Women need one degree more than men to earn equal pay, report finds

The study's co-author shares her tips for women in the workplace.

ByABC News via logo
March 1, 2018, 2:19 PM

— -- Women with equal education, the same college major and the same occupation as men earn only 92 cents for every dollar earned by men, according to a new report.

A woman needs one more college degree than her male peers to earn the same salary, the Georgetown University report found.

“Women have been sold a false promise that education is a solution or a pathway to opportunity,” Nicole Smith, one of the reports co-authors, told ABC News. “Instead, significant barriers still prevent women from earning the same as a man who is equivalently qualified.”

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A celebration of graduation with a sea of blue graduation caps and robes is captured in this undated stock photo.
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Smith, chief economist at Georgetown University’s Center on Education and the Workforce, and her co-authors examined data from the U.S. Census Bureau from 1976 to 2017 for the report, titled “Women Can’t Win.”

“The data shows that if you look at women with a bachelor’s degree and the average salary they’re making, women can earn just about as much as a man with an associate’s [two-year] degree,” Smith said.

The report’s authors concluded that women face pay discrimination but also fall victim to a culture that does not always set women up to pursue the most lucrative careers.

"To place all the blame of pay differences on women’s career choices fails to recognize the social structure that determines value," the report concludes. "Young girls and young women do not make choices in a vacuum about what to study and where to work. They make them under the influence of peers, family members, and adults who tell them, through words and actions, the subjects, majors, and careers that are acceptable for them to choose."

The report continues, "These influences inevitably inform their later decisions on careers. Stereotypes also underlie the decisions that are made to assign a certain dollar value to some kinds of work and different values to others: a female first-grade teacher, for example, usually makes less than a male video-game software developer. Sometimes people place no dollar value on work at all: for centuries, women have borne the brunt of everyday housework and caring for children and the elderly for no pay."

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A rear view of female graduates wearing graduation caps and gowns at campus is captured in this undated stock photo.
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The gender wage gap has narrowed from 57 cents on the dollar in 1975 to 81 cents in 2016, according to Census Bureau statistics cited in the report.

The “Women Can’t Win” report controlled for education, major and occupational choice to see how those factors affected the wage difference.

“It was a little bit surprising,” Smith revealed. “There is something about the socialization process where you’re really telling women that they have a certain place and you’re closing certain doors to them and we want to open doors."

She continued, “We are following in the footsteps of our predecessors, but we need to encourage our daughters, our girls, to branch out to different opportunities.”

The report, released this week, comes amid the #MeToo movement and headlines in Hollywood over pay disparity, most recently when actress Michelle Williams was paid less than 1 percent of what her male “All the Money in the World” co-star Mark Wahlberg received for reshoots of the film.

What women face in everyday jobs when compared side-by-side to men is not much different, according to Smith.

"If you both just graduated from college, have the same degree, are both dressed in suits and have the same briefcase, the man always has a little bit of an edge," she said.

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People stand in line while waiting to be interviewed in this undated stock photo.
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'It really isn’t the woman that needs to change.'

The gender wage gap is real, but it is not a problem that women should be left to solve, according to Serena Fong, vice president of strategic engagement for Catalyst, a global nonprofit organization that works with CEOs and companies to "build workplaces that work for women," according to its website.

"It really isn’t the woman that needs to change or is causing the problem, but it really is about breaking the barriers that are preventing women from advancing," she told ABC News. "Even if a woman negotiates and gets a higher degree, because the barriers are created by unconscious biases within the system and gender discrimination, she's still not going to be able to get ahead."

Fong said she was "not surprised" by the findings of the "Women Can't Win" report, adding, "The gender wage gap is real. It’s also something that can be solved, it just might not be quickly. It takes work."

Companies can move toward solving the gender wage gap by first conducting well-rounded internal pay equity studies and analyses to see where, and if any, gender wage gaps lie, according to Fong.

"If you have a team of 10 and there’s one woman on the team and nine men and you compare their salaries, there’s a good chance you’re going to be able to say they’re being paid equally," she said. "If you take that same team of 10 dominated by men and compare it to a team of 10 women and the women are on a team that is paid less, you still have a gender wage gap."

Companies can also take the step of establishing a "no-negotiations policy" on salaries to level the playing field and offer transparency.

"You're saying, 'Here is the job and this is what it pays and that’s it,'" Fong explained. "Studies have found that with negotiations, because of unconscious biases against women, women do get penalized."

A third step companies can take is to make sure they are conducting ongoing evaluations of their recruitment, promotion and talent development systems, Fong recommended.

The evaluations would include, in part, making sure job descriptions are written without gender biases and looking at the gender dynamics of the talent pool for promotion opportunities and of who is deciding on the promotions.

"Say you have an opportunity that is overseas and you have a male candidate and a female candidate, what can happen is a manager may say, ‘Oh, well, these two candidates are equally qualified, however the woman candidate has a family and won’t want to subject her family to that, I won’t offer it to her because I don’t want to put her in that position,'" Fong said as an example. "They’ll offer it to the man even if he has a family."

6 rules women are 'at the mercy of.'

The Georgetown report identified six rules women are "at the mercy of" if they want to compete financially with their male counterparts.

Rule 1: Get one more degree in order to have the same earnings as a man.

Rule 2: Pick majors that pay well, as major choice largely determines earnings.

Rule 3: If you major in liberal arts, get a graduate degree to attain middle-class earnings.

Rule 4: Negotiate your first paycheck well, as it will impact your lifetime earnings. The gender wage gap increases with age, peaking by early 50s.

Rule 5: Be careful with post-secondary vocational certificates because they have limited labor value market value for women.

Rule 6: If you don’t pursue a BA, consider getting an industry-based certification.

The report's findings should be a "wake-up call" for women, according to Smith.

"It's not necessarily a call for women to be discouraged and say, 'There is nothing I can do,'" she said. "It's more so a wake-up call for women to be proactive about how much they earn, about salary negotiations and to recognize their congressperson when they make decisions about equal pay."

Smith shared these tips for helping women overcome the gender pay gap.

1. Be open about your salary. You don’t have to go ask your coworker what he or she is making but knowledge is power. Look online at salary websites and see what the average is for your job in your area.

2. Make sure you negotiate well. The gender wage gap increases with age, so know your worth from the start. Go in there and know what the upper and lower limits of your salary range are.

2. Your college major matters. By the time you’re 18 or 19 years old and picking your major, that’s going to open doors for your future. Pay attention to what your career pathway and your earning potential can be from the major you select in college.