The Gender Pay Gap–Yes, It’s a Real Thing

80 cents to the dollar. You’ve probably seen this figure, used to illustrate the roughly 20% pay gap between women and men working in the US.

But is it really true that women are underpaid so dramatically? More than a third (36%) of Americans don’t think so, according to a recent poll of 8,566 adults. Men are particularly skeptical about the gender pay gap. Almost half (43%) of male respondents think that women and men are paid the same for similar work. Maybe worse, about half of males and a third of females think that the pay gap is an issue crafted purely for political purposes and that media coverage of the pay gap is either overblown or completely made up.

Why are Americans so divided on the pay gap? And who’s right — is the pay gap fact or fiction? Well, it’s complicated.

Sorting through the numbers

To start, we often hear that women make 80 cents for every dollar that men make. But we also often hear wildly different numbers ranging from 49 to 92 cents to the dollar. This can be confusing, cast doubt on the soundness of the data, or even create suspicions about fake news.

But the truth is, there isn’t a single objective way to quantify the pay gap. After all, we can’t observe how much a given female worker would make if she were male, or vice versa. So we have to compare how much female and male workers actually make, and then adjust the numbers for differences in women and men’s occupations, hours worked, and so on.

So how did researchers come up with the numbers? The common 80 cents to the dollar figure compares the earnings of women and men who work full-time, year-round jobs. But this leaves many workers out of the equation: those who work part-time or have months or years of not working at all. Most of these left-out workers are women, who still tend to be the ones taking time off and working reduced hours after child birth. When including all workers and comparing their earnings over a 15-year period, women make only 49 cents to men’s dollar.

But, you may ask, what if we compare women and men with the same qualifications working in the same jobs? First of all, training can’t explain much of the pay gap. Women actually tend to be more highly educated than men, but ironically, the more education women get, the more they are underpaid relative to men. That said, women have an average of 1.4 years less in work experience than men (probably the result of longer schooling and parental leave), and they tend to work in lower-paying career fields and occupations. All of these factors combined account for about 12 cents out of the 20 cents pay gap. So even when we adjust the statistics for differences in people’s backgrounds and jobs, women make only 92 cents for men’s dollar. This means that when a man gets paid $75,000 a year, an equally qualified woman gets paid only $69,000 a year for doing the same job. This loss in earnings amounts to the equivalent of 6 months of rent, 8 months of child care, or 9 months of food.

No matter how you slice it, the gender wage gap is real (check out this tool we at Riva built to see how much you would be making if you were the other gender*). But that doesn’t mean that you have to settle for less than you are worth. We founded Riva to empower everyone to negotiate their job offers and get fair compensation. So far we’ve been able to increase the offer of almost every client. On average, women who worked with us saw a compensation increase of 8% to 30% in their total compensation. If you want to find out how much more you’re worth sign up for Riva today.

* We recognize that gender is not a binary, but unfortunately the data allow us to compare female vs. male workers’ pay only.