THE STATE OF
THE GENDER PAY GAP 2018

The State Of
The Gender Pay Gap In 2018

How big is the gender pay gap, and how does it increase as workers climb the corporate ladder?
New this year, we explored how career disruptions – or taking time off from the workforce – impact wages for women and men.

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The gender pay gap persists

Women earn 77.9 cents
for every dollar earned by men.

In other words, the median salary for women is roughly 22 percent lower than the median salary for men into 2018. This is a slight improvement from 2016, when the median salary for women was roughly 24 percent lower than the median salary for men.

What about the pay gap once all compensable factors such as experience, industry and job level are accounted for? It’s still not zero.

In fact, when an equally qualified man and woman do the same job, the woman earns 97.8 cents for every dollar earned by the man. Unfortunately, the uncontrolled pay gap hasn’t changed since our 2016 study.

WOMEN ARE STILL PAID LESS INTO 2018

Uncontrolled
Gender Pay Gap

Comparing all working women to all working men.

Women earn

78¢

for every $1 earned by men

Controlled Gender
Pay Gap

Comparing similar women and men in similar jobs.

Women earn

98¢

for every $1 earned by men

The Opportunity Gap

There are Relatively Few Women at the Top

Our data show that at the start of their careers, men and women tend to work at similar job levels, most often entering the workforce at the individual contributor level: 72 percent of men and 74 percent of women in the age group 20-29 are in individual contributor roles.

This figure represents the uncontrolled –or “raw” — gender pay gap, which looks at the median salary for all men and women regardless of job type or worker seniority.

Over the course of their career, men move into higher level roles at significantly higher rates than women. By mid-career, men are 70 percent more likely to be in executive roles than women. By late career, men are 142 percent more likely to be in VP or C-suite roles.

On the flip side, women are more likely than men to remain in individual contributor positions over the course of their careers. By mid career, 60 percent of women are in individual contributor positions vs. 52 percent of men. By late career, 59 percent of women are in still individual contributor positions vs. 43 percent of men.

Women Are Poorly Represented at Higher Levels of The Talent Pipeline

What’s more, the gender pay gap only grows for women who manage to rise to the highest levels of career achievement. While the controlled gender wage gap starts at 98.3 cents for individual contributors, it widens to 94.4 cents for executives. In other words, pay equity is not the only issue facing women as they advance in their careers.

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Get ideas to combat the gender pay gap

Get all the details and suggested action items in the full Gender Pay Gap report.

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Career Disruption Impacts Wage

An Explanation for Why the Gender Pay Gap Exists.

In a new analysis, we uncovered how periods of unemployment, or career disruptions, play into the gender pay gap.

Between November 2017 and February 2018, PayScale surveyed 46,000 respondents who at the time were evaluating new job offers. We asked respondents several questions related to their current employment status. For those who reported they were unemployed, we asked them about the length of their unemployment, and the primary reason they took time away from work.

Unemployment = Wage Penalty

We found that on average and controlling for relevant factors, those who were unemployed at the time of receiving a job offer make 4.0 percent less than someone who has not recently had a career disruption.

The unemployment penalty varies with the amount of time away from work: those unemployed for longer periods face larger penalties when they return to the workforce. For example, someone unemployed for less than three months faces only a 3.4 percent penalty while someone who has not worked in over a year experiences a 7.3 percent penalty.

Career disruptions lower earnings: The longer the gap in unemployment, the greater the penalty

The Unemployment penalty is harder on women.

We found that on average and controlling for relevant factors, those who were unemployed at the time of receiving a job offer make 4.0 percent less than someone who has not recently had a career disruption.

The unemployment penalty varies with the amount of time away from work: those unemployed for longer periods face larger penalties when they return to the workforce. For example, someone unemployed for less than three months faces only a 3.4 percent penalty while someone who has not worked in over a year experiences a 7.3 percent penalty.

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Particularly during child rearing years, gaps in employment are longer for women than for men

Since women are more likely than men to take breaks from working, and their breaks are more likely to last longer than a year, they are particularly hurt by the unemployment penalty, which is reflected in the gender pay gap.

Women Leave the Workforce

to Care for Others at Higher Rates Than Men.

Returning women are much more likely to have left the workforce to care for a child than returning men (10 percent versus 2 percent, respectively). For those who have been unemployed for a year or longer, nearly a third of women report that caring for a child was the primary reason for their unemployment, while only 4 percent of men report the same.

Women are also more likely than men to have been unemployed to care for a family member other than a child (5 percent versus 3 percent). Unemployed men, on the other hand, report much higher rates than women of taking time away from work to attend school or receive additional training (28 percent versus 20 percent).

Returning women are much more likely to have left the workforce to care for a child than returning men.

Get all the details, implications and suggested action items in the full report.

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If you're a manager or leader who's concerned there's gender inequity issue at your company, read PayScale's whitepaper, Pay Equity Action Plan: Why Fair and Equal Aren't the Same Thing, which provides some great tips on how employers can solve gender inequity issues.
 

Find out how much you should be paid. Take PayScale's free salary survey.