On average, American women earn less than their male peers. Highly educated women fare worst of all.
A Wall Street Journal examination of pay in 446 major occupations found that women in many elite jobs earn well below men, with professions such as doctors, compensation managers and personal financial advisers among those showing the widest earnings gaps. (See an interactive graphic exploring the pay gap across 446 occupations)
The biggest gaps in many white-collar professions don’t easily lend themselves to legislative remedies. In fact, the Journal’s findings belie policy makers’ hope that the most-educated women would lead the way in shrinking the gap. Currently, more women than men graduate from college.
Wage transparency—requiring employers to report salary data—is “just not going to move the needle much,” says Claudia Goldin, a Harvard University economics professor and one of the country’s foremost scholars on gender and pay. Prof. Goldin found in a 2010 paper that men and women earned almost the same salaries right after receiving University of Chicago M.B.A.s. At least a decade after graduating, the women earned 57% of their male classmates.
The main factor, she and her co-authors concluded: Women became mothers, interrupted their careers and eschewed lengthy hours that generated higher paychecks. “These particular occupations,” Prof. Goldin says, “are not very forgiving of taking time off and having kids.”
The Journal’s analysis of Census Bureau data for the five years through 2014 found male doctors working full time earned about $210,000 annually on average. Female physicians made 64% of that, about $135,000 a year. Among personal financial advisers, men took in about $100,000 while women made about $62,000.
Many white-collar jobs give substantially larger financial rewards to those logging the longest hours and who job-hop often, phenomena that limit white-collar women who pull back for child-rearing. Researchers on the topic say ingrained workplace cultures also impede women’s earnings.
The gender pay gap has become a big issue in corporate boardrooms, state capitols and the 2016 presidential campaign. Executives and policy makers are weighing ways to bridge it, with ideas such as limiting employers from asking about salary histories and attempting to require wage transparency.
In elite tiers of business, employees aren’t seen as interchangeable and therefore earn premiums for working longer hours. “You work more hours, you work crazy hours, and you get not crazy-amount more—you get crazy-amount-squared more,” Prof. Goldin said in one lecture on the topic.
Women with bachelor’s degrees or higher earned 76% of their male peers in that group in 2014, according to the Labor Department. Women with less than a high-school diploma working full time earned 79% of male peers.
In some professions, such as pharmacists, Prof. Goldin says, there is greater pay parity because employers more easily substitute one worker for another.
Less-educated workers are also generally more interchangeable and often have less room to move up the pay scale, economists say, helping explain why those without college degrees have a narrower gender pay gap today.
That is a reversal from a generation ago. In 1980, female college graduates earned 68% of their male peers, while women who hadn’t graduated from high school earned 61% of theirs.
Factors narrowing the gap more quickly between blue-collar men and women haven’t all been happy. Much of it comes from the fact that those men lost ground when manufacturing jobs moved overseas and unionized work dried up. Between 1981 and 2011, the percentage of men covered by collective-bargaining agreements was cut in half, while women’s coverage fell only slightly, according to Cornell University economics professors Francine Blau and Lawrence Kahn.
The Journal analyzed Census Bureau earnings data for full-time year-round workers from 2010 through 2014. Across occupations, women made 79% of men on average. A Labor Department measure pegs the rate at 83% for 2014. Both include a slightly younger pool of workers than the education-specific figures.
Lag in finance
Of the 10 major occupation groups where women’s earnings lagged most, five were in finance.
Among personal financial advisers, who had the fifth-highest gap of any major profession, men outnumber women more than two to one. That imbalance prompted CFP Board, a national nonprofit group that certifies financial planners, to probe what it dubbed the profession’s “feminine famine.”
Its 2014 report found women were more likely to take guaranteed income instead of the greater payouts and risks that came with heavily commission-based jobs or owning their own firms. They had less experience than men in the field and were younger.
After the research controlled for experience, practice size and practice ownership, the women earned about $32,000 a year less on average, according to the study of more than 500 financial advisers. An advisory panel concluded gender discrimination and bias were among factors dissuading women.
“A male friend told me I had several strikes against me,” Lauren Lindsay, a financial planner at a firm in Covington, La., says she told the report’s author, “I was female, Yankee and not a great golfer.”
Cornell’s Prof. Blau, who began researching gender pay disparities in the 1970s, has analyzed wage data isolating the role of education, experience, occupation concentrations and other variables. She and Prof. Kahn estimate that about half the gap stems from women being more heavily clustered in lower-paying jobs and industries—not that they are paid less for identical work. Around one-sixth comes from men being on the job longer.
Just over one-third of the gap, she says, is from factors that can’t easily be pinned down, including potential discrimination. She says the true impact of discrimination could be lower, because her calculation lumps in other intangible variables, or higher because it doesn’t account for how discrimination may keep women from entering lucrative male-dominated fields.
Among those unmeasurable forces is that women are less likely than men to angle for higher pay, research shows.
