Menstuff® has compiled the following information on the Pay Gap.
The Gender Pay Gap
Are Women Catching Up in Pay?
"The Gender Wage Gap Lie"
"President Obama's persistent '77-cent"
"The Disappearing Gender Wage Gap"
Gender pay gap
Women, Education and Earning Power
Women creating pay gap?
You've Got a Long Way to Go, Baby
The Simple Truth about the Gender Pay Gap
Related Issue: Wealth, Wealth Gap
The Gender Pay Gap
On the face of it, the statistic may be accurate. But like many statistics in many areas, it doesn't tell the whole story.
In past years, several websites have explored the intricacies of the pay gap, looking at education, the kind of work done, seniority, marital status, and continuity of employment, among other factors. And the 23-cent gap shrinks and expands depending on who is looking at what. Here are some of the analyses:
Susan Adams in Forbes Are Women Catching Up in Pay?
Hanna Rosin in Slate: "The Gender Wage Gap Lie"
Glenn Kessler in The Washington Post: "President Obama's persistent '77-cent' claim on the wage gap gets a new Pinocchio rating"
June E. O'Neill in The National Center for Policy Analysis: "The Disappearing Gender Wage Gap"
But still the overall statistic - the 77-cents-on-the-dollar - is put forth as "Justice You Can Bank On" by the National Committee on Pay Equity, which provides an extensive "Equal Pay Day Kit."
Yes, real pay inequities and unequal opportunity exist and are perpetuated by people who profit from them or who just don't think women deserve equal treatment. Those situations are worthy of everyone's focus.
But taking a sledge-hammer approach to statistics doesn't help anybody. It blurs the focus and, at least in the popular press, fuels gender wars and prevents real progress.
Where does that leave us? We guys can flap our gums all we want, but the 77-cent figure has become a fixture and isn't about to go away. We may have few opportunities to address the issue as thoroughly as Adams, Rosin, Kessler, or O'Neill with those who consider the number to be unassailable.
There are many times when it's better to just shut up about an
issue. But this issue may be worth the effort and risk to speak up
Are Women Catching Up in Pay?
Crawfords group and the National Womens Law Center both sent me studies last week that analyzed 2012 Census Bureau data and underlined the 23-cent wage gap between women and men. The studies also broke down the gap in major metro areas and in the states. In some spots the gap was greater than the national figure. In Wyoming, for instance, women make 67 cents for every dollar earned by men, the biggest gap in the nation. Further, they looked at how non-white womens wages compared with white mens pay and they found even greater disparities. In Washington, D.C., for instance, African-American women make 53 cents on the dollar while Hispanic women make only 44 cents compared with white men. In the state of California, Latinas make 43 cents for every dollar earned by white men.
The Bureau of Labor Statistics, a neutral source, published figures in January that looked at weekly earnings by men and women, as opposed to annual pay, and found that women earn 79% of what men are paid.
Meantime, conservative groups like the Independent Womens Forum have also gotten in touch with me and insisted that the 77-cent number is a misleading statistic that doesnt take into account education levels, experience and the sorts of jobs men take versus women. For instance, more men are engineers, while more women are social workers. The Independent Womens Forum points to studies that back its contentions, like a 2010 study by a market research firm called Reach Advisors, that analyzed census data and found that in 47 of the 50 biggest U.S. metropolitan areas, the median full-time salaries of young women were 8% higher than for men in their peer group. In two cities, Atlanta and Memphis, the median salary for women was 20% more than for men. In New York City, it was 17% more. But theres a catch: The numbers only apply to unmarried, childless women under 30. Also if you look closely at the Reach Advisors study, it notes that most of the women in that age group are better-educated than the men.
This is certainly a realm of competing studies, and when you control for things like education, experience and job types, the gender wage gap does narrow. A study published in the Journal of the American Medical Association in June of 2012 looked at male and female mid-career doctor researchers who had roughly the same levels of education and experience. The study took into account specialty, academic rank, leadership positions, publications, and research time and found a gap of $12,194 in yearly salaries between men and women, or 93 cents versus a dollar. (That falls to 83 cents if you dont make all the adjustments for specialty, rank and research time.)
