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Mind the Gap

Jiab Wasserman  |  December 13, 2018

BACK IN 2002, I WAS part of a three-person financial analysis team at a major mortgage lender. I was better qualified than my two male colleagues, thanks to my master’s degree and greater years of experience. Imagine my surprise, then, when I compared my performance review with one of my colleagues. I discovered that, while we both received the same rating, he got a year-end bonus and I didn’t.

Like many women, I was aware of the gender pay gap, but thought of it as an abstract idea. The bonus revelation was like a slap in the face.

My manager and I discussed my salary in general, agreeing that I should be paid more, given my education and experience. But agreement isn’t action. Nothing was done. I felt trapped. Back then, I was a single mother and the family’s sole breadwinner. If I made an issue of my compensation, would I be seen as a troublemaker and would there be repercussions? Would I be better off starting over at another company—and would the situation be better elsewhere?

I felt powerless, forced to wait for my compensation to be adjusted. It never happened. After a year and a half, I decided to look for another job and was fortunate to find an opening in a different department.

Chances are, if you are a woman reading this, you’ve faced similar situations where you’ve felt discounted and yet trapped. It’s also likely that, as with me, it wasn’t a onetime event, but a scenario that repeated itself throughout your career.

When you’re a woman, you automatically inherit social and financial disadvantages in our “equal” society. No matter how you slice and dice the data, the gender pay gap is real and persistent. In 2017 in the U.S., a woman, on average, earned 80% of a white male’s income.

The gap is so institutionalized that salaries adjust depending on whether an occupation is seen as a “male job” or a “female job.” Researchers reviewing data from 1950 to 2000 found that when occupations change from male-dominated to female-dominated, average pay drops, even for the men. But when men enter an occupation, pay increases, even for women in that occupation.

The gender pay gap exists across all demographics, in every age group, in all states, in high- and low-paying occupations, and for those with and without advanced degrees. It exists in nearly every line of work, including female-dominated professions like teaching and nursing. The gap is even greater for many women of color: Latina women earn 53% of a comparable white male’s earnings. Asian women fare better, but are still at just 85%.

Women start off with this disadvantage as soon as they enter the workforce, and it grows exponentially throughout their careers. The compounding effect of the pay gap makes it harder for women to get out of poverty. It also makes it harder to pay off student loans.

Women experience the negative effects of the pay gap from their very first paycheck to their very last Social Security check. They often need a bigger retirement nest egg, thanks to their longer life expectancy. Yet the career wage gap makes it harder for women to save as much as men do.

Result? Women retire with two-thirds of the money men have, and receive less from Social Security and pensions. White men over 65 have average annual income from Social Security, pension and other sources of $44,000, while white and black women over 65 get by on $23,000 and $21,000, respectively, and Latinas on $15,000. The upshot: Women are 80% more likely to be impoverished in retirement.

Jiab Wasserman recently retired at age 53 from her job as a financial analyst at a large bank. She and her husband, a retired high school teacher, currently live in Granada, Spain, and blog about financial and other aspects of retirement—as well as about relocating to another country—at YourThirdLife.com. Her previous blogs for HumbleDollar were Taking Their MoneyWhy Wait and Won in Translation.

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YalieNE
YalieNE
2 years ago

Men work more than do women – no discussion of this fact in this opinion piece.

Jim Wasserman
Jim Wasserman
2 years ago
Reply to  YalieNE

I’m not sure of your point. The article is about equal pay for equal work. She is not saying pay someone the same for less work. If you are asserting quality of work, then pray what is your study that supports this “fact?”

YalieNE
YalieNE
2 years ago
Reply to  Jim Wasserman

Men have more work experience period and work more.

David Baese
David Baese
2 years ago

Look at it this way guys…if our wives had been fairly compensated we could have worked less and retired earlier.
Dave

Jiab Wasserman
Jiab Wasserman
2 years ago
Reply to  David Baese

Exactly. Considering that 50% of American household are dual income. That means women not receiving their financial due negatively impact families and puts pressure on men to earn more.

