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The Cost of the Wage Gap for Women in the U.S.
The Impact of the Wage Gap
The wage gap costs women in the U.S. about $1.6 trillion a year, a new report finds.
According to the National Partnership for Women and Families, women earned 78 cents for every dollar that men made in 2022.
Researchers calculated the total cost to women of the wage gap by using statistics from the U.S. Census Bureau. This data includes all women who worked, regardless of full- or part-time status, as well as those who took time off for illness or caregiving.
More from Women and Wealth
Here’s a look at more coverage in AsumeTech’s Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.
The Need to Address the Wage Gap
“We’ve had the pay gap for so long, people have become desensitized to it and think it’s normal,” said Jocelyn Frye, president of the National Partnership for Women and Families. “But it’s not anything that we should consider normal, and we ought not to normalize disparities that ought not to exist.”
While the numbers are discouraging, experts say the information should motivate women to be more aggressive during pay negotiations.
“I don’t want it to dissuade women or make them feel less motivated to go out there and get the pay they deserve,” said career and money expert Mandi Woodruff-Santos.
Factors Contributing to the Wage Gap
Three factors are contributing to the persistent pay gap, said Frye:
- Caregiving responsibilities: Women tend to work fewer hours due to assuming caregiving responsibilities in their families.
- Occupational segregation: Women are often concentrated in lower-paying jobs and face barriers to higher-paying positions.
- Workplace discrimination: Women continue to face gender bias and discrimination.
“If you intervene in those three issues alone, you could cut that gap significantly,” said Frye.
Impact on Women of Color
Asian American women earned the most among female workers, making 89 cents for every dollar that white, non-Hispanic male workers earn.
The pay scale worsens for each major racial or ethnic group, with white females earning 74 cents, Black females earning 66 cents, and Latina females earning 52 cents for every dollar earned by white males.
Tips for Women to Overcome the Wage Gap
It’s important not to ignore the data, but rather let it motivate you to take action, emphasized Mandi Woodruff-Santos, career and money expert.
Here are three tips for getting ahead:
1. Expand your network
Build up your confidence by sharing your work and expertise, both within your company and in your industry. Make connections and ensure your name is associated with excellence.
Keep pushing and strive to have a seat at the table in rooms that were not originally built with diversity in mind.
2. Stay informed about your market value
Engage in substantive conversations about compensation with hiring managers and recruiters to understand your market value. Consider obtaining a competing job offer to strengthen your negotiation position.
Show your employers that you are desired by other companies to increase your bargaining power.
3. Think about the ‘compensation cupcake’
Use the “compensation cupcake” analogy to determine your asking price and understand your worth.
The base salary is the market rate, while additional incentives are represented by the icing. Unvested benefits, like equity or 401(k) plan matches, are the sprinkles. Account for the gender pay gap by adding a 10% to 20% premium to your desired compensation.