Why gender income inequality persists in the U.S.

[UNITED STATES] Gender income inequality continues to be one of the most persistent and widely debated issues in the U.S., despite decades of legal, social, and political progress toward gender equality. Though the pay gap between men and women has narrowed in recent years, women still earn less than their male counterparts across nearly all industries. Various factors contribute to this ongoing disparity, ranging from social conditioning and discrimination to structural economic barriers and career choices.

In this article, we will explore why gender income inequality still exists in the United States, the factors at play, and potential solutions for addressing this persistent issue.

The Current State of Gender Income Inequality

The gender pay gap in the U.S. has been steadily narrowing, but progress has been slow. According to recent data from the U.S. Census Bureau, in 2022, women working full-time earned 82 cents for every dollar earned by men, compared to 77 cents in 2018. This narrowing pay gap suggests that change is happening, but it remains significant. Factors such as race, age, and family status complicate the overall picture, with women of color experiencing a much wider pay gap than white women.

While legislation like the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964 has outlawed gender-based wage discrimination, these laws have not been fully effective in eliminating the pay gap. So, what are the underlying reasons why gender income inequality still persists in the U.S.?

1. Occupational Segregation

One key factor that perpetuates the gender pay gap is occupational segregation. Occupational segregation refers to the fact that men and women tend to work in different types of jobs, and the jobs typically dominated by women are often lower-paying than those dominated by men. According to a report from the American Association of University Women (AAUW), women are disproportionately employed in fields like education, healthcare, and social services, while men are more likely to be employed in higher-paying sectors such as technology, finance, and engineering.

Dr. Mary C. Daly, President and CEO of the Federal Reserve Bank of San Francisco, explains that "women's work tends to be underpaid because it is often seen as less valuable or requiring fewer specialized skills." For instance, teaching and nursing are essential professions, but they are often undervalued in terms of compensation despite the significant societal benefits they provide.

This occupational segregation contributes directly to the pay gap by funneling women into lower-paying industries. Overcoming occupational segregation would require a major shift in how society values different types of work and how individuals are encouraged to pursue certain careers based on their skills and interests rather than gendered expectations.

2. Discrimination and Bias

Discrimination is another significant factor in gender income inequality. Although the U.S. has made strides in legal protections for workers, gender-based discrimination continues to affect wages, hiring, and promotions. Unconscious bias is prevalent in many workplaces, influencing everything from salary negotiations to job assignments and opportunities for advancement.

As noted by Dr. Betsy Stevenson, a professor of economics at the University of Michigan, "There is still widespread discrimination against women in the workplace, particularly when it comes to hiring and promotion decisions. Women are often seen as less committed to their careers due to family obligations, even when there is no actual evidence of this." This bias leads to fewer women being promoted to higher-paying leadership positions, reinforcing the income gap over time.

Gender discrimination is also compounded by stereotypes. For example, women may be expected to perform "emotional labor" in the workplace, such as managing relationships or supporting coworkers, without receiving additional compensation. These expectations can limit women’s career growth and salary potential.

3. The Gender "Motherhood Penalty"

One of the most significant contributors to gender income inequality is the "motherhood penalty," which refers to the wage gap between women with children and women without children, and between mothers and fathers. Women who become mothers often face lower pay and fewer career opportunities due to assumptions about their commitment to work. These biases are often rooted in the expectation that women will prioritize family responsibilities over their careers.

The "motherhood penalty" is not only an economic issue but also a social one. Research shows that mothers are often seen as less competent and less dedicated to their jobs, leading to lower pay and fewer promotions. In contrast, fathers do not face the same type of scrutiny. According to a study published in the Journal of Marriage and Family, mothers earn an average of 4 percent less per child than women without children. In contrast, fathers tend to earn more after having children, a phenomenon known as the "fatherhood bonus."

"Motherhood is often viewed as a liability in the workplace," explains Dr. Claudia Goldin, a leading economist at Harvard University. "Mothers are perceived as being less available, less committed, and less productive, which directly impacts their income."

To address the "motherhood penalty," policy changes such as paid family leave, subsidized childcare, and more flexible working arrangements are critical. These measures can help reduce the negative impact that caregiving responsibilities have on women’s careers.

4. The Gender Pay Gap in High-Wage Occupations

Although women make up nearly half of the U.S. workforce, they are underrepresented in many high-wage professions, particularly those in science, technology, engineering, and mathematics (STEM). The gender pay gap is even more pronounced in these industries, where women often earn less than their male counterparts despite having similar education levels and job titles.

The lack of women in leadership roles in STEM fields is a well-documented issue. According to a 2018 study by the National Science Foundation, women make up just 28 percent of the STEM workforce, and women of color are even less represented. In these fields, the pay gap persists because of the unequal distribution of opportunities for career advancement.

"One of the biggest reasons women earn less in STEM is that there is a significant gender gap in senior positions," says Dr. Andrei Cimpian, a psychologist at New York University. "Women are not given the same opportunities for mentorship, promotions, or leadership roles as their male counterparts, which limits their earning potential."

To close the gender income gap in these fields, it is essential to encourage more women to enter STEM careers and ensure they have equal opportunities for advancement. Companies must prioritize diversity and inclusion and actively work to eliminate the barriers that women face in these industries.

5. The Impact of Negotiation and Salary Transparency

Salary negotiations are another factor contributing to the gender pay gap. Studies have shown that women are less likely than men to negotiate their salaries, and when they do, they are often less successful in achieving higher pay. This discrepancy in negotiation behavior may be due to social conditioning, where women are encouraged to be modest and not to "rock the boat."

The lack of salary transparency in many organizations exacerbates this problem. When employees are unaware of their colleagues' salaries, it is more difficult to identify disparities and demand equal pay for equal work.

"Women tend to undervalue their work and have a harder time advocating for higher pay," says Dr. Linda Babcock, an economics professor at Carnegie Mellon University. "Cultural expectations about how women should behave in negotiations—being less assertive or more accommodating—can result in lower starting salaries and slower wage growth over time."

Increasing salary transparency and offering negotiation training for women can help address these issues and empower them to advocate for fair compensation.

6. Structural Barriers in the Workforce

Finally, structural barriers such as lack of access to affordable healthcare, limited paid family leave, and the "glass ceiling" continue to prevent women from achieving pay equality. The "glass ceiling" is an invisible barrier that limits women’s access to top leadership positions and higher salaries, even if they possess the qualifications and experience.

"Despite women’s increasing participation in the labor force, they are still underrepresented in positions of power," says Dr. Sarah Kaplan, a professor at the Rotman School of Management. "This disparity in leadership opportunities is a major reason why women continue to earn less than men."

Without comprehensive reforms to workplace policies and structures, gender income inequality will likely persist.

While the gender pay gap in the U.S. has decreased in recent years, it is clear that many factors still contribute to the persistent income inequality between men and women. From occupational segregation and discrimination to the "motherhood penalty" and structural barriers, these issues must be addressed through concerted efforts from lawmakers, employers, and society as a whole.

As Dr. Claudia Goldin notes, "Addressing gender income inequality requires systemic changes in both societal expectations and workplace policies." By advocating for pay transparency, combating unconscious bias, and promoting greater access to high-wage industries for women, we can work toward closing the gender pay gap and ensuring that all individuals, regardless of gender, are paid fairly for their work.

In the end, achieving gender income equality is not just a matter of fairness; it’s essential for the long-term economic growth and social well-being of the country.