In addition, I wrote recently about a survey by Dice, a career website specializing in tech jobs, which found no gender pay gap in the tech sector if you control for education, level of experience and job titles. But the Dice numbers also show that in the big picture, women in tech make less than men. In the field overall, men still earn more than women, an average of $95,900 versus $87,500 for women. Still, thats only a 9-cent gap.
Were not trying to whitewash the fact that there may be a problem out there, says Independent Womens Forum director Sabrina Schaeffer. Were trying to keep it in proportion and not emphasize the notion that there is a dramatic disparity between what women are paid and what men are paid. Schaeffer adds that womens reluctance to negotiate for raises could explain some of the pay disparity.
Back in 1963, President Kennedy signed a law called the Equal Pay Act, an amendment to the Fair Labor Standards Act aimed at ending pay discrimination based on sex. At the time, women were making 59 cents on the dollar compared with men, according to government figures. Presumably that number was not calibrated for education, experience and job type. Now liberal groups are pushing a piece of legislation, the Paycheck Fairness Act, which has been stalled in Congress since 1997. Its key provision would prohibit employers from retaliating against workers who discuss their pay with coworkers. About half of workplaces have punitive pay secrecy policies, according to the National Partnership for Women and Families. Though to me it sounds like a commonsense measure, it seems like a small step to close a wide gulf.
What are we to make of the competing studies and arguments about whether sex and race discrimination exist in the workplace? I think its valuable to consider Schaeffers points, but to me, the big picture is the most important thing. As the National Partnership for Women & Families points out, 15 million women in the U.S. head their households and more than 30% of those families live in poverty. Those women dont have the luxury of going back to school and they arent in a position to change corporate policies that make it tough for women to get the time and the support they need to care for their children. The disparity in pay for African-American and Hispanic women is even more alarming and unfortunately, not easily fixed by further legislation.
I am hoping that the increased attention to this issue means that
young women will feel more motivated to earn degrees in fields like
engineering and economics that promise more lucrative careers. I hope
that women dont slow themselves down by buying into the
ingrained sexism that prevents them from trying to get promoted to
senior positions or to negotiate for higher salaries. At the same
time I support any womans decision to take time off from work
to care for children or other relatives. Schaeffers argument
has some merit, but I think there is no question that racism and
sexism still exist in the workplace. Im not sure that further
legislation is the fix to this problem. Heightened consciousness,
spurred by the debate were having on Equal Pay Day, can help
close the pay gap.
Source: Susan Adams in Forbes, www.forbes.com/sites/susanadams/2013/04/09/are-women-catching-up-in-pay
The Gender Wage Gap Lie
How many times have you heard that women are paid 77 cents on the dollar for doing the same work as men? Barack Obama said it during his last campaign. Womens groups say it every April 9, which is Equal Pay Day. In preparation for Labor Day, a group protesting outside Macys this week repeated it, too, holding up signs and sending out press releases saying women make $.77 to every dollar men make on the job. Ive heard the line enough times that I feel the need to set the record straight: Its not true.
The official Bureau of Labor Department statistics show that the median earnings of full-time female workers is 77 percent of the median earnings of full-time male workers. But that is very different than 77 cents on the dollar for doing the same work as men. The latter gives the impression that a man and a woman standing next to each other doing the same job for the same number of hours get paid different salaries. Thats not at all the case. Full time officially means 35 hours, but men work more hours than women. Thats the first problem: We could be comparing men working 40 hours to women working 35.
How to get a more accurate measure? First, instead of comparing annual wages, start by comparing average weekly wages. This is considered a slightly more accurate measure because it eliminates variables like time off during the year or annual bonuses (and yes, men get higher bonuses, but lets shelve that for a moment in our quest for a pure wage gap number). By this measure, women earn 81 percent of what men earn, although it varies widely by race. African-American women, for example, earn 94 percent of what African-American men earn in a typical week. Then, when you restrict the comparison to men and women working 40 hours a week, the gap narrows to 87 percent.
