Graduating to a pay gap: Female college grads still earn less than male counterparts

Women face an earning gap once they graduate college, according to a new study. (AJC/file photo)

Women face an earning gap once they graduate college, according to a new study. (AJC/file photo)

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

39 comments Add your comment

jarvis

October 29th, 2012
10:40 am

Men are better employees.
They are better to work for, and they are better to work with. No drama….no pettiness.

William Casey

October 29th, 2012
11:00 am

I suspect that the fact that women often leave early to have children or stay and perform at lower levels once children arrive make them seem less valuable at the beginning of their careers. This should not be a factor but old ideas die hard.

Phil from Athens

October 29th, 2012
11:23 am

Women spend too much time gossiping, crying and whining about just about everything.

Attentive Parent/Invisible Serfs Collar

October 29th, 2012
11:30 am

WC-I had a right to paid maternity leave and unique knowledge the company I worked for could not do without for 8 weeks. I worry about all the young women who thought I should have simply said “see ya.”

You simply cannot want the power, salary, and prestige and then pretend you are just staff if you also want to have a child.

My solution was to talk with staff while kids napped and accept couriered packages in AM for PM pickup. Made it work and the CEO and COO knew I had priorities to take care of company as well as kids.

Another comment

October 29th, 2012
11:40 am

Awful biases guys give them up!!! I broke the pay ceiling by being an engineer and going to work for the Federal Gov. where all pay rates and jobs are posted.

Rafe Hollister

October 29th, 2012
11:49 am

I thought Obama signing the Lilly Ledbetter Act ended this, if not he needs to hush with the self praise.
The GOP says paying different wages based on sex was already illegal, and LL was redundant. So, I’m not sure what the problem is. If it is illegal, why is it happening?

In most cases women outperform men, having supervised women and men, I always preferred the woman, so I definitely think the pay should be equal. The info you provided does not provide much in clues, why they are being underpaid. Over the career, often women choose not to travel and to take more time off work to raise a family, and this causes a lag in pay compared with men. One year out of college this hasn’t had time to effect the salaries. We need more information.

Rick in Grayson

October 29th, 2012
11:52 am

Does this also apply to “models” in the fashion industry? Waiters at Hooters?

Looks like the scales are tipped big-time for the women.

Old timer

October 29th, 2012
12:39 pm

Many women’s salaries are affected by the decision to have children. If you are a good mom you just cannot put in the same hours. It changes the dynamics. The women who work with my husband do not put in the same hours, through no fault of their own. He, fortunately, had me to pull up slack. Someone must stay home when the kids are sick. Thankfully mine were healthy and I am healthy. I was a teacher and they went to my school and later to nearby middle and high schools.

indigo

October 29th, 2012
12:53 pm

In this era of civil rights and TV airwaves filled with law firm commercials, it’s hard to believe there’s still a pay gap between men and women.

Another view

October 29th, 2012
1:03 pm

Not one binder comment yet? Lets go people.

Jaynie

October 29th, 2012
1:05 pm

I can see from a lot of these comments why there is still a pay gap. Men, old and young, seem to think women just don’t work as hard as men, and a lot of bosses are still male. That is baloney. I make as much as my male counter parts because I refused to settle for less and had the (at the time, 25 years ago) the unmitgated nerve to call my company on gender bias in pay. I’ve been with the same company 35 years and never regretted working, never regretted asking for what I believed I was worth in salary and don’t expect now or ever to take less, just because I am female.

Lexi

October 29th, 2012
1:19 pm

Enter your comments here

Lexi

October 29th, 2012
1:27 pm

Curious timing of this “study” and the coincidence with the desperate theme of the democrats that there is a war on women that only the democrats can win. The largest impediment to earnings for women is that, on average, they still interrupt their work to have children, and, they work fewer hours while in the work force. They also choose lower wage occupations and smaller, often less demanding employers while working. When good studies “hold” , that is properly account, for these factors, the differences in earnings disappear. Anecdotes by a few women don’t change the underlying truth.

