The gender wage gap just increased for the first time in 20 years. It barely made headlines.
Is this another sign that we don’t value women's contributions?
When I was offered my first entry level job, it never dawned on me to negotiate my salary. I was thrilled to get a job offer! I know many of you most likely did the same. I was grateful and excited to put my talent to work. And even later, when offered the CEO position, part of me was so flattered to get to the C-Suite I didn’t negotiate as much as I could (should) have. BTW, I’m confident that the man who had the position before me, who took the company in a disastrous direction, was paid more than I.
Women don’t own the responsibility for the gender wage gap because we don’t negotiate enough. The issue is far more complex and involves a long history of systemic gender bias, bias that leads to a lower perceived value for women’s work. In our patriarchal society, men who have been the major breadwinners, were and still are considered more valuable.
Negative assumptions about a woman’s worth will most likely take decades to eradicate or at the very least officially challenge. Knowing all this, however, I still believed we were making progress closing the pay gap, albeit slow progress.
But when I read the news that the gender pay gap widened for the first time in 20 years, I was upset. I was even more upset when the news barely made headlines despite the extensive impact on women, society, as well as the economy.
Is this another sign that we don’t value a woman’s contributions?
In this newsletter, Own Your Ambition, I write about empowering women and issues affecting women in the workplace and beyond, and to me, bringing more awareness and hopefully discussion of the inequity of the ongoing gender wage gap is a critical part of my mission.
For those of you unfamiliar with the gender pay gap and the implications, let me start with the facts.
As of 2024, women in the U.S. earn about 84 cents for every dollar earned by white men working full-time in comparable roles. This gap has widened for the first time in 20 years.
Comparative Earnings: Black women earn 67 cents, Indigenous women earn 59 cents, and Hispanic women earn 51 cents for every dollar white men earn.
Although the gender wage gap is often discussed using dollars and cents, it greatly affects women’s earnings in the long term because it compounds over a lifetime. This is important. “Over the course of a 40-year career, if the wage gap remains unchanged, women working full time, year-round would lose approximately $462,000 in average earnings, and all women workers would lose an average of $566,800 when compared with white, non-Hispanic men.”
On a global scale, narrowing the difference in wages between men and women in the labor force can boost the world’s economy by about 7% — or $7 trillion, according to a Moody’s Analytics report.
Here in the United States, the gender wage gap has significant economic implications, including lost income that directly reduces economic growth. Reduced earnings mean less disposable income, which curtails consumer spending and hinders economic mobility—key drivers of economic and personal expansion. Keep in mind, in 2024, women still make 85 percent of household purchasing decisions.
I reached out to Lauren Buckley, co-founder at The Hush Collaborative, a women-founded strategy consultancy focused on organizational development, for her insights on the causes of the gap and possible solutions. I’ve included her responses.
Why Should We Care?
Caring about the gender wage gap transcends being a women’s issue; it is a critical economic, workforce, and societal concern.
Family Stability: When everyone earns a fair wage, families thrive, and stress over financial stability decreases. Conversely, when women earn less, families struggle, which destabilizes communities.
Value and Equality: Everyone deserves to feel valued and compensated fairly for their work. Ignoring the wage gap perpetuates a cycle of inequality that stifles workforce potential and innovation.
Future Generations: Addressing the wage gap today sets a precedent for future generations, providing them with hope and opportunities free from the burden of bias.
Collective Impact: Women earning less impacts everyone, including men. We need more leaders and allies who do not share our identity to actively support equitable practices. When women succeed, communities thrive, companies grow, and our shared economic experiences benefit everyone.
The Major Systemic Barriers to Financial Success for Women
Women in the workforce face numerous systemic barriers that hinder our ability to achieve financial success comparable to our male counterparts.
1. Occupational Segregation: Occupational segregation means people of different races and genders are unevenly represented in different kinds of jobs, which have very different wages, benefits and working conditions.
Many jobs traditionally held by women, particularly in sectors like healthcare and education, start with lower wages compared to fields such as STEM or construction. This disparity persists even as young women increasingly outpace young men in college graduation rates and advanced degrees. Furthermore, women who enter male-dominated fields often encounter barriers such as limited promotional opportunities and implicit biases that affect their pay.
2. Caregiving Responsibilities: Unpaid family care for children and older adults, which forces women more than men to reduce their work hours, partially explains this enduring gender gap in earnings. Women disproportionately shoulder caregiving duties, leading to part-time work and career interruptions requiring more flexibility. This "care penalty" which includes the motherhood penalty, results in significant lifetime earnings losses and limits advancement opportunities.
