Equal Pay Act: Closing the Gender Wage Gap

There are many reasons that the gender pay gap persists, from employer discrimination to traditional gender roles. While the Equal Pay Act was designed to solve for inequality, more work needs to be done.

Everyone suffers from the economic loss of discriminatory wages. Ending the gender wage gap will require efforts on many fronts - from politics to culture, companies and individuals. Keep reading to understand the gender wage gap and how donors can make a difference.

Gender Pay Gap Facts

To understand the wage gap between men and women, it's important to look back at history. Here's a look at some of the milestones that occurred in the United States.

1911:

New York teachers are granted equal pay. After being denied previously, female teachers in New York are granted the same wages as their male counterparts.

1918:

The United States Employment Service publishes lists of jobs noted as “women’s work.” The National War Labor Board says they must be paid equal to men.

1942:

Unions and men championed equal pay, as they worried reduced pay for women would dilute their own wages. Although women increasingly moved toward a working lifestyle, equal pay did not gain national traction until 1963.

1963:

The Equal Pay Act amended the Fair Labor Standards Act of 1938 to prohibit pay discrimination based on sex. Specifically, employers must pay men and women the same amount for “substantially similar” work. A man and a woman who have the same level of qualification, seniority, experience, workload, and responsibility must receive equal pay. If employees discover that they they have experience wage discrimination, they can sue under the Equal Pay Act for back pay. The reasoning included in the text indicates that sex-based pay discrimination hurts workers and creates problems in commerce.

2009:

Lilly Ledbetter Fair Pay Act signed into law. Lilly Ledbetter, a manager at a factory, discovers she had been receiving discriminatory pay. She sues and wins approximately $3.3 million in back pay, only to have it stripped away by the Supreme Court because the decision to pay her less than her male counterparts dates back years. On Jan. 29, 2009, President Obama signs the Lilly Ledbetter Fair Pay Act, an amendment to the Equal Pay Act, into law. This amendment ensures that cases like (and including) Ledbetter’s could not be thrown out based on when the decision to pay less was made.

States of Pay

Most states also protect workers from gender-based wage discrimination. California, Washington, New York and Maryland all have specific legislation to protect worker pay based on sex.

Other states have provisions that prevent discrimination based on sex or more broadly, protected classes including sex. Only Alabama, Mississippi, and North Carolina have no form of sex-based equal pay requirement.

Wage Gap by Occupation

Although education increasing earnings by all populations, the wage gap is more significant at higher levels of degree attainment. Getting more education will help women earn more money, but it will not close the wage gap.

The following occupations have the largest wage gap, according to the most recent data from the U.S. Bureau of Labor Statistics.

Persistence of Pay Inequality

With all of the laws and regulations forbidding unequal pay, it may seem that the  issue of the gender wage gap is solved. Unfortunately, the problem persists. Research puts the gap between men and women working full time, year round at 20 cents on the dollar in the U.S. This gap is further complicated by factors including sexual orientation (straight women make less than lesbians) and race (Asian-American women make the most, Hispanic women make the least). A common argument for the persistence of the pay gap is that women tend to work in lower-paying fields. But even in female-dominated fields like education women receive lower pay than their counterparts.

It is true that traditionally female careers like child care are low-paying. Doctors make more than nurses, men dominate the former profession, and women the latter. This comes from the devaluation of “women’s work.”

Gender stereotypes play a significant role in education and career choices. Research shows that stereotypes about math performance impact results on math tests. Girls who are raised with the stereotype that their gender isn’t good at math may demonstrate anxiety when solving math problems. This has lifelong career and earnings ramifications making it more likely for girls to be pushed out of male-dominated, high-earning fields.

Gender stereotypes also hold women back in their chosen careers. Unpaid forms of work like childrearing, homemaking, and caring for the sick and elderly are immensely valuable to society, and disproportionately fall to women who often put these tasks ahead of their careers and undermine their long-term earnings. This is a significant portion of the pay gap, because equal pay is required only if employees have the same experience and seniority. Women who take work with flexible hours so that they can raise a family or help an ailing family member do so at the expense of their long-term earning potential.

