary of a woman is still only 78 percent of a man’s. This means that women have to work 16 months to earn what men make in a year.

Woe to New College Grads

According to the American Association of University Women, the gap between men’s and women’s salaries starts immediately after entering the workforce.  Just one year out of school, a woman earns 80 percent of what a man earns.  After controlling for industry, type of job, prior experience, and other characteristics, this gap closes to 95 percent.  The unexplained five percent gap is viewed as evidence of bias.  After 10 years, the average woman earns only 69 percent of what the average man earns, and the unexplained gap has widened from five percent to 12 percent.

Level and Age Don't Help

Also as reported in the HBR article, The Center for American Progress went a step further and tracked wage gaps by age and occupation.  The organization found that by the end of their careers, male managers have made $635K more than their female peers.  Apparently, wage discrimination doesn’t get better as you get older, more seasoned, or better educated – it gets worse.  If you’re female, no matter how well you perform, your raise simply might not be as high as your male colleague’s.

Has anyone heard of a good strategy to combat wage discrimination based on gender?  I’d love to hear and share.

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