The wage gap, also known as the “gender wage gap” or “gender pay gap,” refers to the disparity between incomes between men and women for doing the same work. The wage gap is also used to describe pay disparities between White workers versus Black and Latinx workers, as well as between workers in the United States versus other countries. This article focuses on the wage gap as it relates to gender and race in the U.S.

Key Takeaways

  • The gender wage gap typically refers to pay disparities between men and women doing the same work. There is also a racial wage gap.
  • Congress didn’t take major action to address the gender wage gap until the passage of the Equal Pay Act in 1963, although the slogan “Equal Pay for Equal Work” dates back to the 1860s.
  • The gender wage gap has narrowed over the years, but women still earn about 82 cents for every dollar that men earn.

Early History of the Wage Gap

Though the gender wage gap probably dates to the beginnings of civilization, it emerged as a political issue in the U.S. in the 1860s under the rallying cry of “Equal Pay for Equal Work.”

Among the movement’s most vigorous advocates were women’s rights activists Susan B. Anthony and Elizabeth Cady Stanton who made a case for bridging the wage gap in their newspaper, The Revolution, and in speeches such as “The Power of the Ballot to Bring Woman Equal Pay for Equal Work.”

Women eventually won the right to vote in the United States with the ratification of the 19th Amendment to the Constitution in 1920. Nevertheless, the wage gap persisted.

The 1940s: A Failed Attempt to Bridge the Gap

In 1944, Winifred Stanley, a Republican congresswoman from New York, introduced a bill titled Prohibiting Discrimination in Pay on Account of Sex. It would have amended the list of unfair labor practices in the National Labor Relations Act of 1935 to include discriminating “against any employee, in the rate of compensation paid, on account of sex.” Stanley’s bill never made it through Congress.

The 1960s: Major Strides for Equal Pay and Civil Rights

The next major attempt to address the inequity on a national level came two decades later, with the passage of the Equal Pay Act in 1963. It prohibited employers from paying male and female workers different wages for “jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.” However, it also allowed for several exceptions, including pay structures based on seniority or merit.

In signing the bill into law, President John F. Kennedy said that paying men and women different wages for the same work was “an unconscionable practice” and cited a statistic that “the average woman worker earns only 60% of the average wage for men.”

A year later, in 1964, Title VII of the Civil Rights Act also addressed the wage gap, broadening the law to make compensation decisions based on race, color, religion, sex, or national origin unlawful. As with the Equal Pay Act, there were multiple exceptions, including seniority- and merit-based wage programs.

The 1970s and 1980s: A Call for Comparable Worth

In the 1970s and ’80s, the concept of “comparable worth” or “pay equity” entered the national conversation. Its proponents called attention to wage gaps between workers in jobs that, while not identical, could be considered similar in terms of skills, responsibility, and value to the overall enterprise. Often, they argued, those gaps were a legacy of past discrimination.

“Many women and people of color are still segregated into a small number of jobs such as clerical, service workers, nurses, and teachers,” the advocacy group National Committee on Pay Equity explained. “These jobs have historically been undervalued and continue to be underpaid to a large extent because of the gender and race of the people who hold them.”

Eleanor Holmes Norton, chair of the Equal Employment Opportunity Commission during the Carter administration, singled out comparable worth as “the issue of the ’80s.” However, the Reagan administration, which came next, firmly opposed it. President Ronald Reagan reportedly called it “Mickey Mouse, a cockamamie idea...[that] would destroy the basis of free enterprise.” Pay equity and comparable worth made little progress on the federal level but did become law in several states.

The 2000s: Win Some, Lose Some

A 2007 Supreme Court case, Ledbetter v. Goodyear Tire and Rubber Co., led to the next major federal law. Lilly Ledbetter had sued her employer under the Civil Rights Act, alleging that it had underpaid her for 19 years. A jury awarded her more than $3.5 million, but Goodyear appealed, arguing that she had failed to file her suit within 180 days of when the discrimination first occurred, as prescribed by law. An appeals court reversed the original decision, and the Supreme Court also ruled against Ledbetter in a 5-4 vote.

