In light of The World Economic Forum’s depressing report on the gender wage gap, I’ve decided to add salt to the wound and address the economic productivity lost to prevailing gender constructs in the workplace.
The gender wage gap isn’t just a social issue; it’s an economic issue. While women’s wallets may be a little lighter every first and third Friday of the month, the economic repercussions of unequal pay affect everyone.
Throw Back to 1955?
The 2015 report, titled Ten Years of the Global Gender Gap, found that women around the world are now earning what men earned in 2006. This is despite the fact that an extra quarter of a billion women have entered the workforce in the past 10 years.
Despite substantial gains made in the 1980s, strides toward gender equality in the workplace have stalled. Should we continue to progress at this hindered rate, we can expect the global wage gap to close in 118 years, in the year 2133.
As for working women in the United States, we fare better than most of our female colleagues around the world. According to our country scorecard, we take 28th place out of 145 countries scored – down from 20th in 2014 and erasing the small gain made from 2013 to 2014 (23rd down to 20th).
To be sure, we still earn an average of $82 for every man’s $100 in similar industries and education levels, which equates to working an extra two months every year for free. Keep in mind that more women now earn a college degree in the United States than men.
The cherry on top? Roughly 65 percent of women and 42 percent of men do not believe that most men consider women their equals in the workplace, according to a new poll from the Huffington Post.
The cost of inequality
It turns out that shortchanging women at work comes at a high economic price.
The U.S. economy missed out on approximately $447.6 billion in 2012 due to inequitable pay for men and women – nearly 2.9 percent of the 2012 GDP – according to a paper from the Institute for Women’s Policy Research. This figure trumps an $800 billion stimulus package passed in 2009 to bail banks out of the recession, which grew GDP by less than 1.5 percent.
When you expand this logic, we’ve likely lost out on well over $1 trillion in GDP from 2013 to 2015.
The paper, designed to “measure the gender wage gap and, more importantly, explore its ramifications,” also tied unequal pay to a higher rate of women living in poverty, according to online benefits hub benefitspro.com.
Evelyn Murphy, a scholar at the Women’s Studies Research Center at Brandeis University, claims the “stimulus effect” of closing the wage gap would be even larger when considering women’s spending habits. Given our traditional caretaker roles, we’d likely pump that extra money right back into the economy.
“The cumulative effect of closing the wage differential would be huge,” said Murphy in a 2012 interview with the Huffington Post. “Women who are paid fairly and paid what they’re worth will likely spend that money to support themselves and their families, because so many women live in poverty and need every penny they get in their paychecks.”
What can we do?
The issue of pay inequity often whittles down to a barring lack of transparency when it comes to salaries and, more generally, a taboo surrounding the discussion of money. Women simply aren’t aware that they’re being paid less than their corresponding colleagues and therefore don’t confront the issue.
What we are aware of, however, is the persistent wage gap. Working women should use this knowledge to their advantage, allowing the 82/100 ratio to embolden their professional decisions and ask for that raise or promotion instead of waiting for it.
“I tell my graduate students that by not negotiating their job at the beginning of their career, they’re leaving anywhere between $1 million and $1.5 million on the table in lost earnings over their lifetime,” explains Linda Babcock of Carnegie Melon in an interview with NPR’s Jennifer Ludden. Ludden also reports that men are four times as likely as women to ask for a raise.
There’s also the issue of income disparities between male and female-dominated industries, such as education and health versus finance and engineering.
Heather Boushey, senior economist at the Center for American Progress, recommended “developing more ways to either push women into higher-paying fields where the men are, or to make sure jobs women do hold are valued in the same way,” in a conversation with the Huffington Post’s Laura Bassett.
The road to gender equality is still a long one, as the Ten Years of the Global Gender Gap report makes abundantly clear.
We can attempt to use lost economic productivity as both an equalizer and a motivator, reminding our polarized nation that wage inequality isn’t just a women’s issue; it’s everyone’s issue.
Want to know how equal your country is? Click here.