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How the Gender Pay Gap is Affecting Women’s Financial Security

Black woman holding up a post-it note that says equal pay

The gender pay gap is a complex issue that affects women’s financial security and overall well-being. While there is a continuing effort to reduce and close the pay gap, many women continue to earn less than men. It is important to learn more about the complexities of the issue, the contributing factors of discrepancies of the gender pay gap, and what we can do about it. The issue of the gender pay gap affects not only individual women but also society as a whole.

What is the Gender Pay Gap?

As we celebrate Women’s History Month, the gender pay gap is a crucial topic of conversation. You may have heard of the gender pay gap, but what does it mean? The gender pay gap refers to the difference between the average earnings of women and men. But how can we tell if women are getting paid less than their male counterparts? The pay gap is calculated by dividing the average annual earnings of women by the average annual earnings of men. If women earn less than men on average, we can see this pay gap discrepancy displayed as a percentage. However, it’s becoming increasingly discovered that the true gender wage gap is more complicated than a simple calculation tells us. While the gender pay gap has decreased significantly over the past several decades, and women have outperformed men in college degrees for the past twenty years, the pay gap between women and men still needs to be explored and discussed, especially regarding establishing financial security for women as they age.

Caretaking and the Gender Pay Gap

The numbers commonly talked about is that women typically make .79 cents to every $1 that their male counterpart earns. Talked about less are the complexities and reasons behind this large pay disparity. Women’s role in the workforce has changed drastically in the past fifty years since the Equal Pay act of 1963, which made it illegal to pay women less based on their gender. And while there have been huge leaps forward in women’s rights and professional opportunities, women are still bearing the brunt of cultural and societal caretaking, which drastically impacts their earnings and financial security.

What people miss about the gender wage gap ︱ Vox

According to numerous studies, the most significant contributing factor to the earning disparity between men and women is the burden of care that falls primarily upon women. Women take on the vast majority of the biological, societal, and cultural responsibilities of familial caretaking, childbearing, and child-rearing, and the gender earning gap shows the startling consequences of this care imbalance, often referred to as the “care penalty.”

Compared to men, women are more likely to:

There is an established unequal distribution of caregiving responsibilities between men and women. While some of this may be expected, as women are at a physical disadvantage while pregnant, women also take on significantly more responsibilities after birth and in caretaking in general. Women are more likely to take time off work to care for children or elderly relatives, which can negatively impact their pay and career trajectories. On average, women are likely to spend twelve years out of the workforce to care for children or other relatives or loved ones who need significant care. Now also take into account that women are more likely to work in lower-paying industries and caregiving professional roles such as in teaching, nursing, and psychology.

Due to this caretaking demand on women, they are more likely to drop their work hours from full-time to part-time or seek jobs that have flexible work hours to juggle the demands of a financial provider and a physical and emotional caretaker. Consequently, these gaps in employment and reduced availability widen the wage gap even further as their male counterparts are more likely to work long hours and have a consecutive work history, giving them a favorable edge in promotions and wage increases.

In addition to the care penalty that women’s wages face, discrimination in hiring continues to plague women in the workplace, affecting their wages as well as their professional growth potential. One study showed that during the hiring process, 70% of employers surveyed expected women to disclose their plans to have children, and 25% felt it was reasonable to ask these questions despite it being illegal to discriminate on this basis.

The Impact of the Pay Gap

The gender pay gap has a significant impact on women’s financial security. Women who earn less than men are more likely to live in poverty, especially in old age. Both the weight of the pay gap and the burden of caregiving falls most heavily on low-income and minority women. 52% of women whose income meets or falls below the national median income of $35k also spend over twenty hours a week giving consistent care to someone close to them. These low-income caregivers are more likely to suffer from considerable health and stress-related issues such as coronary heart disease (CHD), high blood pressure, hypertension, and poor immune function.

Woman in glasses looking at laptop screen
The gender pay gap has a significant impact on women’s financial security (Image Source: Shutterstock)

Naturally, women who earn less than men have less money to spend and save to secure their futures. Women, on average, have less money to save and invest for retirement, which puts them at greater risk of living in poverty when they are elderly. In consequence, women who earn less are also more likely to rely on government support, such as welfare programs.

What Can Be Done to Close the Gender Pay Gap?

The gender pay gap is a complex issue with no single solution. However, as we try to understand the issue and the nuances behind the gap, it makes it easier to establish and take steps to correct inappropriate and harmful behaviors in society and the workplace. Here are some things that can be done to help close the gap:

  1. Normalize equal caretaking responsibilities between men and women: The wage gap will never be closed until there is a more equal representation of caretaking responsibilities shared between men and women. Until women and men are sharing the social and cultural burdens of familial caretaking, equal earning opportunities for women will continue to suffer.
  2. Legal: Continue to encourage organizations and governments to propose and enact laws that aim to reduce and close the gender pay gap. For example, the United States enacted the Equal Pay Act in 1963. This law makes it illegal for businesses to pay an employee less based on their gender.
  3. Pay transparency: Many organizations are trying to combat the pay gap by promoting transparency within the organization regarding their employees’ salaries. Many of these businesses will make their employees’ salaries available to view to promote transparency and trust among their organization that pay is being negotiated fairly.
  4. Negotiating: Other businesses and organizations are offering classes and training in negotiation. When offered with women in mind, these trainings can help give women the tools and ability to confidently negotiate for better compensation and understanding how to better communicate their professional value to their employers. Not only does this benefit women on a professional level, it also gives them greater ability to negotiate in many aspects of their lives—saving them money and giving them greater access to opportunities.
  5. Parental leave: Parental leave policies have been an increasing conversation in public and private organizations. Many argue that the gender pay gap can be closed significantly by increasing the availability and accessibility of paid parental leave and easing the burden of working mothers. On average, women take ten times the amount of leave as men after childbirth. Paid parental leave allows women to take time off work to care for their children while ensuring they have a job to return to after the pre-negotiated timeframe. Also, normalizing paternal leave for fathers aims to help evenly share the responsibilities of working parents.
  6. Early childhood programs: Numerous studies have shown that increasing access and quality of early childhood programs in low-income and disadvantaged communities significantly influences and positively impacts children’s education and earnings later in life. Supporting public and private early childhood programs that provide disadvantaged children with healthy living and learning environments benefit the children in the present and future and helps close the earning gap by allowing working mothers to stay in the workforce and increase their wage potential.

Final Thoughts

While these and other actions are important steps in the right direction, the gender pay gap is a complex issue that requires attention to societal, cultural, and economic nuance. And although there has been a lot of progress concerning womens’ rights, equality, and opportunity, there is still a lot of work to be done. It is important to learn and discuss the arguments and reasons behind gender discrepancies, such as the gender pay gap. The cooperation and commitment of governments, employers, and individuals are essential to achieve lasting change and support of women in all walks of life.