David Baese
David Baese
2 years ago
Reply to  Jiab Wasserman

Jiab,
I’m always surprised when someone agrees with me, especially when that individual is smart enough to retire at age 53 and live in Grenada, Spain. The fact that you’re able to do that tells me that life hasn’t treated you badly on the grand scale of things. Have you considered the impact of retiring at age 53 on your future Social Security benefits?
Dave

Kristine Hayes
Kristine Hayes
2 years ago

As a woman, I suppose I should be pumping my fist and proclaiming “Equal pay for equal work!” But, from some of the studies I’ve seen, the issue is that they often compare average salaries across ALL occupations. A lot of higher paying jobs/careers are, at this point, often dominated by men. This page (https://flowingdata.com/2017/09/11/most-female-and-male-occupations-since-1950/) shows some interesting data as far as percent of men and women employed in various fields. The construction industry is dominated by men. Early childhood education is dominated by women. Do those two fields pay ‘equally’? Likely not. The construction industry generally pays higher wages. But would a woman who signed up to be an electrical apprentice, at the same time a man did, be paid the same? Yes, at least where I live. There isn’t a separate pay scale for men and women electricians. Would a wage gap exist if 50% of plumbers and mechanics were women and 50% of preschool teachers and hair stylists were men? Perhaps, but we may never know.

parkslope
parkslope
2 years ago
Reply to  Kristine Hayes

Although pay discrimination clearly exists, you are correct that most of the gender pay gap is due to 1) gendered job segregation, and 2) men working longer hours. Labor economists have concluded that this accounts for all but a small difference in the gender gap. However, that doesn’t change the fact that women are still much more likely to have primary responsibility for child care, which makes it very difficult for them to work as many hours as their male counterparts. Explanations for the pay gap also fail to address the issue of why female dominated jobs pay less than male dominated jobs that require similar levels of skill and education.

Jiab Wasserman
Jiab Wasserman
2 years ago
Reply to  Kristine Hayes

Kristine, thank you for the comment. The study that I use as my source did compare salaries in the same industry between men and women. If you open the Gender Pay Gap link (the 1st link) and go to figure 10, you will see that within the same occupation in the field that woman dominates (nurse, secretary, teacher, accountant, bookkeepers), women still earn less than men. And in the same material, according to US Bureau of Labor Statistics, “Women are not drawn to low-paying fields because they desire low pay; the work that women do is valued less than work done by men because that work is done by women. Men are paid more watching cars (as parking lot attendants) than women are paid watching children (as child care workers), but few would argue that the former is more intrinsically valuable work.”
BTW, I do appreciate exchanging ideas and perspectives. It’s good to be able to discuss this out in the open. Back then when I was younger, I didn’t have the gut to share my experiences for fears of retaliation.

Kristine Hayes
Kristine Hayes
2 years ago
Reply to  Jiab Wasserman

Sorry, but I just don’t agree with the premise that “the work women do is valued less than work done by men because that work is done by women.” I go back to my comparison of electricians and child-care workers. Neither job requires ‘formal’, i.e. college, education. Electricians go through an apprenticeship program (open to anyone–male or female–who wants to apply). According to a ‘Google’ search, child care workers also don’t need any formal education beyond a high school diploma. Average hourly pay for a child care worker? $9.77. Average hourly pay for an electrician? $23.95. Are electricians valued ‘more’ because they are mostly men or because they typically work 10-12 hour days (often in dangerous environments) and in all types of conditions (bad weather, crawling in places most people don’t want to go) and because it’s very physically demanding work that can frequently result in injuries? Over my 30+ years of work, if I felt I wasn’t being compensated ‘fairly’, I simply found another job. Nobody I know has ever been ‘forced’ to stay with a particular employer for their entire working life.

Jonathan
Jonathan
2 years ago

Great article! Your point and argument is sound, and I agree with you!

Glenn neal
Glenn neal
2 years ago

Mind the gap? What exactly is the call to action? There is not some vast male conspiracy to pay women less for the same job.

Research has shown that only a small percentage of the gender pay disparity is explained by discrimination—the rest is explained by factors such as job choice, hours worked, and how often a person exits the workforce. And as for the presumed value of gender pay equity I ask, why would anyone (male or female) go above and beyond expectations in their job if they knew they couldn’t be paid any more than the next person for their effort? That sounds a lot like socialism to me.

Humble Dollar if you want to keep your blog from becoming a political battleground perhaps you could steer clear of this sort of article—it contributes very little to the understanding of personal finance. Besides, you don’t want to take market share from the Huffington Post, do you?

Mik Barbasol
Mik Barbasol
2 years ago

Question…why don’t companies hire and promote more women if they’re paid less than men ??

ishabaka
ishabaka
2 months ago

So, why didn’t you demand the raise you’d been promised, and ensure you’d have another job to move to if you didn’t get the promised raise?

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