But were still not close to measuring women doing the same work as men. For that, wed have to adjust for many other factors that go into determining salary. Economists Francine Blau and Lawrence Kahn did that in a recent paper, The Gender Pay Gap..They first accounted for education and experience. That didnt shift the gap very much, because women generally have at least as much and usually more education than men, and since the 1980s they have been gaining the experience. The fact that men are more likely to be in unions and have their salaries protected accounts for about 4 percent of the gap. The big differences are in occupation and industry. Women congregate in different professions than men do, and the largely male professions tend to be higher-paying. If you account for those differences, and then compare a woman and a man doing the same job, the pay gap narrows to 91 percent. So, you could accurately say in that Obama ad that, women get paid 91 cents on the dollar for doing the same work as men.
The point here is not that there is no wage inequality. But by focusing our outrage into a tidy, misleading statistic weve missed the actual challenges. It would in fact be much simpler if the problem were rank sexism and all you had to do was enlighten the nations bosses or throw the Equal Pay Act at them. But the 91 percent statistic suggests a much more complicated set of problems. Is it that women are choosing lower-paying professions or that our country values womens professions less? And why do women work fewer hours? Is this all discrimination or, as economist Claudia Goldin likes to say, also a result of rational choices women make about how they want to conduct their lives.
Goldin and Lawrence Katz have done about as close to an apples-to-apples comparison of mens and womens wages as exists. (They talk about it here in a Freakonomics discussion.) They tracked male and female MBAs graduating from the University of Chicago from 1990 to 2006. First they controlled for previous job experience, GPA, chosen profession, business-school course and job title. Right out of school, they found only a tiny differential in salary between men and women, which might be because of a little bit of lingering discrimination or because women are worse at negotiating starting salaries. But 10 to 15 years later, the gap widens to 40 percent, almost all of which is due to career interruptions and fewer hours. The gap is even wider for women business school graduates who marry very high earners. (Note: Never marry a rich man).
If this midcareer gap is due to discrimination, its much
deeper than male boss looks at female hire and decides she is
worth less, and then pats her male colleague on the back and slips
him a bonus. Its the deeper, more systemic discrimination
of inadequate family-leave policies and childcare options, of women
defaulting to being the caretakers. Or of women deciding that are
suited to be nurses and teachers but not doctors. And in that more
complicated discussion, you have to leave room at least for the
option of choicethat women just dont want to work the
same way men do.
Source: Hanna Rosin in Slate, www.slate.com/articles/double_x/doublex/2013/08/gender_pay_gap_the_familiar_line_that_women_make_77_cents_to_every_man_s.html
President Obamas persistent
77-cent claim on the wage gap gets a new Pinocchio
This column has been updated
In 2012, during another election season, The Fact Checker took a deep dive in the statistics behind this factoid and found it wanting. We awarded the president only a Pinoochio, largely because he is citing Census Bureau data, but have wondered since then if we were too generous.
We also called out the president when he used this fact in the 2013 State of the Union address. And in the 2014 State of the Union address. And yet he keeps using it, as do many other Democrats. So now its time for a reassessment.
The Truth Teller video above also goes through the details.
Few experts dispute that there is a wage gap, but differences in the life choices of men and women such as women tending to leave the workforce when they have children make it difficult to make simple comparisons.
The president is relying on a simple calculation from the Census Bureau: a ratio of the difference between womens median earnings and mens median earnings. (The median is the middle value, with an equal number of full-time workers earning more and earning less.) That leaves a pay gap of 23 cents.
But the Labor Departments Bureau of Labor Statistics shows that the gap is 19 cents when looking at weekly wages. The gap is even smaller when you look at hourly wages it is 14 cents but then not every wage earner is paid on an hourly basis, so that statistic excludes salaried workers.