Beverly Fraud

October 29th, 2012
1:53 pm

Concerning majors, a revision to the DMS-IV has a new disorder: Categorically ****ing Insane.

The one and ONLY criteria? Declaring you are an education major, with a desire to teach in a public school.

Archie

October 29th, 2012
2:08 pm

You mean to tell me the Equal Pay Act of 1963 didn’t change all that? Not to mention the Civil Rights Act of 1964?

bootney farnsworth

October 29th, 2012
2:08 pm

@ William,

its simple economic geometry if you drop out of the workforce to raise a child you will fall behind in wages. just like we have with a decade of no raises and cuts.

williebkind

October 29th, 2012
2:09 pm

Why is discrimination not to pay women as much as men when you pay one employee more than another? I heard good looking people get better jobs than not so good looking people. Fat people hardly get hired. What is this about women? Do the liberals need their vote that bad?

bootney farnsworth

October 29th, 2012
2:11 pm

its fair to point out AAUW has a political ax to grind, same as the people who made waiting for Superman. doesn’t make it bad or evil, just know there is an agenda at work.

williebkind

October 29th, 2012
2:11 pm

I got it! Its because women need abortions and the pill paid for by the employer.

williebkind

October 29th, 2012
2:14 pm

” I refused to settle for less and had the (at the time, 25 years ago) the unmitgated nerve to call my company on gender bias in pay.”

Ready to sue were you?

bootney farnsworth

October 29th, 2012
2:15 pm

having worked for/with women and worked for/with men,

I prefer working with/for men hands down. women seem to bring the 9th grade mentality into the workplace. men tend to just tell you straight up if they don’t like you or you work.

bootney farnsworth

October 29th, 2012
2:16 pm

@willie
something wrong with a citizen using their right to legal redress?

Poor Boy from Alabama

October 29th, 2012
2:24 pm

FYI. This portion of the blog post is misleading:

“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.”

The Executive Summary of the study says that the difference in pay between men and women who graduate from the same college with the same major is about 7% one year out of college.

Even that big a gap seems suspicious since very few new graduates are getting 7% annual raises these days. That big a gap seems unlikely unless the women have lower starting salaries than the men. Maybe I missed it, but I didn’t see any mention of that in this blog post. .

http://www.aauw.org/GraduatetoaPayGap/upload/AAUWGraduatingtoaPayGapReport.pdf

There are lots of variables that can determine an employee’s compensation. Companies in different industries usually have different pay scales for new graduates. Even companies within the same industry sometimes offer different starting salaries to new graduates. Salaries often vary by region of the country or the difficulty of the job (e.g., lots of travel, remote locations, etc.).

The only way to do a credible analysis of the gender gap in compensation is to do an “apples-to-apples” comparison of male and female employees from the same schools, with the same majors, with similar academic credentials and work experiences (e.g, GPA’s, extracurricular activities, leadership experiences, summer jobs, internships, etc.), working for the same companies in the same locations, doing the same job, and with similar performance reviews.

You can’t fix a problem unless you understand it. The analysis cited in this blog post is not nearly rigorous enough to allow the reader to draw any definitive conclusions about gender inequality or bias. The differences in wages across professions and academic majors is more of an indication of the marketplace at work than it is of gender discrimination.

williebkind

October 29th, 2012
2:25 pm

“something wrong with a citizen using their right to legal redress?”

Absolutely not! If it is the citizen and not a special interest group with a different agenda.

AlreadySheared

October 29th, 2012
2:49 pm

Nor’Easter Sandy to slam into northeastern coast of US tonight. Women & minorities hit hardest.

10:10 am

October 29th, 2012
5:11 pm

Maureen, how about at the AJC?

Do females (and blacks) make up a percentage of the salaried journalist/management staff that accurately reflects Atlanta’s demographics? And do they take home a demographically correct percentage of total salary and benefits?

Do the totals in fact live up to the kudos, at one of Atlanta’s leading liberal Democrat institutions?

All I'm Saying Is....

