Gender pay gap in the United States tech industry

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The gender pay gap in the United States tech industry is the divergence in pay between men and women who work in areas such as software engineering. [1] In 2018, reports show that for every dollar the average man made, women only made 82 cents, and women from underrepresented communities earn even less. [2] Despite applying for the same jobs at the same companies, women receive job offers that pay less than their male counterparts 63% of the time. [1] The gap does not affect women of all races equally, and discourages women, specifically those that are underrepresented minorities, from continuing to pursue opportunities in the technology industry. [1] [3] The wage gap in the tech industry is a result of a multitude of factors including lower initial offers and lack of negotiations. [3]

Contents

Pay gap factors

Women under 25 earn 29% less than their male counterparts, but this percentage reduces to 5% for employees over the age of 50. [4] The advent of the personal computer introduced additional barriers to entry for women as the marketing of personal computers was primarily directed at young boys. [4] This marketing strategy led to computers being associated with men, which played a role in associating computer-based jobs with men rather than women. [4] This decline in female participation led to women having fewer female role models and colleagues than their counterparts did in the past. The lack of representation also make it easier for negative stereotypes to permeate workplace cultures. [4]

Historically, women were better represented in technical industries "back when technologist jobs were considered menial, akin to typists". Emma Goldberg, a fellow at the University of Cambridge Centre for Gender Studies, points to hiring criteria developed by male executives that sidelined women as the industry became more profitable. [5] Studies have also pointed to occupational segregation as a mechanism that limits access to high-paying fields and career growth within a profession. [6]

Parenthood is identified as a factor. Mothers between the ages of 25 and 44 are less likely to be in the labor force, and those who are working tend to work fewer hours on average, leading to a reduction in earnings. This is identified as the motherhood penalty, and links to increase in pay for fathers, which is known as the fatherhood bonus. [7] [8]

Wharton professor Janice Bellace points to "outdated American laws" as a contributing factor, pointing to debates over comparable worth in the 1980s: "the U.S. Supreme Court just basically said no [because of] the way Title VII is written. So, we have an old-fashioned statute". [9]

The pay discrepancy continues to manifest itself as careers proceed, and once women begin making less than men, it continues throughout their careers. [4] A study performed by the Economic Policy Institute further found that men with college degrees make more per hour than women with an advanced degree. [10]

Race

The wage gap exists for women of all racial and ethnic backgrounds, but the size of the gap differs between different races. [1] [11] Among white, black, Asian, and Hispanic workers, Asian men and white women compare the most favorably to white men. Black and Hispanic women have the largest gap of any of the surveyed groups, which indicates that race plays an important role in the wage gap. [1]

Currently, minorities are underrepresented in the interview process at 6%, and they receive lower salary offers. [1] [11] However, Hispanic and black men still receive higher offers than their female counterparts of the same race. [1] Without considering the intersectionality of an individual, firms may correct for race or gender inequities at the expense of other circumstances. [11] Correcting just for race may perpetuate situations in which black and Hispanic men continue to make more than their female counterparts, while correcting exclusively for gender may allow white women to earn more than all groups but Asian and white men. [1] Corrections that avoid binaries can help to reduce siloed hiring practices that attempt to fix one issue at a time rather than a multifaceted approach. [1] [11]

Legislation

California Fair Pay Act

In 2016, California passed the California Fair Pay Act that prevented employers from asking job applicants about their prior salary. The act also required employers to provide a pay range for the job they are seeking upon request. [12] The law was designed to close the pay gap that existed between men and women in California at the time. [13] After the law was passed, an additional study undertaken by the state found a pay gap of 20.5% between female and male state employees. [14] State assembly representative Jim Cooper criticized these discrepancies, saying: "Female chiefs of staff make less than their male counterparts — that's just plain wrong". [14]

