The American Association of University Women released a report last week on lingering gender inequities in salary.
According to “Graduating to a Pay Gap,” women one year out of college who were working full time earned, on average, just 82 percent of what their male peers earned.
“After we control for hours, occupation, college major, and other factors associated with pay, the pay gap shrinks but does not disappear. About one-third of the gap cannot be explained by any of the factors commonly understood to affect earnings, indicating that other factors that are more difﬁcult to identify — and likely more difficult to measure—contribute to the pay gap,” the report states.
The report acknowledges the role of college major in determining income. Men are over represented in the higher-paying fields of engineering and computer science, while women continue to dominate in the lower-paying areas of education and the social sciences.
However, the report notes:
But college major is not the full story. One year after graduation, a pay gap exists between women and men who majored in the same ﬁeld. Among business majors, for example, women earned just over $38,000, while men earned just over $45,000. Gender differences in college major only partially explain the pay gap.
When we compare the earnings of men and women who reported working the same number of hours, men earned more than women did. For example, among those who reported working 40 hours per week, women earned 84 percent of what men earned. Among those who reported working 45 hours per week, women’s earnings were 82 percent of men’s.
Finally, when we control for economic sector, again men typically earned more than women did. In the two largest economic sectors—the for-proﬁt and government sectors—men earned signiﬁcantly more than women did one year after college graduation. Occupation, hours worked, and economic sector help us understand the pay gap, but these differences do not fully explain it.
Here is a letter that Linda Hallman, the executive director of the AAUW, wrote to college women graduating this year:
As you enter your senior year and prepare to enter the workforce in the spring, you might want to carve out some time to read a research report released today by the American Association of University Women, which speaks directly to your situation. For women in the class of 2013, your degree puts you in a better place financially compared with women who don’t have college degrees.
Our new research shows, however, that a year from now, you’ll likely make thousands less than the men in your class are making, even when you have the same degree and do the same work.
That the wage gap even exists anymore for millennial women may come as a surprise, given the headlines proclaiming women the richer sex or even “the new men.”
What the AAUW research report, “Graduating to a Pay Gap: The Earnings of Women and Men One Year after College Graduation,” clearly shows is that millennial women will be paid about 82 cents for every dollar paid to men within the first year after college. Throw in college loans, and the situation gets worse. You’ll have less money to live on at the end of every month because a bigger chunk of your smaller paycheck is going to paying down that debt.
There are, nevertheless, ways to address the persistent pay gap and its rippling effects, which include having less money to buy everyday things like groceries and to purchase big-ticket items such as a car or a house. It’s not up to you alone to solve a problem as longstanding and widespread as the pay gap. Employers and government have to do the lion’s share of that work. But there are some things that you can do to minimize its effects on your paycheck.
Know what your skills are worth in the labor market, and choose your first job—and negotiate your first paycheck and benefits—deliberately. Think critically about job offers, and be sure to maximize that first salary, which sets the tone for the rest of your financial life.
Have your college career center send a copy of “Graduating to a Pay Gap” to the employers who recruit on your campus. Employers may not even realize that they have a subtle gender bias that leads them to pay men more. A recent study found that scientists at research-intensive universities offered higher starting salaries to men applying for a lab manager position than to identically qualified women. If these scientists—men and women who have been trained to be objective—still discriminate against women, then many employers likely do as well.
Vote for candidates who support legislation that would help create an environment in which workplace discrimination is not tolerated. It was wonderful to see President Barack Obama and Governor Mitt Romney address this topic in their debates, but we’d love to hear more on the topic of pay equity from both campaigns and from our state officials. AAUW members around the country are working to get everyone to the polls on Nov. 6 to vote in the interest of women and their families. You need to be there—to make sure your voice is heard and your vote is counted.
I’m optimistic about the future for your generation. I hope you will be the ones to close the wage gap. You’re off to a great start with your hard-earned degree, but don’t underestimate yourself or settle for less than you’re worth. I promise that AAUW will be there to support you every step of the way.
In 1885, we proved that education wouldn’t make women sterile. Back then, we couldn’t believe that anyone really thought a college degree would literally make women ill, just like we can’t believe that people still think the wage gap is somehow women’s fault. But “Graduating to a Pay Gap” makes it unequivocally clear that even when you control for different majors, occupations, and hours worked, the pay gap still exists.
With your help, we’ll be able to look back in a few years and laugh about the silly notion that women shouldn’t make as much money as men for doing the same work.
Onward and upward,
Linda D. Hallman, CAE
AAUW Executive Director
–From Maureen Downey, for the AJC Get Schooled blog