Career interruptions negatively affect pay. Who knew?
It's spring, and so it's time for my annual rant against media coverage and political pronouncements about the "gender pay gap." You can read my past rants here, here, here, and here.
In a nutshell, my grievances are as follows:
1) The "77-cents-on-the-dollar" figure is accurate (well, not really - it's 77.9 percent now) but very misleading because it compares all men in the work force with all women in the work force. It doesn't control for job held, educational level, seniority, industry, years of employment, or anything else.
2) The punditry and pontifications on the "77-cents-on-the-dollar" figure almost always reflexively conclude that the pay gap is a result of discrimination. The many non-discriminatory factors that may affect pay (see #1) are barely acknowledged, assuming they are mentioned at all.
But you'll be happy to know that I don't have anything to rant about this time because I found a study -- similar to one conducted by Glassdoor.com a few years ago -- that does some honest reporting about the gender pay gap. This one is by PayScale.com.
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(This is the way I feel after reading an honest report on the gender pay gap.)
First, I loved that the study clearly distinguished between the "raw," or "uncontrolled," pay gap (the 77-cents-on-the-dollar figure) and the "controlled" pay gap. The latter is what's left of the pay gap after you control for position held, time on the job, education, relevant work experience elsewhere, and all that stuff.
The bad news is that there is still a pay gap between men and women, even after these other variables are taken into account. But the good news is that what's left of the gap is small -- instead of 77 cents on the dollar, women generally earn 97.8 cents for every dollar that similarly situated men earn.
The 2018 PayScale study focused on the effect of career interruptions on pay. Not surprisingly, women are statistically more likely than men to take breaks in their careers -- usually to take care of their children, and sometimes to perform other caregiver roles. The study found that when men take breaks, it's usually to get more education and training. (It appeared that men were more likely to be unemployed because they got fired, too.)
The study found that men and women start out their careers in roughly the same types of jobs. But as they age, men are more likely to advance:
“By mid-career (age range 30-44), men are 70 percent more likely to be in VP or C-suite roles than women. By late career (age 45+), men are more 142 percent more [sic] likely to be in these higher paying roles.
Meanwhile, women over age 30 are more likely than men to stay in "individual contributor" roles, and that continues through the work lives of women. And at higher levels, the wage gap widens, even among similarly situated men and women. Women in "individual contributor" positions earn about 98.3 cents for every dollar earned by men in those positions. At the executive level, women earn about 94.4 cents for every dollar earned by their male counterparts. And, of course, there are significantly fewer women in executive roles.
Could some of that be a result of women taking more time off during their careers, slowing their advancement? Probably. According to Bureau of Labor Statistics figures cited by the study, men are 11.5 percent "more likely to participate in the labor market than women." And the biggest difference in male-female participation occurs during the prime childbearing and child-rearing ages of 30-44. Women in this age range are 10 percent more likely than men to be unemployed for more than a year.
The study found that interruptions of more than a year had the most negative effect on compensation. Duh.
Pay gap by industry and education
First, it's nice to see that even in the worst, most "gappy," industry -- Transportation & Warehousing -- women earn 96 cents for every dollar earned by a similarly situated man. The much-maligned tech industry was the least gappy of them all: women in tech earn 99.5 cents for every dollar earned by their similarly situated male counterparts.
In comparing men and women at different educational levels, MBAs were the worst (I have no idea why), with women earning 96.4 cents on the dollar compared with men. Law was barely better (women earned 96.7 cents per male dollar). The gap was identical for women without high school diplomas and women with Ph.Ds. Go figure. And both of those groups did better than female MBAs and lawyers. The smallest wage gap by educational level was for women with bachelor's degrees. They earned 98.2 cents per male dollar.
Wage gap by state
The study did not specify the wage gap in every state, but it did name some winners and losers. Women did the very best in Connecticut, where they actually make $1.005 for every dollar earned by similarly situated men. The gap was virtually zero in Alaska, the District of Columbia, New Mexico, Oregon, Rhode Island, and Vermont.
The "gappiest"states were Louisiana and Alabama, but even in those states women earned 94.4 cents and 94.9 cents, respectively, for every dollar earned by similarly situated men.
Next time, I would like to see a study dig into the effect of deliberately choosing a more laid-back career. I suspect that, even after returning to the work force, many women choose to stay in "individual contributor" roles, so that they will have more time for family responsibilities. If I'm right, then that would be a non-discriminatory explanation for another part of the wage gap.
In any event, things aren't perfect, but they're a lot better than you might think.