It is worth noting that the gap can go in the other direction as well. Heidi Hartman, president of the Institute for Womens Policy Research, noted that the gap widens to 27.6 cents if part-time workers were included. She also said that in a 2004 survey, IWPR calculated that across 15 years, prime age women earned just 38 percent of what prime age men earnedan apparent wage gap of 62 percent.
Since women in general work fewer hours than men in a year, the statistics used by the White House may be less reliable for examining the key focus of the proposed Paycheck Fairness Act wage discrimination. For instance, annual wage figures do not take into account the fact that teachers many of whom are women have a primary job that fills nine months out of the year. The weekly wage is more of an apples-to-apples comparison, but it does not include as many income categories.
June ONeill, a former director of the Congressional Budget Office who has been a critic of the 77-cent statistic, has noted that the wage gap is affected by a number of factors, including that the average woman has less work experience than the average man and that more of the weeks worked by women are part-time rather than full-time. Women also tend to leave the work force for periods in order to raise children, seek jobs that may have more flexible hours but lower pay and choose careers that tend to have lower pay.
Indeed, BLS data show that women who do not get married have virtually no wage gap; they earn 96 cents for every dollar a man makes.
In 2011, economists at the Federal Reserve Bank of St. Louis surveyed economic literature and concluded that research suggests that the actual gender wage gap (when female workers are compared with male workers who have similar characteristics) is much lower than the raw wage gap. They noted that women may prefer to accept jobs with lower wages but greater benefits (more flexible parental leave) so excluding such fringe benefits from the calculations will exaggerate the wage disparity. They also cited one survey, prepared for the Labor Department during the George W. Bush administration, which concluded that when such differences are accounted for, much of the hourly wage gap dwindled, to about 5 cents on the dollar.
A 2013 article in the Daily Beast, citing a Georgetown University survey on the economic value of different college majors, showed how nine of the 10 most remunerative majors were dominated by men:
1. Petroleum Engineering: 87% male
2. Pharmacy Pharmaceutical Sciences and Administration: 48% male
3. Mathematics and Computer Science: 67% male
4. Aerospace Engineering: 88% male
5. Chemical Engineering: 72% male
6. Electrical Engineering: 89% male
7. Naval Architecture and Marine Engineering: 97% male
8. Mechanical Engineering: 90% male
9. Metallurgical Engineering: 83% male
10. Mining and Mineral Engineering: 90% male
Meanwhile, nine of the 10 least remunerative majors were dominated by women:
1. Counseling Psychology: 74% female
2. Early Childhood Education: 97% female
3. Theology and Religious Vocations: 34% female
4. Human Services and Community Organization: 81% female
5. Social Work: 88% female
6. Drama and Theater Arts: 60% female
7. Studio Arts: 66% female
8. Communication Disorders Sciences and Services: 94% female
9. Visual and Performing Arts: 77% female
10. Health and Medical Preparatory Programs: 55% female
We do not want to suggest there is no pay gap. A report by the American Association of University Women found that, after accounting for a variety of factors, including college major and occupation, there was an unexplained seven percent gap one year after graduation. The gap then grew to 12 percent after ten years. But thats still nearly half the gap touted by the president.
The White House discovered that broad calculations of wages can yield unsatisfactory results. McClatchy newspapers did the math and reported that when the same standards that generated the 77-cent figure were applied to White House salaries, women overall at the White House make 91 cents for every dollar men make. White House spokesman Jay Carney protested that the review looked at the aggregate of everyone on staff, and that includes from the most junior levels to the most senior. But thats exactly what the Census Department does.
Betsey Stevenson, a member of the White House Council of Economic Advisers, acknowledged to reporters that the 77-cent figure did not reflect equal pay for equal work. Seventy-seven cents captures the annual earnings of full-time, full-year women divided by the annual earnings of full-time, full-year men, she said. There are a lot of things that go into that 77-cents figure, there are a lot of things that contribute and no ones trying to say that its all about discrimination, but I dont think theres a better figure.
