Gender Pay Gap
The State of the Gender Pay Gap in 2021
The State of the Gender Pay Gap in 2021
New survey data from PayScale reveals how organizations perceive pay equity and what they are doing around diversity, equity, and inclusion (DEI).
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Executive Summary
In observance of Equal Pay Day (March 24, 2021), PayScale has updated our Gender Pay Gap Report for 2021 with additional data on the Racial Wage Gap to fully explore the intersectionality of pay inequity.
Since we have started tracking the gender pay gap, the difference between the earnings of women and men has shrunk, but only by an incremental amount each year. There remains a disparity in how men and women are paid, even when all compensable factors are controlled, meaning that women are still being paid less than men due to no attributable reason other than gender. As our data will show, the gender pay gap is wider for women of color, women at higher job levels, and women in certain occupations and industries.
The economic turmoil fueled by the COVID-19 pandemic and stay-at-home policies has disrupted various occupations and industries, many of them female dominated. In addition, women and people of color have disproportionately faced unemployment throughout this crisis. Women’s labor force participation is at a 33-year low as more women take on caretaker roles at home due to remote schooling. When women do return to the workforce, they may face the unemployment penalty. This penalty refers to the lower wages typically observed when people return to the workforce from unemployment. Because of this, COVID-19 may impact the gender and racial pay gap for years to come.
Our research shows that the uncontrolled gender pay gap, or opportunity pay gap, which takes the ratio of the median earnings of women to men without controlling for various compensable factors, has decreased by $0.08 since 2015. In 2021, women make only $0.82 for every dollar a man makes, which is one cent more than they made in 2020. However, this improvement could be attributable to lower paid women leaving the workforce due to layoffs or family care. The opportunity pay gap measures the barriers women face in attaining the higher paying positions of power that men often hold in society.
The controlled gender pay gap, which controls for job title, years of experience, education, industry, location and other compensable factors, measures equal pay for equal work. The controlled pay gap has also decreased since 2015, but only by $0.01. Women in the controlled group make $0.98 for every $1.00 a man makes, meaning that women are still making less than men even when doing the exact same job.
To illustrate the importance of the gender pay gap in more detailed terms, we also looked at the top 20 jobs with the highest gender pay gap. Here, the controlled gender pay gap increased to as much as $0.78 for positions such as Waiters and Waitresses, showing that the gender pay gap is very real and larger for women in certain occupations – especially in the wake of the COVID-19 recession.
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The State of the Gender Pay Gap in 2021
In 2021, women earn 82 cents for every dollar earned by men.
This figure is representative of the uncontrolled gender pay gap (sometimes referred to as the “opportunity pay gap”), which looks at the median salary for all men and women regardless of job type or employment characteristics. As PayScale’s crowdsourced data weights toward salaried professionals with college degrees, the uncontrolled gender pay gap reported is likely smaller than what occurs in the overall workforce, which includes more lower paid and hourly workers. For analysis by race, we look at only those with at least a bachelor’s degree.
Among our sample, the median salary for men is roughly 18 percent higher than the median salary for women. This figure represents a 1 percent improvement from 2020 and an 8 percent improvement from 2015, when the median salary for men was roughly 26 percent higher than the median salary for women. However, we can’t necessarily take this improvement at face value.
Due to the economic turmoil of COVID-19, women, especially women of color, have disproportionately faced unemployment at higher rates than in typical years. As more women of color, women at lower job levels, or women who are paid less leave the workplace, it may ultimately move the average median pay for women up – slightly closing the gap between men and women’s pay overall. When unemployed women do return to the workforce, they could face a disproportionate wage penalty from being unemployed compared to men, suggesting that the gender pay gap could widen again in subsequent years. Because of the disproportionate impacts of unemployment on women, we must be cautiously optimistic in recognizing this smaller pay gap as an improvement of equitable outcomes for women in the workforce.
What is the gender pay gap once all compensable factors such as experience, industry and job level are accounted for? It’s not zero.
In fact, when men and women with the same employment characteristics do similar jobs, women earn $0.98 for every dollar earned by an equivalent man. In other words, a woman who is doing the same job as a man, with the exact same qualifications as a man is still paid two percent less for no attributable reason. This controlled gender pay gap is the same as last year. The closing of the controlled gender pay gap has slowed in recent years, shrinking by only a fraction of one percent year over year. It has shrunk a total of $0.01 since 2015.
How much do women make compared to men?
Uncontrolled gender pay gap
This “opportunity pay gap” measures median salary for all men and all women.
Controlled gender pay gap
This measures median salary for men and women with the same job and qualifications.
The Gender Pay Gap Over Time
Using PayScale’s compensation data sourced from online profiles
2015201620172018201920202021$0.76$0.78$0.80$0.82$0.84$0.86$0.88$0.90$0.92$0.94$0.96$0.98UncontrolledControlled$0.76$0.98
Uncontrolled Gender Pay Gap (Opportunity Pay Gap):
Measures median salary for all men and all women regardless of job type, seniority, location, industry, years of experience, etc.
Controlled Gender Pay Gap (Equal Pay for Equal Work):
Measures pay for men and women with the same job and qualifications.
Why are women paid less than men?
Why is the uncontrolled pay gap so much larger?
The uncontrolled pay gap is an indicator of how gendered wealth and power is within a society and is driven by many forces. Occupational segregation is one large driver of the overall pay differences between men and women. For example, education and healthcare support are female-dominated occupational groups while architecture & engineering is a male-dominated occupational group. Education occupations have much lower median pay than engineering occupations, which helps explain the large differences we see in average pay for men and women when data are uncontrolled
Occupational segregation can be influenced by gender and racial stereotypes. As an example, women are often perceived as caretakers or bad at math. Such perceptions can lead to a lack of confidence and steer life decisions from a young age. For example, research shows that girls consistently receive undeservedly lower scores in math than boys, which could ultimately serve to discourage them from pursuing STEM careers. Likewise, girls are much more likely to face expectations of caring for children or elders within a family or community. Ultimately, the skills they gain in these areas from an early age could propel them into service-oriented careers such as healthcare support and education workers.
Men and women choosing different careers doesn’t mean that the uncontrolled pay gap is less significant than the controlled pay gap. The uncontrolled pay gap reveals the overall economic power disparity between men and women in society. Even if the controlled pay gap disappeared – meaning women and men with the same qualifications were paid equally – the uncontrolled pay gap could persist if high paying positions were disproportionately accessible to men.
The opportunity gap, which we discuss in more detail below, also explains the uncontrolled pay gap. This measurement is an indicator of the barriers women and people of color face in attaining the same positions of power and prestige as white men. Gender and racial biases can create obstacles to hiring, raises, referrals, promotions, and leadership. Due to the social expectations placed upon women to be mothers and caretakers, women often step out of the workforce and are penalized later on when they return to their careers. The overall differences in women’s and men’s pay and career outcomes goes beyond gender preferences and can only be explained holistically through gender and racial bias.
The state of the racial wage gap in 2021
Uncontrolled observations of the racial wage gap show women of all races and ethnic groups earn less than white men. Men of color generally earn less than white men, but all men out earn the women within their racial ethnic group. American Indian and Alaska Natives see the largest uncontrolled pay gaps relative to white men; women in this group earn $0.69 and men $0.86 for every dollar earned by a white man. Possibly influenced by the COVID-19 recession, this pay gap has worsened by 6 cents from last year for women, when American Indian and Alaska Native women had a pay gap of $0.75.
Equal pay for equal work is not a reality for many people of co
