Gender pay gaps have long been a difficult reality for working women, and one that remains a challenge for women today. PayScale's most recent Gender Pay Gap Report found that when it comes to closing the gap, women have made very little progress. In fact, in 2021, women overall earned only $0.82 for every dollar a man makes — a $.01 improvement over 2020.
Pay disparity is a complicated economic and political issue, which can be measured using different criteria. To understand the issue, here we assess the current state of the gender wage gap in the United States.
What's the difference between an adjusted and an unadjusted gender pay gap?
There are two main lenses through which pay inequity is reported; an adjusted gender pay gap compares wages for employees who perform similar work and have similar backgrounds, whereas the unadjusted gap compares the salary differences between all men and all women. How are they different?
An unadjusted gender pay gap compares pay levels between men and women, without considering other factors. An adjusted gender pay gap controls for other variables, such as hours worked, choice of occupation, education, job experience, and location.
When factoring in organizational, educational and other differences, research shows that despite progress there is still a gender pay gap in the United States. A 2019 study by Glassdoor indicated that even when using the adjusted gender pay gap model, men still earn almost 5% more than women. In other words, women earn $.95 for every dollar a man earns when controlling for employer, worker and job characteristics.
The gap is often even larger for most women of color, as illustrated by a 2020 report from the Center for American Progress comparing unadjusted pay disparity by race: Where white women generally earn $0.79 for every $1 earned by men, Black women earn $0.62, Hispanic or Latina women earn $0.54 and American Indian or Alaskan Native women earn $0.57. Only Asian women buck this trend, generally earning $0.90 compared to every $1 earned by men, and yet still not at pay equity.
How does the "motherhood penalty" affect pay?
Women of all races also often face a "motherhood penalty," in which earnings decrease after every subsequent child due to child care responsibilities that may keep a woman away from work longer or require more employment flexibility. The pay gap also often increases with age, as does the salary expectation gap — the more experienced women are, the lower their salary expectation, whereas a man's expectation of his earnings is far higher than a woman who has the same level of experience.
Which comparison is more accurate?
There isn't a right way to calculate the true state of the gender wage gap. Which method you use should be determined by which factors you want to consider. Again, the adjusted gender pay gap compares wages for employees who perform similar work and have similar backgrounds, whereas the unadjusted gap compares the salary differences between all men and all women.
For example, an adjusted pay gap would evaluate Sue and Andy, employees who have similar years of job experience and education, doing the same work at the same company. An unadjusted gap for the same company would group all men and all women in their respective gender categories, and if the men at the company tend to dominate executive and high-paid positions (another workplace issue), the pay gap would be much larger.
This can make it seem as if a woman earns far less to the man's dollar when there are actually other variables at play, so the adjusted pay gap is the more accurate measure of whether women at the company are receiving equal pay for equal work.