Carney noted that the White House wage gap was narrower than the national average, but the White House actually lags the District average calculated by the BLS: 95 cents.
The Pinocchio Test
From a political perspective, the Census Bureaus 77-cent figure is golden. Unless women stop getting married and having children, and start abandoning careers in childhood education for naval architecture, this huge gap in wages will almost certainly persist. Democrats thus can keep bringing it up every two years.
There appears to be some sort of wage gap and closing it is certainly a worthy goal. But its a bit rich for the president to repeatedly cite this statistic as an embarrassment. (His line in the April 8 speech was almost word for word what he said in the 2014 State of the Union address.) The president must begin to acknowledge that 77 cents does not begin to capture what is actually happening in the work force and society.
Thus we are boosting the rating on this factoid to Two Pinocchios.
We were tempted to go one step further to Three Pinocchios, but the
president is relying on an official government statisticand
there are problems and limitations with the other calculations as
Source: Glenn Kessler in The Wsashington Post, www.washingtonpost.com/blogs/fact-checker/wp/2014/04/09/president-obamas-persistent-77-cent-claim-on-the-wage-gap-gets-a-new-pinocchio-rating
The Disappearing Gender Wage Gap
Comparing single childless women to single childless men, ages 35-43, the wage gap not only disappears, but instead becomes a wage premium. Nevertheless, Americans are likely to hear much about the much-exaggerated wage gap during the election campaign.
Accounting for the Gap. The National Longitudinal Survey of Youth (NLSY) administered to 11,406 civilian students in 1979 who were re-interviewed in subsequent years, offers a more precise understanding of the gender pay gap. Follow-ups to the original survey in 2000 (when participants were ages 35-43) and in 2008 (when they were ages 43-51) show that a number of factors influence male and female hourly wages. Employer discrimination is not an important reason for the apparent wage gap.
Schooling and Cognitive Skills. The Armed Forces Qualifying Test (AFQT) was administered to nearly all survey participants and serves as a proxy for basic cognitive skills contributing to occupation productivity. Combined with results from the NLSY measuring the level of schooling completed, these two factors explain approximately one half of a cent of the wage gap, decreasing it from 79.0 cents to 79.4 cents on the dollar.
Work Experience. Accounting for the fact that men tend to have better-developed occupational histories markedly reduces the gender wage gap:
In 2000, the average woman surveyed had about two years less work experience than the average man in military and civilian jobs combined.
Moreover, close to 14 percent of the weeks worked by women were part-time compared to 5 percent for men.
When this this variation in work experience is applied to 2008 wage data, the gender wage gap closes from 79.4 cents to 88.6 cents on the dollar.
Time out of Labor Force and Employer Type. Because child rearing and other family responsibilities fall disproportionately upon women, they are significantly more likely to leave the workforce for an extended period. Furthermore, women are more likely to seek employment at nonprofits or in government agencies employment which is associated with lower pay. These positions are usually more flexible and amenable to the needs of working mothers. Accounting for this difference, the wage gap further shrinks from 88.6 cents to 90.9 cents.
Accounting for the 21 Cent Gender Wage Gap 2000Career Choice. Women tend to work in fields dominated by women, in large part because these fields best satisfy womens dual careers as workers and household managers. This can include less stressful work environments (noise, strenuous activity, etc.), more flexible policies regarding time off, and a number of other factors. The inclusion of this variable further closes the wage gap from 90.9 cents to 96.7 cents.
Thus, of the 21-cent differential, 17.7 cents, or 84.3 percent of the total wage gap, can be explained by largely innocuous, non-discriminatory factors that have more to do with career and life choices than employers prejudices. [See the figure.] Thus the charge of wage discrimination based on the 77-cent statistic is grossly misleading.