Icelandic Fair Pay Act

Members of the tech industry have pointed to Iceland as an example of how to implement law that effectively pays women and men equally for the same positions in organizations. At the beginning of 2018, the new law went into place and "is believed to be the first of its kind in the world and covers both the private and public sectors." [15] Unequal pay has been illegal in Iceland since 1961, but new law shifts the proof of fair pay from employers to employees. [16] Iceland has instituted laws in the past to attempt to rectify the pay gap, and despite having "the best track record on gender equality in the world," the laws had not been successful in creating equal pay for equal work. [16] Companies with over 25 employees will be reviewed every three years to confirm that they are paying men and women equally for equal work, and if they are not in compliance they will receive daily fines until they have reached compliance. [16] While the law is intended to fix specifically gender inequity the lawmakers believe that it can also be applied for other marginalized groups such as race and sexual orientation. [16]

Gender-based pay disputes

Google

In 2017, a spreadsheet was distributed amongst Google employees that detailed the discrepancy in pay between male and female employees. [17] Tech companies have continued to garner more importance and sway in the economy of the United States, but despite 'open cultures' there is a growing fear that "Silicon Valley has established itself as the boys' club of the west, just like how Wall Street has established itself as the boys' club of the East." [17] The reported pay gap led to a lawsuit filed against Google claiming that women who work as engineers, managers, sales, and early childhood education positions are systematically paid less than men at the company. [18] Google has been proactive in responding to the critiques and conducted a comprehensive audit of their organization to attempt to rectify the pay gap in the company. Their internal research concluded that 228 employees were underpaid and raised their compensation, which resulted in a $270,000 cost for Google. [18]

Skepticism

Skeptics of the wage gap claim that statistics are manipulated to present the data in a way that benefits the argument of a gender wage gap. [19] Skeptics further assert that the gap is a result of women’s choice to not pursue jobs that pay the same rate as their male counterparts, which skews the data to create a bigger gap than actually exists. [20] The gap is rationalized by highlighting that men choose more dangerous jobs or higher paying fields that allow for them to advance their earning potential. [20] Research that disputes the existence of a gender pay gap highlights the choices women might make to pursue lower-paying jobs than their male counterparts. Skeptics also feel it is not the job of employers to create representative hiring pools. [19] Skeptics acknowledge that cities such as Los Angeles report that in tech interview candidate pools women are underrepresented by 29%, [1] but believe that women may self select themselves out of certain jobs. [3] [20] The lack of representation inhibits women from earning the same salaries within organizations because they are not hired at the same rate, and when they are hired are less likely to negotiate salary. [21] Studies performed in 2023 counter this last point, finding that "the widespread narrative that women don't ask is outdated". [22]

Related Research Articles

<span class="mw-page-title-main">Salary</span> Form of periodic payment from an employer to an employee

A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis. Salary can also be considered as the cost of hiring and keeping human resources for corporate operations, and is hence referred to as personnel expense or salary expense. In accounting, salaries are recorded in payroll accounts.

<span class="mw-page-title-main">Equal Pay Act of 1963</span> United States labor law of the New Frontier program

The Equal Pay Act of 1963 is a United States labor law amending the Fair Labor Standards Act, aimed at abolishing wage disparity based on sex. It was signed into law on June 10, 1963, by John F. Kennedy as part of his New Frontier Program. In passing the bill, Congress stated that sex discrimination:

Equal pay for equal work is the concept of labour rights that individuals in the same workplace be given equal pay. It is most commonly used in the context of sexual discrimination, in relation to the gender pay gap. Equal pay relates to the full range of payments and benefits, including basic pay, non-salary payments, bonuses and allowances. Some countries have moved faster than others in addressing equal pay.

Employment discrimination is a form of illegal discrimination in the workplace based on legally protected characteristics. In the U.S., federal anti-discrimination law prohibits discrimination by employers against employees based on age, race, gender, sex, religion, national origin, and physical or mental disability. State and local laws often protect additional characteristics such as marital status, veteran status and caregiver/familial status. Earnings differentials or occupational differentiation—where differences in pay come from differences in qualifications or responsibilities—should not be confused with employment discrimination. Discrimination can be intended and involve disparate treatment of a group or be unintended, yet create disparate impact for a group.

