Pay gap persists in US – but there is hope

Women in the US still earn significantly less than men, even when they work the same number of hours, according to a study released on Thursday by the Center on Education and the Workforce at Georgetown University.

The study also found that the gap in pay cheques persisted across all levels of educational attainment.

Unlike much previous research on this topic, this analysis focused on full-time workers in the same occupations with the same levels of education. (Many studies do not account for the fact that more women work part-time, and that more women tend to work in lower-paying fields.)

Another noteworthy finding is that women with bachelor’s degrees earn about as much as men who have some college education but no degrees. To earn as much as men with bachelor’s degrees, women must obtain a doctoral degree. In other words, a woman needs on average one more degree than a man to make the same amount of money.

The Equal Pay Act, signed into law by former president John F. Kennedy in 1963, makes it illegal to pay women less on the basis of their gender, yet according to the latest census statistics, women in the US earned only 77 cents for each dollar men were paid in 2008. That number falls to 68 per cent for black women and 58 per cent for Latin American women.

I spoke to Tony Carnevale, director of the CEW, and Jamie Merisotis, president and chief executive of the Lumina Foundation, which aims to increase students’ access to college, about this research. (Lumina helped sponsor the study.)

While both agree the fact that women earn far less than men for the same work is inherently unfair, they see signs of hope in the findings.

“It is the best explanation for the significantly higher participation rate of women in education than men,” says Merisotis, referring to data that show that women outnumber men in worldwide university enrolment and graduation rates. “Education is a core mobility strategy for women.”

While “the historic bias still exists”, he says, women’s earnings by education level are steadily increasing at all levels. Men’s earnings are stagnant at the secondary education level, and while they are rising at the post-secondary level and beyond, they are not increasing as fast as women’s.

The solution to fixing the pay gap, says Carnevale, is more education. “For women at the very top of the pyramid, it’s a different [story.] The truth is that once women get graduate degrees, the size of the gap diminishes,” he says.

“But I would also advise women – as I advised my own daughter – to be careful which major [the focus of a bachelor’s degree] they pick and which occupation they’re headed for.

“Women tend to head toward lower-paying majors and jobs, such as counselling, teaching, the arts and nursing – basically, the helping professions with the exception of medical doctors,” he says.

“But we are seeing women today represent 40 per cent of math majors and half of statistics majors. They are also gaining ground in life sciences. This is a good thing.”



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Liz Bolshaw

Liz Bolshaw is a business journalist and editor. She has been a successful book publisher, online editor, magazine editor and publisher.

She was launch editor of the Europe-wide online community Entrepreneur Country, has published magazines for PwC, 3i, dunhill and Bafta, and launched The Sharp Edge, a magazine for and about entrepreneurs, with Duncan Bannatyne. She is a regular contributor to Thomson Reuters’ Venture Capital Journal.

Her last project for the Financial Times was as editor of the paper’s Business Education magazine.

Rebecca Knight

Rebecca Knight is a freelance journalist based in Boston. She writes regularly for the FT on business education, entrepreneurship, and management.

Andrew Hill

Andrew Hill is an associate editor and the management editor of the FT. He was City editor of the FT and editor of the daily Lombard column on British business and finance from September 2006 to December 2010.

He was the FT’s financial editor from June 2005 to September 2006, with overall responsibility for coverage of companies and markets. Before becoming financial editor, he was the FT’s comment & analysis editor, in charge of the paper’s opinion and features pages.

From 1999 to 2003, he was the FT’s New York bureau chief. He joined the FT in 1988 and has also worked as foreign news editor, UK companies reporter and correspondent in Brussels and Milan.

Pino Bethencourt

Pino Bethencourt is a professor and leadership expert at IE Business School in Madrid. She is also an author and executive coach.

Lynda Gratton

Lynda Gratton is professor of management practice at London Business School.

Linda Tarr-Whelan

Linda Tarr-Whelan, former ambassador to the UN commission on the status of women, is a Demos distinguished senior fellow.