In fact, the unadjusted average hourly wage in 2000 of single women who have never had a child was 7.9 percent greater than that of their male counterparts. This comparison implies that any wage gap is rooted more in social trends and tendencies than malicious discrimination by employers. It undermines the justification for government intervention to eliminate the wage gap.
Filling in the Gap. Advocates of the federal Paycheck Fairness Act claim that passage of the bill is a crucial step in gaining pay equity for women. The Act would require employers to justify pay differentials between men and women with similar job titles by requiring employers to prove that a standard qualification such as relevant work experience is a job-related necessity. Employees would also be empowered to propose alternative methods for setting pay more to their liking. Endless lawsuits would be further encouraged by provisions that fatten damages and make it easier to bring class action suits. Yet existing legislation including the Equal Pay Act of 1963 and the Civil Rights Act of 1964 and its amendments are surely sufficient to check discrimination.
The Act is unlikely to be voted on during this session of Congress. Democrats failed to get the 60-vote majority needed in the Senate to bring the bill up for a vote, and the House of Representatives is controlled by Republicans, who oppose the bill. However, gender pay discrimination is likely to be an election issue, even though it is based on a myth.
June E. ONeill, a former director of the Congressional Budget Office, is a professor of economics at Baruch College and an adjunct scholar at the American Enterprise Institute.
The analysis of the gender gap is from June E. ONeill and
Dave M. ONeill, The Declining Importance of Race and Gender in
the Labor Market: The Role of Federal Employment Policies
(Washington, D.C.: AEI Press, forthcoming August 2012).
Source: June E. ONeill, in The National Center for Policy Analysis, www.ncpa.org/pub/ba766
Forum: Gender pay gap myths
The Reuters report stands in stark contrast to the politically correct but empirically incorrect Associated Press story that blanketed the nation on April 23, 2007. The AP story was based on the advocacy press release of the American Association of University Women (AAUW) that claimed after one year out of college women earned 20 percent less than men and that the gap widened 10 years later to 31 percent. The AP did not tell the nation that statistical analyses accompanying the press release reduced the two purported gaps to 5 percent and 12 percent respectively (www.aauw.org/research/upload/behindPayGap.pdf ).
The comparison of the Reuters and AP stories leads us to four important questions. First, can we have full confidence in Associated Press stories? The answer clearly is no. Second, is there really a gender pay gap?
This answer here also appears to be no based on research published in America's most prestigious peer-reviewed Economics journal. Economist June O'Neill, the former director of the Congressional Budget Office, wrote an article titled "The gender gap in wages, circa 2000" in the May 2003 issue of the American Economic Review. By factoring in some of the many work-related differences between men and women such as hours worked per week, danger and travel requirements of the job, years of education, years in the field, and many other characteristics, she found the purported pay gap virtually vanished.
Further, a recent New York Times story titled "For young earners in big city, a gap in women's favor" portends a pay gap favoring women immediately following educational completion.
Third, is there really a boy and man crisis in education? Here the answer is an unqualified yes. While there are many "boy crisis deniers" in the media, they blindly follow ideology rather than empirical research reality. The basic facts of the boy and man crisis in education have been widely disseminated. Briefly, they are: Boys perform less well in school at all levels than do girls and have higher school drop-out rates especially in high school. In higher education, men at best constitute 40 percent of the undergraduate student population and university graduates, 25 percent of psychology graduate students, and 20 percent of veterinary medicine students. And, the list goes on with comparisons predominantly favoring women.
Fourth and finally, what does this all mean for the 2008 elections?
Candidates who seek the "women's vote" by continuing to promote the now discredited myths that women are yet again victimized in pay and education. What America needs, however, are credible candidates who can face empirical research reality and take action that is fair both to males and females.
Even if we call the wage gap controversy a draw in 2007, the boy and man crisis in education unequivocally portends an overwhelming gender wage gap favoring women in the immediate and continuing future. The Reuters report was on the money and should be viewed as the tip of the iceberg.
If candidates want the "male vote" as well as the votes of females who wish to have men intimately involved in their lives they will ignore P.C. Ideology, face squarely empirical research reality, and propose solutions favoring gender equality.
