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It’s Time To Fix The Graduate Gender Pay Gap

It’s a well-documented fact that women—and women of color in particular—earn less than men.

And while obtaining an advanced degree can open the doors to many career opportunities, it doesn’t necessarily lead to equal pay for women.

In fact, research shows that within one year of graduation, males earn 8% more than females and, within 10 years of graduation, they earn 31% more.

Let’s review how the pay gap is measured, what factors affect compensation inequity linked to gender, and how recruiters and employers can tackle the problem during the hiring process.

The Problem: Female Earn Less Than Males After Graduation

The uncontrolled pay gap is a measure of the ratio of the median earnings of all female workers to all male workers, regardless of job title, experience, or other factors. As of the latest PayScale “The State of the Gender Pay Gap in 2020 Report,” that gap is $.19, with women earning $.81 for every $1 men make. Since 2015, that gap has shrunk by $.07, with women’s earnings up from $.74.

The controlled pay gap is a measure of the ratio of earnings of females to males, with job title, years of experience, industry, location, and other factors related to compensation all being equal. Even when controlling for these factors, there’s still a $.02 pay gap, with women making $.98 for every $1 men make, according to the same PayScale report. Since 2015, that gap has shrunk by $.01 from a lower ratio of $.97 to $1.

Accounting for race as a factor, women of all races and ethnicities earn less than White men, with the largest uncontrolled pay gap experienced among Native American and Alaskan Native women, Black women, and Latinx women who earn $.75 for every $1 White men earn, per PayScale – compared to the overall $.81 for women regardless of race, $.81 White women earn, and $.95 Asian American women earn. When factors are controlled, Black women earn $.97, Latinx and White women earn about $.98, Asian American women earn $1.02, and Native Hawaiian and Pacific Islander women earn $.99.

The Causes: Why Females Aren’t Compensated Fairly

#1: Sexism

The known problem of bias in recruiting has been shown to impact hiring decisions, and, ultimately, pay. And gender is one key factor that can unfairly impact someone’s chances of landing a job. One likely cause of the gender pay gap has nothing to do with the types of jobs women and men have and instead has something to do with workplace sexism, according to the Pew Research Center, citing the following stats about workplace inequity:

  • 42% of women have experienced gender discrimination at work, versus only 22% of men say the same
  • 25% of women say they’re earning less than men doing the same work, versus only 5% of men say the same

#2: Inequitable Distribution of Childcare Responsibilities

Historically, women have had an outsized burden when it comes to caregiving, and that has, in turn, impacted their careers, explaining part of the pay gap.

#3: The Opportunity Gap

With greater representation at higher levels comes more pay, but women aren’t given equal opportunities to advance. While women and men often start out at generally equal levels, that doesn’t stay the case.

In 2020, roughly 75% of men and 76% of women in their 20s held non-managerial roles, but by age 30 to 44, more than a third (36%) of males are able to progress to the managerial level while less than a third (30%) of women do so, according to PayScale’s report. Things are worse at the director level, with twice as many males represented by age 45 or older. The C-level is that last glass “C-ling,” with only 6% of women represented versus 12% of men advancing to this stage.

The Solution: Address the Problem During the Recruiting Process

Companies looking to get things right from the get go should start with how hiring gets done. When employers focus on applicant performance rather than gender, women and candidates of color benefit, and leveraging AI in recruiting can help. In fact, companies such as Accenture and Smiths that have partnered up with our team at Headstart to eliminate bias in the hiring process, have seen a 5 point increase in female hiring.

Find out more about how Headstart can help your campus recruiting team increase gender equity and save with automation. Book your free demo today.

Headstart is on a mission to transform the way organisations hire! We are the world's first diversity driven Applicant Matching and Management System. We use Machine Learning and Data Science to transform the recruitment process, enabling clients to find the right high potential employees regardless of gender, ethnic status, sexual orientation or age.

With major brands like Accenture publicly supporting our mission, Headstart is already improving the recruitment experience for candidates around the world.

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