According to recent findings from the U.S. Department of Labor, the average employment-related costs for women providing unpaid care to family members amount to approximately $295,000 over their lifetimes. College-educated mothers experience even more significant losses, averaging $420,000 in lost wages and retirement savings. Not to mention, our unpaid labor is valued at $10.9 trillion annually, exemplifying how one systemic barrier reinforces and compounds the others.
3. Gender-based Discrimination: The insidious nature of both overt and implicit gender-based biases affects hiring, promotion, retention, and pay equity practices. This often-diminished, downplayed, and boys-club-protected barrier is particularly personal for us not only as women working in the corporate arena, but women entrepreneurs. We all have stories and shared experiences about discrepancies in compensation, challenging promotion negotiations, inconsistent and gender-based job expectations, as well as physical and emotional trauma.
4. Limited Access to Networks and Mentorship: The World Economic Forum’s Global Gender Gap report shows that achieving gender parity in leadership in business and government is a key lever for addressing broader gender gaps in households, societies and economies. Women often have less access to sponsorship, mentorship, and development opportunities focused on career advancement. The scarcity of female leaders to mentor and guide makes it challenging for women to envision and execute on plans for advancement. In 2024, these barriers are exacerbated by racial and ethnic disparities, with women of intersectional identities facing even wider gaps and more significant discrimination.
The Impact on Organizations
Women comprise nearly 60 percent of the American workforce, highlighting that every organization must recognize what’s at stake.
Talent Retention: Companies that neglect wage discrimination risk losing top female talent to those prioritizing equitable pay. The loss of female talent can lead to compounded losses for organizations.
Profitability and Diversity: Research indicates that increasing gender diversity can boost profitability and value creation, potentially adding $28 trillion to global GDP by 2025. Diverse leadership contributes to innovative solutions and better decision-making.
Employee Satisfaction: Companies with higher female representation tend to experience greater employee satisfaction. Women leaders are often more supportive and inclusive, fostering a collaborative environment that retains talent and attracts new employees who value diversity.
Legal Compliance: Organizations may face consequences and financial penalties for non-compliance with equal pay laws, underscoring the importance of proactive measures in addressing the wage gap.
Potential Solutions to Mitigate the Gap
A multifaceted approach is essential to address and mitigate the gender wage gap.
Policy Advocacy: We need to advocate for legislation at both local and national levels. Promoting equal pay, wage transparency, and comprehensive paid family leave can help level the playing field.
Training Programs: It is crucial to provide pathways for women to enter higher-wage and non-traditional fields through targeted training. Addressing biases in corporate cultures is equally important; the onus cannot solely fall on women to navigate these challenges.
Male Allies: We need male allies and leaders to hold themselves and their organizations accountable for creating cultural change regarding the treatment and compensation of the workforce.
Strict Enforcement: Ensuring strict enforcement of current anti-discrimination laws while evolving or creating new rules is vital for achieving genuine inclusion, protection, and equitable working conditions.
What Women Can Do
While systemic issues require collective action, women can take proactive steps to navigate and overcome barriers:
Negotiate Salaries: Seek out information and practice negotiation skills related to salary discussions. Preparing and getting comfortable with taking the initiative in these conversations is essential.
Mentorship: Find mentors and sponsors who can provide guidance and support and leverage those relationships for professional development.
Advocate for Development: Women should advocate for investments in their professional growth to enhance skills and qualifications, increasing competitiveness in the job market.
Support Each Other: Become advocates for other women in your industries, offices, and networks. Building strong relationships and breaking the women-on-women cycle of competition is crucial for holding leaders and organizations accountable at scale.
What Companies Can Do
Organizations have numerous strategies to help close the gender wage gap:
Pay Audits: Conduct and publish pay audits regularly to analyze pay structures and identify disparities. Companies like the tech giant Salesforce have committed to regular audits and investments to ensure equal pay for equal work. They have invested millions to address employee wage disparities.
Development Programs: Offer development programs to advance women and shift workplace cultures to address biases and discriminatory behaviors. Unilever has been recognized for its robust career development programs specifically designed for women, which, beyond establishing global pay audits and transparency in compensation practices, have been recognized as a model for others in the industry.
Family-First Policies: Promote policies that support work-life balance that allow both women and men to participate in family responsibilities. Netflix, for instance, offers 12 months of paid parental leave for all new parents, including adoptive parents.
Let’s not be discouraged by this set back. Instead we need to get motivated to continue our fight for gender equity, be vocal, challenge systemic bias, and promote fair workplace practices.
Thank you Lauren Buckley for your collaboration on this article.