Gordon E. Finley, Professor of psychology at Florida International
University. His faculty Web site is: psych.fiu.edu/Faculty&StaffPages2/Finley/Finley.htm
Women, Education and Earning Power
That's a startling figure, considering how many women are in today's workforce. Close to 69 percent of women headed to work alongside 83 percent of men in the United States in 2005, according to compiled data by the Current Population Survey, U.S. Department of Labor and the BLS.
But even so, men, on average, earned at least $10,000 more than their female counterparts in 2005 -- this from U.S. Census Bureau reports. So why the pay gap? And, more importantly, what can women do to make up this inconsistency in pay?
Some say the solution is simple: Get educated, learn new skills, impress the boss and you're sure to add a few digits to your salary. When it comes to education, women are, in fact, the stronger sex. In autumn 2005 more than six million women enrolled in four-year institutions, compared with 4.7 million men, according to the most recent numbers from the National Center for Education Statistics. NCES data also shows that women outnumbered men in terms of earning associate, bachelor's and master's degrees.
The return on that education investment is high. Women who graduated from four-year colleges earned about 60 percent more than women with only a high school diploma in 2005, per the BLS. So if education is one step toward equalizing the gender earning disparity, where should women start if they want to get ahead?
Finding your focus
"The first thing you have to do is figure out what your values are, and understand that the ways to higher pay are about trade-offs," says Warren Farrell, the author of "Why Men Earn More: The Startling Truth Behind the Pay Gap and What Women Can Do About It". "The road to higher pay is a toll road. The discovery is finding out which tolls are worth it and which aren't."
When it comes to using education to increase earning power, Farrell says it's all about choosing the right subspecialty -- a niche market within an in-demand profession. As an example, Farrell points to visiting nurses, such as those who work for hospices. Even though the nursing profession is in high demand, nurses who are willing to travel can earn twice as much as traditional nurses.
Farrell says the field, rather than the degree, is often a better predictor of higher pay. Take recent data from the Center for Education Statistics, for example, which shows that in 2000, graduates with bachelor's degrees in engineering earned the most (close to $50,000) one year after graduation, while those with education degrees earned the least (less than $30,000) one year after graduation.
"A scientist is going to make a lot more than a language major," he says. "More important is that the choice of field not only predicts pay, but also the
Caring for your career
That sort of practical education planning buoyed Teri Fagan's paycheck. Fagan was working in accounting making $8.60 an hour when she and her family fell on hard times. A friend encouraged her to go to nursing school, but Fagan struggled on her own for four years before realizing additional education could improve her financial situation. The years she spent in school earning her associate degree were "scary," she admits, because "I was in the program full time, and the last year I was there, I only grossed $5,000."
The notion of having a better salary that would afford her a better life pushed Fagan through the program. And 2005 statistics from the BLS back up Fagan's goal: Women who held at least an associate degree earned 80 percent more than women who didn't pursue higher education.
"They asked us in class why we wanted to be nurses, and many people said they wanted to give and be compassionate. I'm afraid I was all about money," Fagan says. "But, I was intrigued by the thought of nursing. It's intellectually stimulating, and it has a lot to do with accounting in terms of math and judgment."
After earning her degree, she landed a job at Mission Hospital in Asheville, N.C., one of the top 100 hospitals in the nation. Since then, her salary has increased threefold.
Frances Altman had a good job and an even better salary, but she returned to her alma mater, Roosevelt University in Chicago, to earn her master's degree in communications because she felt it would help her keep pace with her peers in public relations. Altman isn't the only woman to have felt this way -- in 2005 more than 300,000 women aimed to increase their paychecks by enrolling in graduate programs, according to the latest stats from the NCES.
"I was running into more and more people who had [postgraduate] degrees," Altman says. "It became apparent that the additional consolidation of my education would be beneficial."