The gender pay gap in the United States is a measure comparing the earnings of men and women in the workforce. The average female annual earnings is around 80% of the average male's. When variables such as hours worked, occupations chosen, and education and job experience are controlled for, the gap diminishes with females earning 95% as much as males. The exact figure varies because different organizations use different methodologies to calculate the gap. The gap varies depending on industry and is influenced by factors such as race and age. The causes of the gender pay gap are debated, but popular explanations include the "motherhood penalty," hours worked, occupation chosen, willingness to negotiate salary, and gender bias.

Gender inequality is the social phenomenon in which people are not treated equally on the basis of gender. This inequality can be caused by gender discrimination or sexism. The treatment may arise from distinctions regarding biology, psychology, or cultural norms prevalent in the society. Some of these distinctions are empirically grounded, while others appear to be social constructs. While current policies around the world cause inequality among individuals, it is women who are most affected. Gender inequality weakens women in many areas such as health, education, and business life. Studies show the different experiences of genders across many domains including education, life expectancy, personality, interests, family life, careers, and political affiliation. Gender inequality is experienced differently across different cultures.

<span class="mw-page-title-main">Occupational sexism</span> Discrimination based on the sex in a place of employment

Occupational sexism is discrimination based on a person's sex that occurs in a place of employment.

Occupational segregation is the distribution of workers across and within occupations, based upon demographic characteristics, most often gender. Other types of occupational segregation include racial and ethnicity segregation, and sexual orientation segregation. These demographic characteristics often intersect. While a job refers to an actual position in a firm or industry, an occupation represents a group of similar jobs that require similar skill requirements and duties. Many occupations are segregated within themselves because of the differing jobs, but this is difficult to detect in terms of occupational data. Occupational segregation compares different groups and their occupations within the context of the entire labor force. The value or prestige of the jobs are typically not factored into the measurements.

<span class="mw-page-title-main">Paycheck Fairness Act</span> Proposed law to address the gender pay gap

The Paycheck Fairness Act is a proposed United States labor law that would add procedural protections to the Equal Pay Act of 1963 and the Fair Labor Standards Act as part of an effort to address the gender pay gap in the United States. A Census Bureau report published in 2008 stated that women's median annual earnings were 77.5% of men's earnings. Recently this has narrowed, as by 2018, this was estimated to have decreased to women earning 80-85% of men's earnings. One study suggests that when the data is controlled for certain variables, the residual gap is around 5-7%; the same study concludes that the residual is because "hours of work in many occupations are worth more when given at particular moments and when the hours are more continuous. That is, in many occupations, earnings have a nonlinear relationship with respect to hours."

Gender pay gap in Australia looks at the persistence of a gender pay gap in Australia. In Australia, the principle of "equal pay for equal work" was introduced in 1969. Anti-discrimination on the basis of sex was legislated in 1984.

In Russia the wage gap exists and statistical analysis shows that most of it cannot be explained by lower qualifications of women compared to men. On the other hand, occupational segregation by gender and labor market discrimination seem to account for a large share of it.

The motherhood penalty is a term coined by sociologists, that in the workplace, working mothers encounter disadvantages in pay, perceived competence, and benefits relative to childless women. Specifically, women may suffer a per-child wage penalty, resulting in a pay gap between non-mothers and mothers that is larger than the gap between men and women. Mothers may also suffer worse job-site evaluations indicating that they are less committed to their jobs, less dependable, and less authoritative than non-mothers. Thus, mothers may experience disadvantages in terms of hiring, pay, and daily job experience. The motherhood penalty is not limited to one simple cause but can rather be linked to many theories and societal perceptions. However, one prominent theory that can be consistently linked to this penalty is the work-effort theory. It is also based on the mother's intersectionality. There are many effects developed from the motherhood penalty including wage, hiring, and promotion penalties. These effects are not limited to the United States and have been documented in over a dozen other industrialized nations including Japan, South Korea, The United Kingdom, The Netherlands, Poland, and Australia. The penalty has not shown any signs of declining over time.

