Wage Inequality: The Post About Things You Already Know

“We need to stop buying into the myth about gender equality. It isn’t a reality yet. Today, women make up half of the U.S. workforce, but the average working woman earns only 77 percent of what the average working man makes. But unless women and men both say this is unacceptable, things will not change.” — Beyoncé

TL;DR — Women are underpaid. So are minorities and LGBTQs. Nothing new, but we need to continue to close the gap.

The Wage Pie: A Story of Unequal Slices

At a basic level wealth building performs very much like a trinity; it really involves three core elements: income, saving, and investing. Although saving and investing serve as two vital pillars of wealth generation, income also plays a major role in the big picture. Less income, less savings. Less income and less savings equals less investing. Less investing leads to less wealth.

That’s why Hired’s research on “Women, Work, and The State of Wage Inequality” is so disheartening. Fact of the matter is that, other demographics, especially women, get paid less than white males for doing the same exact work in the tech industry. And it can be inferred that this is a universal trend. I’m sure many readers are thinking, “Well Garrett, tell us something that we don’t know.” Here it is: women aren’t expected to get the same wage as men until 2152! That might as well be light years away.

In a nation where more women are becoming the breadwinners of households, wage inequality flat out doesn’t make sense. Women are more likely to go to college and are often high performers at companies. And the implications of wage inequality touch a much broader scope than just a bi-weekly payroll. Wage inequality is a direct result of bias and inefficiency in the job market.

But who’s the most underpaid within this group? Black women. For every dollar that a white male makes for a comparable role, a black woman only receives $0.79. That may also not be a surprise. Maybe that’s why black women are the fastest growing groups of entrepreneurs in the nation. They understand that in order to get paid fairly, they have to write their own checks.

In the men’s category, can anyone guess who makes the least bank? You may have guessed right! Black men. For each dollar that a white male makes for a comparable role, a black man only receives $0.88. This inequity between white males and everyone else hurts job retention and ultimately creates a less inspiring work environment. LGBTQs are also slighted in their salaries.

What are some of the drivers of wage inequity?

It all boils down to a couple reasons:

Women, minorities, and LGBTQs typically ask for less than white males for the same exact position

  • Wage inequities over time accrue and may cause certain groups to ask for less — denied raises, bonuses, or promotions.

Employers often base salaries off of the candidates previous salary — “The Domino Effect”

  • Someone who was underpaid and undervalued at their last job will more than likely be shortchanged at their next gig, regardless of the role or impact.

For younger income earners, it may be easier to reverse the trend by understanding the job market, knowing your worth, and using tactful negotiation. For older folks, I know that it’s a bit harder to get out of the trap.

So, what’s the solution? Is there one? We all know that there won’t be an overnight shift. Over time, wage gaps likely will close, or at least that’s the hope. But what can folks do now?

Near-term Actions:

  1. Know your market — the average salary for any given role is pretty easy to find online. Don’t settle for pay below the average. Learn negotiation. Gain leverage by having other opportunities on the table.
  2. Know your value — if your impact is higher than the average, request for a salary larger than the average. You have the tangible results to back it up.
  3. Hold your employer accountable — make check cutters aware that their current system is unfair and should be improved.

Long-term Actions

  1. Commit to becoming an employer that can set their own salary.
  2. Also, make a commitment to having fair wages — it’s in your power.

If you’re a part of one of the lesser paid groups, it’s within your power to take action. Action will forge more wage equality over time. Continue to shine at work and request to be rewarded when you do. Make a pledge to be an employer one day. If you’re an employer, begin investigating the framework that you use to calculate salaries. It may need to change. These actions will make our nation better in the end.


What are your thoughts on wage inequality? Please take a second to share your thoughts. Also, feel free to share this post to keep the discussion going.