Though Altman had been employed with her company for 19 years, she was downsized. She earned her graduate degree, and eventually landed her current position as a public relations specialist for Virginia Commonwealth University's School of Business.
It was her degree, says Altman, that helped her maintain versatility in a continuously fluctuating job market. "You have to be watching for opportunities to reinvent yourself all the time," she says. "Maybe it seems public relations doesn't exactly fit in one area, and yet I began working in PR in education. I'm using all the same techniques, but now I'm working with alumni and teachers."
Knowledge is business power
If Erika Mangrum hadn't pursued an M.B.A., she may never have opened her own business.
Like Altman, Mangrum went back to school because she felt she needed to keep up with her colleagues. Although she had no intention of leaving her corporate job, her mock business plan, created for a school assignment, got her thinking.
Mangrum worked with one of her marketing professors for two years to create a business plan for a spa. As a result, she opened the first location of her Iatria Spa and Health Center in Raleigh, N.C. Seven years later, she opened three additional locations throughout the state.
Mangrum admits that she could have never been able to accomplish that at the large organization where she worked prior to her return to school.
"[After receiving my M.B.A.,] I had more self-confidence because I had a more well-rounded set of skills. I had a better network," she says.
There's no question that education directly increased Mangrum's earning power and professional freedom. In fact, she hopes to spread the wealth of her knowledge through an online marketing course at the University of California at Irvine that she began teaching in April 2006. "This enables me to give back, and that makes me happy," she says. "I'm more rewarded doing what I do now, because I can effect change better."
Closing the pay gap
Getting an advanced degree doesn't mean the boss will automatically respond with a raise. But the combination of education and experience can translate into better opportunities for women -- and better chances of closing the earning gap between men and women. Of today's workforce, nearly 33 percent of women ages 25 to 64 had academic experience under their belt in 2004, compared to 11 percent in 1970, according to the BLS.
"The career has something to do with it, there's no question
that's part of the deal," says Marsha Firestone, president of the
Women Presidents' Organization in New York, a nonprofit membership
organization of 1,000 successful female entrepreneurs who own and run
multimillion-dollar businesses. "But education is key for opening
Source: Jennifer Merritt, encarta.msn.com/encnet/Departments/eLearning/?article=womeneducationearning07
Women creating pay gap?
Are women helping create their own pay disparity? A new study suggests that may be the case.
Female professionals often charge less than their male counterparts for the same work, preferring a strong client relationship to higher pay, according to a study to be released this week at the annual meeting of the Academy of Management.
"Women view their pricing of a particular service as just one instance in a relationship where there will be many other services and many other pricing opportunities, as opposed to 'I need to make X profit on this transaction here,"' said Mary Gilly, a marketing professor at the University of California, Irvine, and a co-author of the study.
Analyzing the pricing patterns of 536 veterinarians, the study found female vets charged needier clients less than more affluent clients, while male vets set their prices regardless of a client's situation.
The widow discount?
The female veterinarians -- about one-third of the total group -- adjusted their prices because they cared more about their relationships with their customers than did the men, the study said.
The vets were asked to respond to a hypothetical scenario involving a 12-year-old dog with advanced kidney failure. The vets could offer treatment options to the hypothetical client, described either as a "young professional" or an "elderly widow." The female vets tended to charge the widow less.
In larger veterinary practices, however, female veterinarians charged higher prices, as they took into consideration the needs of their co-workers as well, the study said.
"Women ... take into consideration their customers, and they take into consideration their associates," Gilly said.
"For women, their relationships with customers matter, their relationships with people they work with matter, and it doesn't seem to matter for men," she said. "Men just price the same, regardless."
Separate research in 2003 found female mortgage lenders made $575 less per loan than their male counterparts. That study suggested women brokers were more concerned about establishing good relationships and being nice than men.
According to U.S. government statistics, overall, working women earn roughly 80 cents for every dollar a man makes.
The Academy of Management, a research and teaching organization,
has nearly 17,000 members worldwide. The study will be presented at
the group's annual meeting.