Down with the Wage Gap: The Rise of Breadwinning Women

in Financial Planning by

It’s hard to deny the fact that the gap between men and women’s wages, known as the “gender wage gap”, is real. Study after study verifies its existence, and even worse, the reality that the disparity has barely budged over the last decade.

While the severity of the wage gap may ebb and flow based on various, unique factors, it still lurks around every workplace corner. One recent study from the American Association of University Women (AAUW) showed that the wage differs regionally (women earned 91% of what men earned in Washington D.C. in 2013, but only 66% in Louisiana). Further, minority women in all occupations experienced a more severe gap – Hispanic women earned only 54% of what Caucasian men earned in 2013).

To make matters worse, the wage gap grows with age. Women earn around 90% of men’s earnings until age 35, but it drops off from there.

A study from the Pew Research Center backs up the ideas proved by AAUW, adding that they believe the pay gap has shrunk to a disparity of $0.16, unlike earlier years. In other words, Pew estimates that women of all ages and ethnicities are earning an average of $0.84 for each dollar a man earns.

Year after year, dollar after dollar, even small sums – like a disparity of $0.16 – add up in a huge way. And those missing dollars can lead to bleak consequences not just for women, but also for their families.

The Rise of the Female Breadwinner – Is It All Good News?

Still, many of the statistics around the gender wage gap contradict. At a time when female employees are fighting for equal paychecks, you might think that the number of households with a female breadwinner is decreasing. However, Pew Research Center data actually shows that the number of female breadwinners is on the rise. While a female breadwinner led 11% of households with children under age 18 in 1960, over 40% of households have a female breadwinner today.

But don’t let the numbers fool you. Pew points out, these “breadwinning moms” are made up of two distinct groups. While 37% are married moms who earn more than their husbands, the other 63% are single mom breadwinners because they have no choice. That’s hardly something to celebrate.

Further, the term “breadwinner” is a deceiving one, implying a high income. According to Laura Vanderkam, author of I Know How She Does It, households with a female breadwinner aren’t spared from the effects of the gender wage gap more than anyone else. Why? Because female breadwinning isn’t always intentional.

“Dad loses his job, and Mom is suddenly the breadwinner, but because she didn’t plan on that, she hasn’t built up her career with the goal of earning the money necessary to support her family well on her own,” explains Vanderkam. “Just because a woman is a breadwinner doesn’t mean she’s earning a lot. These are two separate issues.”

Down with the Wage Gap: The Rise of the High-Earning Woman

Dark and dreary statistics aside, a certain percentage of women are earning higher incomes than ever before – and that fact should be celebrated. As Pew notes, the median total family income of married female breadwinners was nearly $80,000 in 2011, well above the median household income of around $57,000.

Many experts attribute the rise in female earnings and female breadwinners not just to societal factors, but also to female educational attainment. And when you look at the numbers, it’s easy to see why. As the Center for American Progress notes, women make up just 50.8% of the population, yet they earn:

• 60 percent of all Bachelor’s degrees
• 60 percent of all Master’s degrees
• 47 percent of Law degrees
• 44 percent of Master’s degrees in Business and Management

Meanwhile, women are 47%of the workforce, yet make up 59% of the college-educated, entry-level workers.

With numbers like that on the table, it’s no wonder that the wage gap is closing at a faster rate for younger women. These high-earning women in question are raising the bar and blazing trails. Hopefully, women after them will keep pushing forward until equal pay is an issue of the past.

Why Are Some Women Earning More?

Still, in a nation where women’s wages are being suppressed, it’s interesting to see what steps some take to earn more than the national average. Higher education plays a role, but is there something else?

Vanderkam interviewed high-earning women in her new book to learn what really set them apart. For her study, she focused on women earning over $100,000, with at least one child at home. Here’s what she found:

“The women in my study, who all earned >$100,000, worked slightly longer hours than average. They put in (on average) 44 hours a week,” notes Vanderkam.

Compare that to the average mom working a full-time job, and you’ll see the difference. Bureau of Labor Statistics figures say the average working mother puts in 35-37 hours per week and makes less than $40,000 annually.

But hours worked isn’t the only significant factor Vanderkam found. Close to half of interviewees worked “split shifts” in order to spend more time with their families. They’d leave work at a reasonable time, then do more work after putting the kids to bed.

“They traded off work time for what could be TV time, rather than work time for kid time,” explains Vanderkam.

According to Vanderkam, high-earning women who manage to “have it all” are ones who find innovative ways to put in more hours without compromising family time.

“Women massively limit their earning power by not considering jobs that would require those few extra hours,” she said. And in a today’s competitive labor those extra hours could mean the difference between getting ahead – or not.

The Fight for Equal Pay Must Continue

That’s all good advice indeed, but more needs to be done to ensure fair pay in the richest country in the world. Women cannot change enough to solve the gender wage gap, nor should they. Instead, systemic changes need to be made to fix pay inequality on a national level.

It’s high time that solutions are brought forward and implemented. Equal pay isn’t just a women’s issue; it’s a family issue. When women aren’t paid what they’re worth, everyone hurts.

