Understanding the Gender Pay Gap

You might think you know what the gender pay gap is. But the story you think you know, that women earn 78 cents on the dollar compared to men, doesn't paint a complete picture. PayScale's latest report, Inside the Gender Pay Gap, is here to help you make sense of the truth about women, work, and pay equity. Want to find out how things like job type, leadership positions, marital and family status and industry affect gender pay equity? We've got data that you won't find anywhere else.

Understanding The Gender Pay Gap: Controlled vs. Uncontrolled

If you're reading this article, you've likely heard of the gender pay gap before. And you're probably familiar with the statistic that women earn 78 cents for every dollar a man earns. That shocking, but familiar, figure, gathered from data from the Bureau of Labor Statistics, has been the battle call of pay equity activists since it was first studied more than 30 years ago. This pay gap, which we refer to as the uncontrolled gender pay gap, is calculated by comparing the average earnings of all working men to all working women, this figure shows that there is a deep chasm between the earning power of men and the earning power of women, overall.

That's Just The Beginning

In the vast majority of cases, women with similar qualifications working the same jobs as men are not earning 22 percent less than their male peers. In fact, the problem, and a major cause of pay inequity in general, is that men and women are not doing the same jobs in the first place. Men are simply more likely to hold higher-paying jobs, whether it's because of the industry, job type, or job level.

That's why PayScale also calculates a controlled gender pay gap. Our data scientists applied our proprietary algorithms to more than 1.4 million salary profiles to compare men and women working the same jobs and controlling for factors such as experience, location, hours worked, education, and more to calculate an "apples-to-apples" analysis of pay equity.

Unequal Pay For Equal Work

When comparing like to like, we calculate a controlled gender pay gap of 2.7 percent. (Based on our database, the uncontrolled gender pay gap is 25.6 percent.) That means that women earn 2.7 percent less than men with similar characteristics working the same jobs. Yes, that margin is much smaller than the uncontrolled figure, but it's equally disturbing. Even more disturbing is that when we run the numbers to find out how things like marital and family status, job level, job type, industry, location, education and more affect gender pay equity, we see that the pay gap widens as you climb the corporate ladder, that men get promoted faster than women, and that women report more negative feelings about job satisfaction, job stress, and communication with their employers.

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