<span class="mw-page-title-main">Gender pay gap</span> Average difference in remuneration amounts between men and women

The gender pay gap or gender wage gap is the average difference between the remuneration for men and women who are working. Women are generally found to be paid less than men. There are two distinct numbers regarding the pay gap: non-adjusted versus adjusted pay gap. The latter typically takes into account differences in hours worked, occupations chosen, education and job experience. In other words, the adjusted values represent how much women and men make for the same work, while the non-adjusted values represent how much the average man and woman make in total. In the United States, for example, the non-adjusted average woman's annual salary is 79–83% of the average man's salary, compared to 95–99% for the adjusted average salary.

<span class="mw-page-title-main">Equal Pay Day</span> Symbolic day dedicated to raising awareness of the gender pay gap

Equal Pay Day is the symbolic day dedicated to raising awareness of the gender pay gap. In the United States, this date symbolizes how far into the year the average median woman must work in order to have earned what the average median man had earned the entire previous year. The exact day differs year by year. In 2022, it was March 15. On average, women earn $0.82 for every dollar men earned in 2019.

Gender pay gap in India refers to the difference in earnings between women and men in the paid employment and the labor market. For the year 2013, the gender pay gap in India was estimated to be 24.81%. Further, while analyzing the level of female participation in the economy, this report slots India as one of the bottom 10 countries on its list. Thus, in addition to unequal pay, there is also unequal representation, because while women constitute almost half the Indian population, their representation in the work force amounts to only about one-fourth of the total.

Authored by State Senator Hannah-Beth Jackson, the California Fair Pay Act is an amendment to the existing California labor laws that protects employees who want to discuss about their co-workers' wages as well as eliminating loopholes that allowed employers to justify inequalities in pay distribution between opposite sexes. The bill is an extension of the California Equal Pay Act of 1949, which was originally intended to enforce equal pay.

<span class="mw-page-title-main">Women in Iceland</span> Overview of the status of women in Iceland

Women in Iceland generally enjoy good gender equality. As of 2018, 88% of working-age women were employed, 65% of students attending university were female, and 41% of members of parliament were women. Nevertheless, women still earn about 14% less than men, though these statistics do not take into account the hours worked, over-time, and choices of employment. Iceland has the world's highest proportion of women in the labour market and significant child care allocations for working women. It has gender neutral parental leave, with a quota for each parent, and a transferable part.

Prior salary information is one of the factors involved in the implementation of the Equal Pay Act and prior salary legislation in the United States.

<span class="mw-page-title-main">Gender pay gap in sports</span>

Gender pay gap in sports is the persistence of unequal pay in sports, particularly for female athletes who do not receive equal revenue compared to their counterparts, which differs depending on the sport. According to the research conducted by BBC, "a total of 83% of sports now reward men and women equally". However, it does not mean that the wage gap in sports has narrowed or disappeared. In 2018, Forbes released the list of the top 100 highest-paid athletes, all of them being male athletes. A similar situation also occurred in 2017, where there was only one female athlete – tennis player Serena Williams — who joined the list and ranked No.56. Billie Jean King brought awareness to the issue of unequal pay in the early 1970s, when she was awarded $2,900 less than her male counterpart at the Italian Open. The timeline of the gender pay gap in sports displays the significant events that have occurred since the 1970s

Gender parity is a statistical measure used to describe ratios between men and women, or boys and girls, in a given population. Gender parity may refer to the proportionate representation of men and women in a given group, also referred to as sex ratio, or it may mean the ratio between any quantifiable indicator among men against the same indicator among women.