Justice Ruth Bader Ginsburg, in dissenting, suggested that it was now a matter for Congress to take up, which Congress soon did. The Lilly Ledbetter Fair Pay Act, passed in 2009, expanded the period for filing a discrimination claim, making it easier for other women to sue employers they believed had discriminated against them. It was the first piece of legislation signed into law by President Barack Obama just nine days after his inauguration.

The most recent major legislative proposal to address the wage gap is the Paycheck Fairness Act, first introduced in 2009. Among other things, it calls for greater enforcement of anti-discrimination laws and increased penalties for violators. The Paycheck Fairness Act initially passed the House but failed in the Senate. In the years since then, it has been reintroduced several times, most recently in 2019.

Politicians and pundits on the left and right disagree about the size of the wage gap today, but most agree that it still exists.

The Wage Gap Today

Despite progress on the legislative front over the past 100 years, the wage gap has been slow to narrow. According to the U.S. Census Bureau, women working full time in 1960 earned about 60 cents for every dollar earned by men—the number cited by President Kennedy in signing the Equal Pay Act.

Though the numbers gradually inched up over the next 30 years, they didn’t reach 70 cents until 1990. In 2018, the latest year for which data is available, women were earning nearly 82 cents for every dollar earned by men, as shown in the graph below from the U.S. Census Bureau.

Female-to-Male Earnings Ratio for Full-time Workers
Source: U.S. Census Bureau, Current Population Survey, 1961 to 2019 Annual Social and Economic Supplements.

Investopedia

The top graph shows how the female-to-male earnings ratio has increased to 81.6% using 2018 dollars. The bottom graph illustrates the annual earnings of male and female full-time workers, showing that women earn $10,000 less than their male counterparts.

On the bright side, female full-time earnings have increased since 2000. Full-time female workers earned a median income of $40,156 per year in 2000, while in 2018, they earned just over $45,097, almost a 12.3% increase. However, full-time male workers earned a median income of $54,471 in 2000 while earning $55,291 in 2018, only a 1.5% increase.

Perhaps adding to the increase in female earnings is the fact that more women are working full-time. The table below shows a 21.7% increase in full-time female workers since 2000.

Increase in Male and Female Full-time Workers from 2000 to 2018
 2000 2018 Change % Increase
Male
(millions)
 59.619 67.220 7.601 12.7%
Female
(millions)
41.744 50.807 9.063 21.7%
Data from U.S. Census Bureau: Income and Poverty in the United States: 2018: Table A-7. Number and Real Median Earnings of Total Workers and Full-Time, Year-Round Workers by Sex and Female-to-Male Earnings Ratio: 1960 to 2018

The larger percentage increase in female full-time workers shows that more families rely on women for their full-time earnings. Yet, despite the rise in the number of female workers moving into full-time status, a disparity remains in the earnings ratio in which they earn nearly 82% of their male counterparts.

Gender Wage Gap by Race

The gender wage gap also varies substantially by race. According to 2017 data from the Department of Labor, Hispanic women earned just 53 cents for every dollar earned by white non-Hispanic men, while Black women earned 61 cents, White non-Hispanic women earned 77 cents, and Asian women earned 85 cents.

Gender Wage Gap Debate

Although these numbers are widely quoted, they are not universally accepted. Skeptics argue that the gender wage gap is actually much smaller, saying the numbers are distorted by, among other things, the fact that men tend to work longer hours.

It's true that more men work full-time jobs than women (according to the Census Bureau) and perhaps work longer hours as a result, which may lead to higher incomes. However, the stark increase of 1.4 million female full-time workers from 2000 to 2018 offsets that argument, at least in part. Despite more full-time female workers, women are paid 82 cents for every dollar a male earns.

Of course, not every job is created equal, and demographics should be considered. For example, a full-time job that pays minimum wage in the suburbs will earn far less than a job in the city for someone with a skill or college degree. Also, those who choose to work close to home to be near their kids might have fewer employment options, forcing them to take a lower-paying job.

However, those who advocate for closing the gender wage gap maintain that the gap is even worse because part-time and part-year workers aren't included in the comparison.

It's important to note that closing the wage gap doesn't necessarily mean that an increase in female earnings must come at the expense of male earnings. Still, few disagree that the wage gap exists, has been around for decades, and challenges remain as to how to close it.