Tag Archives: pay inequality

Motherhood Pay Penalty, Fatherhood Bonus

Michelle Budig

Michelle Budig

Having children increases men’s salaries by more than 6% and decreases women’s earnings by more than 4%, according to University of Massachusetts’ Michelle Budig.

Low-income women were most affected by the “motherhood pay penalty,” whereas low-income men were least affected.
In the U.S., this trend has massive impact because more than 70% of mothers are employed, according to the U.S. Bureau of Labor Statistics, and more than 40% of these mothers are the primary wage earner, reported the Pew Research Center.

Marital status and parenting situation significantly affect average salaries:  Married mothers in the U.S. earn 76 cents – 82 cents for every $1.00 earned by men.
In contrast, unmarried women with no children earn salaries more similar to men:  96 cents for every dollar a man earns,  according to the U.S. Bureau of Labor Statistics’ 1979 – 2006 National Longitudinal Surveys of Youth.
Low-income women fared worse: They lost 6 percent in wages per child, significantly higher penalty than average-income women experience.

Melissa J. Hodges

Melissa J. Hodges

Highly educated white and Latino men in professional jobs benefitted most from having children whereas less educated, unmarried African-American men working in manual labor jobs received less salary advantage, noted Boston University’s Melissa Hodges and Budig of UMASS.

Sara Harkness

Sara Harkness

In the U.S., the average gender pay gap has been decreasing, but the parenthood pay gap is increasing, reported University of Connecticut’s Sara Harkness and Jane Waldfogel of Columbia University.

Jane Waldfogel

Jane Waldfogel

They found that confirmed the impact of marital status on parents’ salaries:  Single mothers earned just over 83 cents compared to a single father’s US salary dollar.
Married mothers with at least one child under age 18 fared worse:  They earned 76 cents for each dollar earned by a married father.

One source of this wage difference may be hiring discrimination against mothers, argued Stanford’s Shelley J. Correll and Stephen Benard of Indiana University based on their study sending identical fictitious résumés to hundreds of employers.

Shelley Correll

Shelley Correll

Half the male and female “candidates” indicated membership in a parent-teacher association, whereas the remaining male and female credentials indicated no community involvement with a school.

Female résumés that included PTA membership were half as likely to be contacted for an interview, compared with female qualifications without this involvement.
In contrast, male résumés with this volunteer activity were contacted for interviews slightly more frequently than those that did not.

Stephen Benard

Stephen Benard

Correll and Benard also asked volunteers to act as “employers” and determine the salary for “job applicants.”
On average, participants offered mothers an average of $11,000 less than childless women and $13,000 less than fathers.

However, socioeconomic strata can buffer the motherhood penalty: Women in the top 10 percent of earners lost no income when they had children, and those in the top 5 percent received bonuses, similar to men.

Kate Krause

Kate Krause

Women who least can afford salary decreases experience the largest pay penalty for motherhood.
This inequity can be minimized by implementing measures suggested  Deborah J. Anderson, then of University of Arizona with Melissa Binder and Kate Krause of University of New Mexico:

-Flexible work arrangements (ROWE), although some research indicates that this type of flexibility can result in lower salaries,

-Widely-available, affordable, high-quality childcare.

These recommendations remain aspirational goals in many organizations, and until these structures are available to most employees, this pay differential may persist.

    • To what extent have you seen men’s careers benefit from becoming a parent?

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Equal Pay Act’s Fiftieth Anniversary: Progress but no Parity

Equal Pay Act 1963

Equal Pay Act 1963

When U.S. President John F. Kennedy signed the Equal Pay Act in 1963, women earned 59 cents for every $1 earned by a man.

Today women are up to 77 cents on the dollar, according to the U.S. Equal Employment Opportunity Commission Chair Jacqueline Berrien.
She noted that the wage discrepancy is even larger for African American women and Latinas.

Jacqueline Berrien

Jacqueline Berrien

Women MBAs graduating from top U.S. business schools in 2012 fared slightly better than the national average, with 2012 Stanford alumnae earning just 79 cents for every $1 earned by a male grads, according to Bloomberg Businessweek’s annual surveys of 24,716 recent MBA graduates from each year’s top 30 U.S. business schools since 2002.
Given the substantial investment of time, money, and effort in obtaining these advanced degrees, women graduates may question this Return on Investment (ROI).

Women from the MBA classes of 2012 averaged 7.3 percent less than their male counterparts with average salaries of $105,059.
This wage disparity is more than triple the 2.2 percent gap women MBAs experienced in 2012 on average earnings of $83,404.

The survey considered pay differences by industries and found women lagged behind men in pay in eight of 11 sectors in 2012, including accounting, finance, marketing, and operations.
The gap has increased across industries since 2002, even in non-finance fields like information technology and entrepreneurship.

The largest pay differential was in highly-compensated financial fields like venture capital and private equity field, where women earned only 82.5¢ for every dollar men made — about 10 ¢ less on the dollar than in 2002.
In contrast, consulting offered the closest pay parity in 2012, with women earning 99¢ for every dollar of male classmates’ salaries.

Women earned more than men in three industries: human resources, non-profits, and investment banking.
The first two industries tend to attract more women and be lower-paid than other fields.

EEOCBerrien, of the EEOC, opined that with the current backsliding in parity progress, the gender pay gap is predicted to close in another 44 years, in 2057 — provided that there is no further deterioration of pay equity advancement.

CB Insights reported that in California from January-June 2010:CI Insights Founder Gender - 2010

  • 89 percent of series A and seed-funded companies had all male founders, compared with only 8 percent that had founders of both genders, and just 3 percent of businesses with all female founders
  • 82 percent of company founders were white, compared to 18 percent that were Asian or Pacific Islander

Equal Pay DayThe 2013 Silicon Valley Index, compiled by economic think tank Joint Venture Silicon Valley found significant income disparities by race in addition to gender from 2009-2011:

  • African-American residents’ income dropped 18%, compared to a 4% decrease across the U.S.
  • Hispanic resident’ income decreased 5%, similar to the rest of California
Catherine Bracy

Catherine Bracy

Catherine Bracy observed that the average woman in Silicon Valley, California’s “economic powerhouse”, earns 49 cents for every dollar men make in Silicon Valley, when averaging incomes of African American and Hispanic women residents.

NerdWallet analyzed data from the U.S. Census for 366 metro areas to determine the lowest pay gaps for women in small, medium, and large cities, and concluded that on balance, Silicon Valley was one of the “best places for women to work.”

Wage discrepancy in one of the U.S.’s most economically viable areas, whether around the national average or well below, demonstrates that 50 years after the Equal Pay Act, the average female worker in the U.S. is far from earning an equal wage.

Happy Anniversary, Equal Pay Act of 1963, and Many Happy Returns of the day for at least 44 years, until women’s pay may be equal across industries and geographies.

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