The Gender Wage Gap Won’t Close Until 2152

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Equal pay for women? Not in this lifetime.

According to a new report from the American Association of University Women (AAUA), the pay gap may have narrowed considerably in the past 100 years, but it will still take another 136 to do away with it entirely.

In 2015, women working full-time in the U.S. were typically paid just 80% of what men were, creating a sizable 20% wage gap on average, AAUA said. Since 1960, that gap has narrowed thanks to women’s progress in education and their growing participation in the workforce. But in recent years, women’s progress has stalled, and if things continue to progress at this slower rate, “women will not reach pay equity with men until 2152,” AAUA warned. Here’s what that could mean for your money.

The Financial Effects of the Pay Gap 

As the AAUA pointed out, an average 20% pay gap affects women’s finances in myriad ways. For starters, it contributes directly to their poverty, which could be seen as recently as 2015, when 14% of women between the ages of 14 and 64 were living below the federal poverty level, compared with 11% of men, AAUA said. For those ages 65 and older, 10% of women were living in poverty, compared to 7% of men.

The damage persists well after a woman has left the workforce, AAUA said. When women retire, “they receive less income from Social Security, pensions and other sources than do retired men,” and other benefits such as disability and life insurance are smaller, since they’re typically based on earnings.

Broken down by demographic, the pay gap disproportionately affects women of color more than non-Hispanic white women and women of Asian heritage, AAUA said. And though the earnings and pay gap do vary according to a woman’s unique situation, they “persist across educational levels and [are] worse for African American and Hispanic women, even among college graduates,” AAUA said. The implication for student loan debt is concerning, since women working full-time in 2012 had a tougher time paying off their loans, on average, than men who were working full-time.

A Matter of Choice 

Personal choice also plays a key role in the pay gap. “In 2015,” AAUA said, “the U.S. civilian workforce included nearly 149 million full- and part-time employed workers; 53% were men, and 47% were women … But women and men tend to work in different jobs.” There are more women in education, office, health care and administrative support roles, AAUA said, while men are “disproportionally represented” in production, transportation, maintenance and repair roles. This means segregation is a factor, especially since the jobs associated with men tend to pay more than those occupied by women, despite requiring similar levels of skill.

While gender segregation has decreased in the past 40 years, AAUA said, women in male-dominated jobs still face other obstacles like being paid higher salaries and breaking into a historically male field in the first place. There is also the issue of parenting, which can require taking time off work or cutting back hours, which puts women with children in a tough spot. The so-called “motherhood penalty,” which goes beyond actual time taken out of the workforce, can hinder a woman’s chances of landing full-time employment.

Beyond these factors, some employers are just plain biased, and a woman’s choice of college major, occupation, work hours and time out of the workforce may have nothing to do with her odds of securing fair pay, the report said. Women are less likely to land leadership roles, AAUA said, and, of course, “gender bias also factors into how our society values some jobs over others.”

So What Can You Do? 

With all these factors in mind, how can modern-day women protect their finances? The odds certainly seem stacked against it, given the factors above. But there are ways to counter the problem. A budget can help you stay on top of your day-to-day finances without going into debt, while putting aside whatever you can afford can beef up your savings for the long term. It also helps to know where your credit stands, as this can give you a glimpse into the health of your finances. (You can view two of your free credit scores, updated every two weeks, as part of your credit snapshot on Credit.com.)

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The Wage Gap Really Widens When Women Hit This Age

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It’s no secret that women often make less money than men, but a new study discovered there’s a certain age when that problem escalates.

According to a gender equity report from Visier, a workforce analytics firm, the gender wage gap in America widens around age 32. The study found this is the time when women are earning 90% of men’s wages. That number decreases to 82% in just eight short years — by age 40.

“Every CEO should be looking at gender equity,” John Schwarz, Visier founder and CEO, said in a press release. “Countless studies have shown the equal economic contribution women make in the workforce, yet companies have struggled to achieve the goal of equity in compensation.”

According to Visier’s study, which used information from its database of 165,000 U.S. employees from 31 companies, the age of 32 is a time when men typically start being promoted to managerial positions and earning an average wage two times the wage of non-managers. This is also when many women leave the workforce, take time off for maternity leave or even face discrimination in promotion decisions.

The study points out that paying women and men equally for the same position is integral to closing the gender wage gap. But so is fixing what the study calls “the manager divide” by having a stronger representation of women in managerial roles, which could reduce the wage gap to 10% across all age groups, the report said.

How Income Affects Your Credit

No matter how much you earn or your role, your paycheck won’t directly affect your credit scores. But having more money coming in can make it easier to pay credit card debt or other bills you may have. This can help you maintain a strong payment history, which is a major factor in establishing your credit scores. (To find out how your spending and payment habits are affecting your credit, you can see two of your free credit scores, updated each month, on Credit.com.)

If you aren’t happy with what you see, there are ways you can work on improving your credit score. This can include paying down debt and disputing any errors you find on your credit reports.

[Offer: If you need help fixing errors on your credit report, Lexington Law could help you meet your goals. Learn more about them here or call them at (844) 346-3296 for a free consultation.]

 

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Is There a Student Loan Gender Gap?

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At first glance, it appears that student loan debt does not discriminate — today, 40 million Americans have at least one student loan account, with total loan debt at about $1.3 trillion. But new research suggests that women may actually have a harder time paying back these loans.

According to a study from the American Association of University Women (AAUW), based on data from the U.S. Department of Education, women who graduated in the 2007-08 school year have only paid off, on average, 33% of their student debt. Men who graduated that same year, meanwhile, have paid off an average of 44% of their student loans. And the difference gets even more pronounced for black and Hispanic women, who have paid less than 10% of their debt in the same time period despite working full time.

What’s Causing the Disparity?

Blame these struggles on the wage gap, AAUW said.

It’s been widely reported that woman today still earn only 77 cents for every dollar a man earns, and an earlier report from AAUW found that women who are one year out of college and working full time are paid, on average, just 82% of what their male counterparts are paid. This disparity in income can make it much harder for woman to achieve many of their financial goals — like buying a house, saving for retirement or paying off their college education, AAUW said. Moreover, the effects may be cyclical.

“The gap in debt repayment may also make it more difficult for women to take risks that could pay off in the long run, like changing job sectors or starting a business, further contributing to the pay gap as women move through the workforce,” AAUW said in a news release.

Dealing With Student Loan Debt

Unfortunately, addressing mountains of student loan debt — on top of a systemic wage gap — can be tricky. The escalating cost of higher education makes it difficult to avoid borrowing for college and, once on the books, student loans are very rarely discharged in bankruptcy.

Still, beleaguered borrowers may be able to ease their burdens by looking into income-based repayment options, student loan forgiveness programs, default rehabilitation or, even, refinancing with a private lender. (Remember, if you are looking to refinance, you may want to check your credit. A good credit score can help you qualify for better rates on a new loan. You can see where you stand by pulling your credit reports for free each year at AnnualCreditReport.com and viewing your credit scores for free each month on Credit.com. You can also go here to learn how to improve your credit, should your scores be in rough shape.)

And soon-to-be students may be able to keep the cost of college down by applying for scholarships or grants, working while in school or attending community college for their first two years before transferring to a four-year institution.

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