October 29th, 2012
6:34 pm

This story is 100% wrong:

In the majority of U.S. metro areas, single women with no children in their 20s outearned their male peers, according to Time magazine’s March 21, 2012 cover story “The Richer Sex”. In Dallas, for example, a 20-something woman makes $1.18 to a man’s $1.

All I'm Saying Is....

October 29th, 2012
6:42 pm

According to a new analysis of 2,000 communities by a market research company, in 147 out of 150 of the biggest cities in the U.S., the median full-time salaries of young women are 8% higher than those of the guys in their peer group. In two cities, Atlanta and Memphis, those women are making about 20% more. This squares with earlier research from Queens College, New York, that had suggested that this was happening in major metropolises. But the 2010 study suggests that the gap is bigger than previously thought, with young women in New York City, Los Angeles and San Diego making 17%, 12% and 15% more than their male peers, respectively. And it also holds true even in reasonably small areas like the Raleigh-Durham region and Charlotte in North Carolina (both 14% more), and Jacksonville, Fla. (6%). Here’s the slightly deflating caveat: this reverse gender gap, as it’s known, applies only to unmarried, childless women under 30 who live in cities. The rest of working women — even those of the same age, but who are married or don’t live in a major metropolitan area — are still on the less scenic side of the wage divide. The figures come from James Chung of Reach Advisors, who has spent more than a year analyzing data from the Census Bureau’s American Community Survey. He attributes the earnings reversal overwhelmingly to one factor: education. For every two guys who graduate from college or get a higher degree, three women do. This is almost the exact opposite of the graduation ratio that existed when the baby boomers entered college. Studies have consistently shown that a college degree pays off in much higher wages over a lifetime, and even in many cases for entry-level positions. “These women haven’t just caught up with the guys,” says Chung. “In many cities, they’re clocking them.”

So I say let’s not play the ‘victim’ card any longer, applaud what many women have accomplished, encourage more to do the same, and keep pushing for better pay for the older ladies.

Read more: http://www.time.com/time/business/article/0,8599,2015274,00.html#ixzz2AjMGuX8H

Read more: http://www.time.com/time/business/article/0,8599,2015274,00.html#ixzz2AjM8kuI1

Drew

October 29th, 2012
6:44 pm

How is this even still being talked about as some “shocking mystery” in 2012? It all starts and ends with the fact that women give birth to and are the primary caregivers of children. This results in increased cost / decreased ROI to the employer from paid pregnancy leave, increased sick time, late arrival and early departure to care for child(ren), and increased healthcare costs. I know small business owners who won’t even interview women under 35 because they’re too terrified of them getting pregnant. The only other reason women are discriminated against in the workplace is because they tend to let their emotions effect their work more than men. Beyond that, most women I’ve worked with are more organized and every bit as capable of making analytical decisions and managing people as any man would be. It’s not ability, it’s circumstance. But circumstances can and often do dictate results.

tiger7_88

October 29th, 2012
7:30 pm

I work in the computer software field. While it is a field that has very few women in it, I have yet to have a co-worker that was payed any less than I am for comparable work. As a matter of fact, I’ve worked for over 15 years with same company now and I’ve had three managers, each and every one of them women (and a pleasure to work for).

People with agendas will always be able to find the statistics to support their agenda.

Lee

October 29th, 2012
8:21 pm

@Poor Boy, re: “The only way to do a credible analysis of the gender gap in compensation is to do an “apples-to-apples” comparison of male and female employees from the same schools, with the same majors, with similar academic credentials and work experiences (e.g, GPA’s, extracurricular activities, leadership experiences, summer jobs, internships, etc.), working for the same companies in the same locations, doing the same job, and with similar performance reviews.”

Exactly. I would be very surprised in this hypersensitive, litigative environment that any medium/large company would discriminate against women or minorities. If anything, I would say the opposite is true. Women and minorities get fast tracked to meet diversity quotas.