References

  1. 1 2 3 4 5 6 7 8 9 10 "2018 State of Wage Inequality in the Workplace Report - Hired". Hired. Archived from the original on 22 May 2018. Retrieved 2018-05-18.
  2. ↑ "Pay Equity & Discrimination". Institute for Women's Policy Research. Archived from the original on 2017-03-07. Retrieved 2019-11-27.
  3. 1 2 3 Lam, Bourree (2016-07-27). "What Gender Pay-Gap Statistics Aren't Capturing". The Atlantic. Retrieved 2018-05-18.
  4. 1 2 3 4 5 "Tech's Gender Pay Gap Hits Younger Women Hardest". Fortune. Retrieved 2018-06-06.
  5. ↑ Goldberg, Emma (2019-02-19). "Women built the tech industry. Then they were pushed out". The Washington Post . Retrieved 2024-06-26.
  6. ↑ "Finding solutions to the gender pay gap in tech". Stanford University . 2017-06-15. Retrieved 2024-06-26.
  7. ↑ Kochhar, Rakesh (2023-03-01). "The Enduring Grip of the Gender Pay Gap". Pew Research Center . Retrieved 2024-06-28.
  8. ↑ Sassler, Sharon; Meyerhofer, Pamela (2023-10-23). "Factors shaping the gender wage gap among college-educated computer science workers". PLOS One . 18 (10): e0293300. doi: 10.1371/journal.pone.0293300 . PMC   10615266 . PMID   37903156.
  9. ↑ "Could Iceland's Equal Pay Law Work in the U.S.?". Wharton School . 2018-01-11. Retrieved 2024-06-29.
  10. ↑ Schieder, Jessica; Gould, Elise (2016-07-20). ""Women's work" and the gender pay gap". Economic Policy Institute . Retrieved 2024-06-29.
  11. 1 2 3 4 Carter, Shawn M. (2017-09-28). "Tech pays some of the highest salaries in the US—there's just one problem". CNBC. Retrieved 2018-06-06.
  12. ↑ "New law bans California employers from asking applicants their prior salary". SFGate. Retrieved 2018-06-06.
  13. ↑ Eaton, Dan. "Two changes to the California equal pay law coming in 2017 that all employees need to know". Pomerado News. Retrieved 2018-06-06.
  14. 1 2 Mason, Melanie (16 May 2017). "Despite efforts on equal pay, the gender salary gap in California government jobs persists". Los Angeles Times . Retrieved 2018-06-06.
  15. ↑ Wagner, Ines (2020-12-14). "Equal Pay for Work of Equal Value? Iceland and the Equal Pay Standard". Social Politics: International Studies in Gender, State & Society . 29 (2): 477–496. doi:10.1093/sp/jxaa032. hdl: 11250/2757551 . Retrieved 2024-06-28.
  16. 1 2 3 4 "Companies In Iceland Now Required To Demonstrate They Pay Men, Women Fairly". NPR.org. Retrieved 2018-05-14.
  17. 1 2 "At Google, Employee-Led Effort Finds Men Are Paid More Than Women". The New York Times. 2017-09-08. ISSN   0362-4331 . Retrieved 2018-05-18.
  18. 1 2 "Google spent about $270K to close pay gaps across race and gender – TechCrunch". techcrunch.com. 15 March 2018. Retrieved 2018-05-18.
  19. 1 2 "Yes, the gender wage gap is still a myth—and a potentially dangerous one". Acton Institute PowerBlog. 2017-04-04. Retrieved 2018-05-18.
  20. 1 2 3 "8 Reasons Why The "Gender Pay Gap" Is A Total Sham". Business Insider. Retrieved 2018-05-18.
  21. ↑ "2018 State of Wage Inequality in the Workplace Report - Hired". Hired. Retrieved 2018-05-18.
  22. ↑ Blankenship, Lacie (2023-09-08). "New research debunks the gender pay gap myth that 'women don't ask'". Phys.org . Retrieved 2024-06-25.
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