Bettina Deynes, 43, a human-resources vice president in Alexandria, Va., says she didn’t negotiate a higher salary for her first five jobs in that industry. “I was always so thrilled to get the jobs that were offered,” she says, “that salary was a second thought.”
Before interviewing for her sixth job, as a city human-resources director, she sought negotiating tips and studied municipal-salary levels by digging through public tax filings. The city offered $130,000 a year; she countered with $140,000 and got it.
Among reporters, correspondents and news analysts nationwide, the Journal’s analysis of census data found women were paid 86% of men.
The union that represents Journal reporters and other workers at the paper’s publisher, Dow Jones & Co., in March released an analysis that says unionized women at Dow Jones earn about 87% of men. “We believe this is a problem, one that’s existed far too long,” says Tim Martell, executive director of the union. Dow Jones Chief Executive William Lewis told employees in emails that any pay disparity relating to gender is troubling and said the company has started reviewing compensation programs.
The doctor gap
The Journal’s analysis found physicians had the 11th-highest gender wage gap of major professions. Researchers say some of that comes from women’s greater concentration in lower-paying specialties such as pediatrics, while men are more prevalent in lucrative areas such as orthopedics.
Anthony LoSasso, a University of Illinois at Chicago health-policy professor, tracked starting salaries of physicians leaving New York state residency programs over a decade. Their choice of specialty, number of hours worked and structure of their employment didn’t account for the men’s earning $16,819 a year more than the women in 2008.
Nor did his theory pan out, in later research, that women were trading pay for jobs with more flexibility and fewer nights and weekends. Prof. LoSasso has yet to find a reason for the gap.
“I continue to be befuddled,” he says.
Family doctor Anne Montgomery saw her pay lag at various points in her career as she made trade-offs for her family. The 55-year-old, who runs a family-medicine residency program in Rancho Mirage, Calif., cut back to 80% of full time early on so she could care for her son.
“I actually pretty much worked full time my whole career,” the M.B.A. holder says. “I only got paid for part time.”
By 2009, she was earning $170,000 a year as a full-time faculty physician in Spokane, Wash. At that job, she was delighted to get an about $30,000 raise but irked it only brought her more in line with a newly hired male colleague who had aggressively negotiated.
Her husband of 12 years, family physician Glen Stream, had a smoother climb up the income ladder. He negotiated his pay as he ascended to earn a $275,000 base salary as chief medical-information officer of a Spokane multispecialty group. In 2012, his earnings approached $400,000 when he drew $190,000 as the American Academy of Family Physicians’ president plus three-fourths of his executive salary.
Last year, Dr. Montgomery earned $303,000, while Dr. Stream, 59, made $364,000 treating patients in California and running a national health-system improvement project. This year, the couple expects earnings to be about $360,000 each.
“I made choices that a man wouldn’t have been expected to make,” Dr. Montgomery says. “To get back up to speed takes awhile.”
Wage transparency hasn’t closed a particularly wide gap for the very people who set salaries in the workplace. Female compensation and benefits managers earn about $71,000 a year on average, or 68% of men’s about $104,000 annual average, despite outnumbering men more than three to one in the field, the Journal’s analysis found.
“We’re talking about the subset of the working world that has exponentially more access to salary data,” says Kerry Chou, a senior practice leader at WorldatWork, a human-resources association in Scottsdale, Ariz. “And still,” he says, “we have this gap.”
The Obama administration says lagging salaries and a dearth of family-friendly policies are exacerbating an outflow of women from the workforce, which is weighing on economic growth. “We’re leaving money on the table,” says Labor Department Chief Economist Heidi Shierholz, “as a country that could be providing crucial economic activity.”
The White House says large employers next year must provide salary data by race and gender, part of the Democrats’ push for wage transparency designed to spotlight unequal pay and spur employers to correct it. About 20 states are weighing equal-pay legislation, including a push to help women avoid being underpaid in new jobs by curbing employers’ ability to ask job applicants about their earnings histories.
Among the 2016 presidential candidates, Democrat Hillary Clinton wants to prohibit employers from retaliating against workers who size up their pay with colleagues, among other things.
Republican Donald Trump’s campaign hasn’t addressed the issue formally. Asked if he would support equal pay for women, he said in October in New Hampshire: “You’re gonna make the same if you do as good a job.”
Top Republicans have stressed that current law makes it illegal for employers to pay women less for equal work. “Women should receive equal pay for equal work, and while we have made progress, there is more work to do,” says Republican National Committee spokeswoman Lindsay Walters.
Economists and policy makers say a range of changes is needed to lift women’s pay across occupations, including expanding paid family leave and creating more affordable child-care options.
For top-tier workers, flexible schedules and making workers more interchangeable may have the biggest impact, economists say. More men need to take the paid paternity leave that is increasingly being offered by large employers since it helps women stay in the workforce. Research shows that having men shoulder more unpaid housework such as cooking and cleaning could also help unleash women’s earning power.
Novel solutions are playing out locally. In September, Boston began offering free salary-negotiation workshops to every woman in the city, with the goal of training 85,000 women in five years. About 1,000 women have participated.