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Did The Wage Gap Drop Dramatically Over Night? No.

A new report from the Pew Research Center states that Millennial women are “near parity” with men in in the workplace. They report that young women (ages 25 to 34) had median hourly earnings that were 93 percent of young men’s median hourly earnings. While we would love to welcome the news that young women and men are almost equals in the workplace, there is a lot more to that story.

First, some clarifications about calculations and defining the wage gap:

  • Pew focuses on hourly wages because women work fewer hours than men and include both full- and part-time workers. They explain their reasons for these choices here.
  • We at NWLC calculate the wage gap using median annual earnings for full-time, year-round workers only. We do this to control for some of the differences in hours and full-time/part-time status that would otherwise skew the earnings ratio, while still reflecting some of the factors, including occupational segregation and employment discrimination, that prevent women from achieving fair pay.

Using either calculation it is true that younger women experience a smaller gender wage gap than older women. By our calculation, young women who work full-time, year-round are typically paid 88 percent of what their male peers are paid—a wage gap of 12 percent. While this is markedly better than the overall earnings ratio, which has been 77 percent for the last decade(and which Pew calculates at 84 percent using median hourly wages), it is still nowhere near parity.

The Wage Gap by Age

Young women typically make 88 cents for every dollar young men make. How does this add up?

  • In one year, young women typically make $5,000 less than young men.
  • If this wage gap were to stay constant over a 40-year career, a woman would earn $200,000 less than her male counterpart.
  • We know, however, the wage gap gets worse as women advance in their careers. Using the wage gap of 23 percent for all women over 15 working full time, year round, we find that over a 40-year career, women typically lose $464,300 due to the wage gap.

Later in the report, Pew points out that young women are “significantly more likely” than their male counterparts to earn a bachelor’s degree (38 percent vs. 31 percent). A seven percentage point difference is indeed substantial, and demonstrates that even with higher levels of educational attainment, younger women are still paid less. Furthermore, women with all levels of education earn less than their male counterparts and the most highly educated women lose the most to the wage gap. In fact, women with a bachelor’s or higher degree who work full time, year round typically lose over $865,300 to the wage gap over a 40-year career.

The Pew Research study offers a lot of interesting insights into perceptions of the workplace among young men and women. For example, they found that 60 percent of Millennial women believe that men generally earn more than women for doing the same work, compared to only 48 percent of Millennial men. They also examine the challenges that face these young women in the next stage of their careers as they balance work and family, and how workplace inequality compounds over time. We agree that societal perceptions and the challenging work-life balance are important topics and contributing factors to gender inequality. The whole study is worth a read, just make sure you don’t stop at the headline and assume that the fight for equal pay is done.


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