How to Fix the Gender Wage Gap: Going Far Beyond an App

By Bryce Covert |

To change the wage gap, we have to change systemic problems like unionization, work-family policies, and gender segregation.

The first piece of legislation that President Obama signed into law after being elected was the Lilly Ledbetter Fair Pay Act. The Act expanded the statute of limitations for cases alleging pay discrimination based on gender. Yet three years after the signing, the gender wage gap has barely budged. It remained statistically unchanged, with women earning 77.4 percent of what men make.

Obama mentioned this gap briefly in his State of the Union and followed up with a video message about the necessity of ensuring that women make the same as men for equal work. The White House also has an Equal Pay Enforcement Task Force, whose mission is to address loopholes in existing legislation, coordinate the many offices and efforts to enforce current laws, and seek more information on the gap for the public and the government to take more action.

The Task Force announced an Equal Pay App Challenge this week asking for “help in building innovative tools to educate the public about the pay gap and promote equal pay for women.” To help with the challenge, Salary.com is releasing its collection of salary data for more than 4,000 jobs for the first time in its history for use in the app. “Knowing what your job pays is an integral part of negotiating a fair wage,” said general manager Abby Euler.

According to IWPR, nearly half of all U.S. workers are either contractually forbidden or strongly discouraged from discussing their pay with coworkers. While there isn’t a direct link between pay secrecy and the wage gap, the gap persists despite the fact that the Equal Pay Act of 1963 prohibits employers from paying women less than men (and vice versa). As IWPR writes, this is in many ways because “in practice, employer policies regarding pay secrecy, including threats of retaliation, make it difficult for workers to discover pay discrimination and effectively use these rights.”

So an app that better allows employees to find out salary information could have an impact on closing the gap. But unfortunately, solutions like these won’t address the entire problem, because its roots are systemic. To seriously take action that changes the wage gap, President Obama and Congress would have to look at a variety of solutions, many of which are politically unpalatable.

For starters, unionization is associated with a lower pay gap. The gap starts to close among men and women who belong to a union compared to those who don’t — unionized women earn 87.8 percent of men’s wages versus their non-union counterparts who earn 79.9 percent. IWPR’s research shows that unions also help to reduce pay secrecy: half as many unionized workers as nonunion workers are discouraged or prohibited from sharing that information with coworkers. But unionization rates have been flat in recent years and have fallen significantly in recent decades. And more men than women are unionized. That gap has been shrinking since the 1980s, but mostly due to a falloff for men. Increased unionization could be a powerful tool for women to use against employers who discriminate in pay, but the trend in the country is going in the opposite direction.

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At a more fundamental level, our policies to support mothers in the workforce are pitiful compared to other developed countries, yet they have a huge impact on the wage gap. Three-quarters of the women entering the work force will get pregnant on the job, but family leave and childcare policies barely exist.

For instance, a recent Census Bureau analysis found that about half of working first-time mothers got no paid leave to have their babies. The share of women given time off for pregnancy, birth, and childcare has leveled off. Yet a recent Rutgers study shows, “Paid family leave increases wages for women with children.” Women who take leave lasting for a month or more are 54 percent more likely to have wage increases the following year than those who don’t take any leave.

Along similar lines, a UC Berkley study of California’s childcare support system found that early care and education systems have much to do with the ongoing wage gap. It says:

Better pay and benefits are correlated with a continuous work history. Workers’ careers are disrupted because of child care failure — care that is unreliable, unaffordable, or just unavailable — and these workers are usually women (Hofferth & Collins 2000). Periods of non-employment lead to lower wages because of “skill depreciation,” loss of seniority, and sometimes being less likely to receive further training or mentoring due to questions of commitment (Kimmel 2006, p.79).

In other words, childcare allows mothers to keep showing up at work and not have to leave jobs to care for their children. That means their wages won’t be damaged for the theoretical loss of skills during those gaps.

The wage gap is also perpetuated by occupational segregation by gender. IWPR’s research shows that “irrespective of the level of qualification, jobs predominantly done by women pay less on average than jobs predominantly done by men.” In fact, female-dominated occupations make only 66.9 percent of the wages in male-dominated ones at high-skill level, 79.8 percent at the medium-skilled level, and 73.8 percent at the low-skill level. Yet while there was a steady trend toward better integration of women into men’s fields (and vice versa) during the 1970s and 80s, there hasn’t been any progress since the mid 1990s.

It would be nice if we could just enforce existing laws, get better informed, and therefore make the gap disappear. But the wage gap is far too entrenched for that. It will take addressing underlying issues women face in the workforce — like union representation, work-family policies, and gender segregation — to make progress on the pay gap.

Bryce Covert is Editor of New Deal 2.0.

Bryce Covert is the former Editor of Next New Deal and current Economics Editor of ThinkProgress.