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AMERICA HAS A GENDER AND RACIAL PAY GAP THAT JUST WON’T GO AWAY

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The gender pay gap in the US hasn't changed much in 20 years.

Photographer: Michael Nagle/Bloomberg

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By Claire Suddath
September 5, 2024 at 10:00 PM GMT+2
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Claire Suddath is a senior writer for Bloomberg News’ Equality team. She covers
topics ranging from women in the workplace to race and equity initiatives. You
can subscribe here, and share feedback with me here.

Hello, and welcome back to the Equality newsletter. This week I’ll take a look
at what the Bureau of Labor Statistics has to say about the gender and racial
pay gap. But first...

 * Do you earn more than $1 million annually? Congrats! Kamala Harris wants your
   capital gains tax to be 28%
 * Princeton, Yale see dip in share of Asian-American freshmen
 * America’s immigration courts are failing


GETTING PAID

Last week, the Bureau of Labor Statistics released its annual analysis of
women’s and men’s earnings and the news is — well, about the same as last year.
And the year before that. And the year before that. In fact, the gender pay gap
hasn’t changed more than a couple percentage points here or there in 20 years.

BloombergEqualityFrom Housing to Immigration, Key Ballot Initiatives and Local
Races to FollowSupreme Court to Weigh Race-Based Voting Lines After
ElectionStarmer Urges World to Treat People Smugglers Like TerroristsAn
Immigrant Workforce Thrives in Georgia’s MAGA Heartland

So why mention it at all? Because the lack of change is its own story. Let’s
dive in.



One quick note before we begin: The information provided below is limited to
full-time, salaried employees. The BLS notes that women are more than twice as
likely as men to work part-time (often citing child care or family obligations
as the reason) and therefore make less money, but those people are excluded from
this analysis.

The Gender Pay Gap

When the Bureau of Labor Statistics first analyzed the difference between men’s
and women’s earnings in 1979, women made 62% of what men did. By 2003, that
figure had risen to just under 80%. And then things more or less stagnated for
20 years. In 2023, women made nearly 84% of what men did.

Interestingly, this slight narrowing in the pay gap may not be entirely due to
an increase in women’s employment opportunities or salaries but rather the fact
that men’s inflation-adjusted earnings have actually declined since the 1970s.

The 84% statistic is just the big picture number, of course. When earnings data
is further analyzed according to age, race, and occupation, a more nuanced
picture emerges.



The Age Gap

When men and women are younger — and therefore likely to be just starting out in
their careers — the gender pay gap is quite small. Up until age 24, women make
94% of what men their age do. By the time they’re 35, however, the gap has
widened to 83%. With each passing decade it keeps widening. By age 55, women are
making just 77% of what men their age do.

A lot of this difference in earnings can be attributed to what’s called
occupational sorting, or the fact that men and women tend to be clustered into
different fields. For example, truck driving is the most common occupation for
men — 4% of all full-time male workers in the US are truck drivers. The second
most common job is “engineer.”

Truckers don’t make much money but engineers do, earning as much as $2,300 a
week, depending on their specialty. Of the three most common jobs for women —
teacher, nurse and customer service representative — nursing pays the best, but
at $1,400 a week, it’s still wildly below an engineer’s salary.



The Job-to-Job Gap



Even within occupations, men and women make different amounts of money.

Male CEOs make just under $3,000 a week while female CEOs make $2,500. In other
words, female CEOs make 84% of what male CEOs make. And again, this is just for
CEOs of business or finance companies.

This pay gap holds true down the line: male lawyers make more than female
lawyers; male police officers make more than female police officers; even male
fast food workers make more than female fast food workers.

The BLS does not offer an explanation for this difference. It isn’t hours
worked, since only full-time employees are counted here. And it’s not education,
since presumably male and female lawyers have both graduated from law school and
passed their bar exams. Something else must be going on.

The Racial Pay Gap

According to the BLS, Asian men are the highest earning racial demographic in
the US, with an average salary of $1,600 per week. Because of this, they’re used
as the standard by which other races are compared. White men earn about 75% of
what Asian men do. Black men and and Hispanic men earn 59% and 56%,
respectively. Again, within each race or ethnicity, women earn less than men.

The gender pay gap is the smallest among Black people, with Black women earning
92% of what Black men do. Asian men and women have the largest gender pay gap,
with Asian women earning 79% of what Asian men do.

The Educational Pay Gap

Unsurprisingly, people with a college degree earn more than people with only a
high school diploma. That said, the difference in income is pretty profound.
People with a high school diploma earn just 56% of what people with a bachelor’s
degree do.

Because of occupational sorting, the educational pay gap affects men and women
differently. I mentioned the decline in male earnings earlier—according to BLS,
almost all of that decline is due to lower wages in jobs that don’t require a
college degree, such as truck driving and manufacturing.



The Parental Pay Gap

One third of full-time workers in the US are parents. Fathers of children under
the age of 18 averaged about $1,400 a week while mothers of kids the same age
made about $1,000. In other words, full-time working mothers made 71% of
full-time working fathers.

What does this tell us?

Education may be the single most important factor determining someone’s earning
potential. According to the BLS, the average salary for someone with a college
degree is also the average salary for “management, business, or financial
occupations,” all jobs that — you guessed it — require a college degree. The
average salary for someone who didn’t graduate high school was less than half
that, just $700 a week, essentially the same as a male fast food worker.

In the US, a child’s access to education is highly dependent on their family’s
income level, which in turn is stratified by race. According to a 2019 report by
researchers at UCLA’s Civil Rights Project, since the 1990s, both racial and
economic segregation in US public schools has been increasing instead of
falling.

Black and Latino people make up 14% and 19% of the US population, respectively,
but the average Black or Latino child attends a school where at least two-thirds
of students are also Black and Latino. Many of these schools also have a
majority of students who come from low-income families — a figure that is
rising. “The reality in our schools is that segregation by race usually means
segregation by concentrated poverty as well,” UCLA’s researchers noted.
According to the US Census Bureau, only 28% of Black people and 20% of Latinos
have college degrees.

On top of this, women of all races and educational levels earn less than their
male counterparts. This is partly due to the fact that women tend to be
clustered into lower-paying jobs. But this occupational sorting, as it’s often
called, doesn’t explain why men and women holding the same jobs are paid
differently, why the pay gap widens as men and women age, nor why mothers make
less than fathers.

In other words, the gender pay gap is real and it’s not going away any time
soon.


BY THE NUMBERS

 * $9.5 trillion
   The amount of wealth ultra-rich families are forecast to accumulate by 2030


NEW VOICES

“I don’t think its necessarily a bad thing that we’re starting to look at these
policies and examine them more deeply.”
Amber Fairbanks
Portfolio manager at Impax Asset Management on corporate America's retreat from
diversity, equity and inclusion efforts.
Bloomberg News supports amplifying the voices of women and other
under-represented executives across our media platforms.


— With assistance from Simone Foxman

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