Why You Might Make Less Than Coworkers

You might be equal to the colleague in the next office over and still make less money.  Here’s one reason – your gender.

One of my readers just shared a horrible story.  She works in a major accounting firm, and found out – definitively – that she’s making 20 percent less than her colleagues of the male persuasion.  “Women are relatively new to the accounting world, and there is a perception that management shouldn’t invest in people who are just going to have babies and leave,” she told me.  “The thing is, I don’t think my situation is that unusual – it’s still an old boys’ club.”

In a 2010 article for Harvard Business Review, Investigating the Pay Gap, Sarah Green says that the median salary of a woman is still only 78 percent of a man’s. This means that women have to work 16 months to earn what men make in a year.

Woe to New College Grads

According to the American Association of University Women, the gap between men’s and women’s salaries starts immediately after entering the workforce.  Just one year out of school, a woman earns 80 percent of what a man earns.  After controlling for industry, type of job, prior experience, and other characteristics, this gap closes to 95 percent.  The unexplained five percent gap is viewed as evidence of bias.  After 10 years, the average woman earns only 69 percent of what the average man earns, and the unexplained gap has widened from five percent to 12 percent.

Level and Age Don’t Help

Also as reported in the HBR article, The Center for American Progress went a step further and tracked wage gaps by age and occupation.  The organization found that by the end of their careers, male managers have made $635K more than their female peers.  Apparently, wage discrimination doesn’t get better as you get older, more seasoned, or better educated – it gets worse.  If you’re female, no matter how well you perform, your raise simply might not be as high as your male colleague’s.

Has anyone heard of a good strategy to combat wage discrimination based on gender?  I’d love to hear and share.














Alexandra Levit

Alexandra Levit’s goal is to help people find meaningful jobs - quickly and simply - and to succeed beyond measure once they get there. Follow her @alevit.

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  • http://radioventriloquist.blogspot.com/ Diedra B

    I think it’s good that some organizations have bands within which compensation for certain salaries should fall. That doesn’t eliminate the problem, however, it can cut down on gross discrepancies.

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    Anonymous Reply:

    @Diedra: I agree.  Some people rail against bands, but I personally find them helpful.

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  • Heather Krasna

    One of the reasons women make less than men is that they don’t know they can negotiate salary. This was substantiated by research conducted by the people who wrote the book “Women Don’t Ask.” By not negotiating one’s first salary, there’s an accumulative effect over the course of one’s career. Teaching women to just plain ask for more money is an essential piece of the puzzle. 

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    Anonymous Reply:

    Heather, I think you’re absolutely right, because once you get locked in at a certain salary, it can be difficult to move up substantially, especially within the same company. 

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  • http://www.glassheel.com Mary Tanner Wilson

    If anyone hasn’t read ‘Nice Girls Don’t Get the Corner Office’, I highly suggest it. (http://glassheel.com/book-reviews/nice-girls-dont-get-corner-office) Lois Frankel tells it like it is and makes some great tips about salary negotiation. Take a look!

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    Anonymous Reply:

    That’s one of my favorite books, Mary.  Thanks so much for reminding us!

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  • Aravind Ramachandran

    I’d say the difference in the median wages has a lot to do with the number of years people spend at the work place. The salary of an employee (usually) increases with time (whether at the same office or not), which means a 55 year old man/woman should be making significantly higher amounts of money than a 25 year old in the same industry, largely due to promotions and handling bigger responsibilities.
    IF there is a difference in the longevity of male and female employees in the workplace, that would very rationally explain the statistics. If the survey included a lot more males than females in the 40-60 year band, and a lot less males than females in the 20-40 year band, then naturally the median would change. It doesn’t necessarily suggest discrimination.

    Aravind Ramachandran, Journalist and Career Guidance Blogger

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