6 Facts About the Gender Pay Gap

Our World in Data share these key facts about the gender pay gap. Learn more about what it really means.

1. The gender pay gap measures inequality but not necessarily discrimination: Because of factors like career choice and prioritizing flexibility, the gap is not necessarily caused by discrimination. Gender roles and stereotypes play a role.
2. In most countries there is a substantial gender pay gap: No country has yet reached gender equality.
3. In most countries the gender pay gap has decreased in the last couple of decades: Progress is being made, but it is not universal.
4. The gender pay gap is larger for older workers: The gender wage gap is smallest for women when they first enter the workforce, but increases over their lifetimes, especially as they have children.
5. Women in rich countries tend to be overrepresented in the bottom of the income distribution – and underrepresented at the top: High-income countries have high female labor force participation, but that has not made its way to leadership positions.
6. The gender pay gap is smaller in middle-income countries – which tend to be countries with low labor force participation of women: In these countries gender roles keep women in the house, but those who leave experience a smaller gap.

How Organizations are Working Toward Equal Pay

There are many ways that organizations are working to close the wage gap. Some are working internally to improve their own gap, others are tackling the issue outside of their organization to support women, reduce poverty, and boost economic growth.

Marie Stopes International is a family planning organization with a significant wage gap. Regulations in the U.K. that force organizations with more than 250 employees to reveal their pay data revealed the disparity. The organization subsequently committed to eliminating the problem. Data is essential in this, and all wage gap solutions. Understanding the extent of the gap and the speed of progress is key to righting the wage gap.

Equal Pay Miami Dade is working to close the gender wage gap to help the 20 percent of women in the county who live in in poverty. This campaign aims to highlight the issue and encourage wage transparency and a commitment to equality.

Some businesses are offering “returnships” to help women re-enter the workforce after they have children. These programs recognize an individual’s existing skills and help them bridge the gap in their work experience. Early indicators suggest that the programs have successfully placed graduates into full-time work.

Organizations are also intentionally improving their leadership pipeline to be more inclusive of women. Closing the wage gap is only one benefit of this practice, which is also good for the company’s success.

Equal Pay: How Donors Can Get Involved

There are many steps that donors can take to help to close the gender wage gap. Here’s how you can get started.

Look at the big picture: The Center for High Impact Philanthropy provides a framework for donors to empower women and offers 10 best bets for funders.

Strengthen laws: There are a few improvements that could be made to Equal Pay Act, including requiring transparency so that women can more easily discover the discrimination against them. In its current form, the Equal Pay Act puts the onus on women to discover and and sue over wage discrimination. Harsher penalties for companies found guilty of wage discrimination may also discourage the practice.

Work with men: Women can’t do this alone. Men disproportionately are in leadership positions and they need to look out for their employees and ensure that everyone receives fair pay. Engaging men and helping them understand the importance of this issue and their role in it is key.

Invest in women: Build a gender-lens investing strategy to support women in leadership and companies that pay women fairly.

Subvert gender roles: Girls need to know that they can be anything when they grow up, which can include a STEM career. Mentor girls or fund STEM programs aimed at girls to help boost participation in those fields. Support girls and boys in whatever their field of ambition might be, regardless of gender roles.

Change employment norms: To ensure men and women share the balance of care work, it’s crucial to improve paid leave policies, including parental leave. This will reduce the likelihood that child rearing and other care work will disproportionately fall to women. If parental leave is standard, taking time off to be with the family will impact women’s career trajectories less.

Support a vetted issue fund: Global Fund for Women supports organizations around the world that help women achieve freedom from violence, sexual and reproductive health and rights, and economic and political equality.

Promote financial literacy among women: Financial literacy is key to healthy adult life. It can be crucial to college success and help women fight for equal pay. There are many programs working to reduce financial illiteracy, including games and crypto-based apps.

Connect with those in the know. Philanthropy Women is a strong resource for philanthropic information related to improving the lives of women around the world.

Related Equal Pay Articles

Want to learn more about equal pay? Find out how a game can help spread understanding about the gender wage gap. Or, learn how the gender wage gap plays out around the world. Finally, read about doctors calling for health policies that support women.