5 reasons Gender Wage Gap hurts everybody
Nobody benefits from Gender Wage Gap.
Experts define the gender wage gap as the difference between typical male and female (of the same productivity) earnings. In most countries, women earn less doing the same jobs than men. In many places, the difference is enormous (South Korea - 36,7%), in others it’s pretty slim (Slovenia - 2,9%).
If you want to find out how far from equal pay are other countries, you can try this Gender Wage Gap Calculator.
In the US, according to Washington Post, a typical woman earned $41,554 in 2016, while an average man earned $51,640 during the same period. Although compared to 2015 the gap narrowed, it still is a whopping 19,2%. And, according to Institute for Women’s Policy Research, the gap will still exist until at least 2059.
So, what does that exactly mean?
1. The secret lies in big numbers
$10,000 of a difference in earnings between women and men does not tell a whole story. If both women and men will work for at least 40 years of their lives, that means that when women retire, they will earn $400,000 less than their male counterparts.
If they put that money into a modest investment plan that grows 4% per year, they could earn close to a million dollars ($984,967, to be exact) just by putting that money aside.
And that’s the kind of money every marriage will need when both spouses retire.
2. Because of wage gap, women are concerned about their future
In their 20s, many women don’t experience the gender wage gap. ‘Young women think there is only a small pay gap now, but if they wait long enough, they will find there is one,’ said (quoted by CNBC) Catherine Hill from Association of American University Women.
But when women reach their 30s, they will start to see the difference in wages. An average 55-year-old woman earns just $76 to every $100 than a man of the same age does.
And that changes women’s perspective drastically because lower wages mean lower pensions and a lower standard of living which is very important when we retire. U.S. Congress Joint Economic Committee’s report on gender wage gap said that women aged 65 and older earn 44% (so almost a half!) of what men in the same age group do.
That, of course, puts more burden on men to provide a living for both.
A study done by Allianz Life showed that 53% of women are ‘very concerned or terrified’ that the rising cost of living will affect their retirement plans.
3. It enhances discrimination
That Joint Economic Committee’s report states that the gender wage gap is ‘caused by complex factors.' Some economists point out that employers are afraid to give women higher wages because they might get pregnant which supposedly will make them take a time out of work.
But all (more or, quite often, less rational) factors aside, 40% of the gender wage gap may be an effect of discrimination.
So in 40% cases, a woman earning less than her man colleague is just plain discrimination. But because the gender wage gap is very commons, society decided to normalize that.
4. It’s bad for the economy
According to a report from McKinsey, which estimates the effect of equal pay in every branch of the economy, by 2025 women would add $4.3 trillion to the U.S. GDP. It is a very generous estimation, but it shows what equal pay means for the economy.
In more restrained reports, like the one from Council of Economic Advisers, U.S. economy made $2.0 trillion more because of the progress made in the pursuit to equal pay (which still feels lethargic) since 1970.
5. It puts women in dire straits
Closing the gender wage gap won’t only benefit the economy as a whole (which doesn’t necessarily mean that it will benefit every citizen), but also almost every member of the society.
Joint Economic Committee’s report has a very simple summary: equal pay (and more women working full time) will lift many people out of poverty. More money gives people more incentive to finish higher education and eventually get better jobs and make the country better.
It applies not only to the U.S. but universally in the whole world.