Male Who's Not Kidding Himself

October 29th, 2012
9:49 pm

Without reading the study, I’m assuming the salaries were self-reported. I wouldn’t be surprised if men, whom society judges mostly by earning power, lied about their compensation. Living in Atlanta, you run into more than a few “producers” (i.e., someone with an iMac, a Casio keyboard, and a Hotmail account) and “CEOs” (i.e., someone with an MBA from the University of Phoenix who registered his LLC and has no employees) who certainly aren’t above such dishonesty.

Read the Study

October 30th, 2012
9:41 am

What a joke. I can see why we have pay gaps considering some of the completely sexist comments on this article. The study in question used Department of Education data collected from a large sample of recent graduates. The study only compared graduates from the same major (male marketing majors vs. female marketing majors) NOT across degrees (male business majors vs. female education majors). Also, in the first year out of school most women do not yet have children so they are not asking for flexibility and there is no employment gap to explain the pay discrimination

THE REAL REASON there is such a gap is because of biased employers and unempowered women who don’t negotiate better salaries (as their male counterparts do).

Jenn

October 30th, 2012
10:24 am

So, if a company has two of the exact same positions and offers one to a male grad and one to a female grad, both at $40,000; the female accepts; the male negotiates an additional $5,000 and then accepts; is that a %10 “gender gap”? I keep reading on yahoo and stuff how women don’t negotiate and accept whatever they’re offered. That’s not the company’s fault.

Mitch

October 30th, 2012
10:57 am

Nothing is simple. Did you know that men are taller than women, Men are better at fooball, Women make great Legislators, women are better multitaskers, Women have more babies. The list goes on and on. Give it up These very poor studies (by someone who is unknown) do not take into account that every salary or wage is usually set by the employer and agreeo by the employee. Even with it’s flaws, it is a better system than in China where the Government dictates the wages.

Big Al

October 30th, 2012
12:57 pm

Drew is 100% correct. I know some of you may hate to hear the truth, but the truth is that it costs companies more to women than it does to employ men. When I was a recruiter for an accounting firm I rarely interviewed women of child bearing age because I knew what was going to happen. Women who leave the work force to start a family need to understand that the door may not re-open for them the second time around.

All I'm Saying Is....

October 30th, 2012
4:17 pm

The story is still 100% wrong. Keep ignoring the facts I shared, people, and continuing debating a largely, increasingly, non-issue. Apparently some of you need something to do.

Ole Guy

October 31st, 2012
3:25 pm

Jarvis, you may have a point. In the earlier days of employment, when the job particulars are still somewhat hazy, the tendency to become petty and drama-bound may be valid…for all people regardless of gender. However, it has been my experience that the female gland (no, I’m not trying to be a horse’s six) tends to focus on the important issues while the guys (your’s truly included) tend to posture…to…”measure”…

AnonMom

November 2nd, 2012
9:04 am

fyi — ,my understanding is the “Lily Ledbetter” act only expands the statute of limitations for pursing the law suit so that a woman can file suit for such a discrimination in pay (e.g. she can now keep the job for 20 years and then sue rather than needing to sue after 3 years once she initially finds out — I’m making up the numbers I don’t do employment work but it works like that just to give you an idea) — it keeps the employer “on the hook”until the woman leaves the job — voluntarily or involuntarily — and then she can sue — so there’s an argument to be made that it will work against “job creation” because there’s no way to guard against future liability. I am of the opinion, as a mother of 3 and professional (with advanced degrees who was “harmed” — my opinion — by pregnancies and maternity leaves) that woman can’t really ‘have it all” — there are only 24 hours in a day — you have to sleep — the employer claims x hours — the family gets y — you need personal time — you get time off. My career may not be where I want it to be — peers have “better” careers with “more” money (including men) — but I would not trade where my kids are — or the time I’ve spent with them (my husband is in the same “boat” and feels the same way so it’s not limited to women but I think applies mostly to women) — it has a lot to do with time — 24 hours a day, 7 days a week, 52 weeks a year and then has to do with choices one makes — we happened to choose relatively high paying professions (there’s better but there’s worse but we took ours with very high student loans — so there are other costs involved) — there are choices to be made across the board — what matters is making them with “eyes wide open.”