That’s part of the reason President Barack Obama signed two executive orders on Equal Pay Day 2014. The first prohibits retaliation against contractor employees who discuss salary with their co-workers, and the second calls on the U.S. Department of Labor to start collecting wage data, including the race and sex of employees, from federal contractors.

To bring the wage gap to a close for good, the AAUW aims to secure congressional action on the following pieces of legislation too:

• Paycheck Fairness Act: Building on the Equal Pay Act, which hasn’t been updated since 1963, the PFA would “enact stronger incentives for employers to follow the law, enhance federal enforcement efforts, and prohibit retaliation against workers asking about wage practices.”
• Fair Pay Act: According to the AAUW, the Fair Pay Act would “require employers to provide equal pay for work of equal value, whether or not the jobs are the same.” Other goals of this legislation include “banning retaliation, requiring employers to file wage information with the Equal Employment Opportunity Commission, eliminating the gag rule on wage disclosure, and prohibiting employers from reducing wages to comply with pay equity requirements.”

Fighting for legislation that will help close the gender wage gap isn’t the only way women can work towards financial equality. By learning more about creating additional capital through investing tools like Personal Capital’s, women are another step closer to a more fair financial life.

We can’t solve the wage gap on our own; we need everyone, men included, to get on board with us.

Learn more about Pew Research Center’s study here, and visit Personal Capital today to check out helpful investing tools.

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Holly Johnson

Holly Johnson is a financial expert and award-winning writer whose obsession with frugality, budgeting, and travel plays a central role in her work. In addition to serving as Contributing Editor for The Simple Dollar, Holly writes for inspiring publications such as U.S. News and World Report Travel, Personal Capital, Lending Tree, and Frugal Travel Guy. Holly also owns two websites of her own - Club Thrifty and Travel Blue Book. You can follow her on Twitter or Pinterest @ClubThrifty.

13 comments

  1. George

    So are you paid as much as male writers on this blog? why or why not?

    Reply
    • Holly Johnson

      Hi George, I don’t know how much the other writers for this site are paid. However, I am guessing we are all paid the same. With that being said, I don’t have any personal complaints about how much I am paid as a female writer. I am the breadwinner for my family and earn an extremely nice living. This post isn’t about me or any grievances I have =)

      Reply
      • George

        Thanks for the response. The reason I asked was because something like someone’s salary is very nuanced based on the market environment. In the case of this blog, there are various factors that I assume affect compensation. But comparing the average of all male blogger compensation to female blogger compensation doesn’t bring any useful information to the table as compensation within this platform is very different from compensation on another platform that may have more male or females bloggers being paid a much higher rate. I might as well create different groups based on other factors say country, age, city, race, orientation etc and make conclusions on the results pitying one group vs another.

        I know many of my peers in the different companies I’ve worked at whose compensations is very different based on factors such as salary negotiation , promotions, late night efforts etc. Many of them make more than me because I did not put the effort that they put in (I even declined a promotion which would require more of my time). Many of these studies are very basic… putting a few pieces of data points together for understanding results that have many many more factors affecting it and therefore seems very inaccurate to me. Even at the company level, comparing two people’s salary would require considering various factors such as experience, entry salary, negotiation demands, qualification etc.

        Reply
  2. Matt

    It is discouraging to see this wage gap myth perpetuated on a blog I highly respect. The facts cited raise their own more interesting questions such as:

    “Women earn around 90% of men’s earnings until age 35, but it drops off from there.” Isn’t it a reasonable expectation that women’s earnings would drop off at a time when they are generally becoming mothers?

    “While 37% are married moms who earn more than their husbands, the other 63% are single mom breadwinners because they have no choice. That’s hardly something to celebrate.” In 1960 about 9% of children were being raised in single parent households, in 2008 that number increases to 29.5%. What is different now that is causing this shift in the family?

    Women earn “60 percent of all Bachelor’s degrees. 60 percent of all Master’s degrees… women are 47% of the workforce”. Why aren’t men equally represented in higher education? Why are women choosing not to work at the same rate as men even though they are better educated? What degrees are women more likely to attain than men? Men dominate 4 of the top 5 highest-paid college major specializations (Petroleum Engineering, Aerospace Engineering, Chemical Engineering, Computer Science), and women dominate 4 of the 5 lowest-paid (Psychology, Early Education, Human Services, Social Work).

    “Bureau of Labor Statistics figures say the average working mother puts in 35-37 hours per week”. Is working mothers decision to prioritize family over earnings potential a bad thing? How many hours per week does the average working father spend at work? The average man spends 14% more time at work than the average woman, and he is nine times more likely to die in a work related accident.

    “When women aren’t paid what they’re worth, everyone hurts.” If women are simply paid less than men, why isn’t the free market dominated by all female companies?

    The truth is that what we’re calling a pay gap is actually an earnings gap. Women EARN less than men by and large because of personal choices: occupation, hours, family, etc.

    Reply
    • Holly Johnson

      Just because you haven’t seen compelling evidence that the wage gap exists doesn’t mean that it is a myth. Many people who read this blog, including me, would disagree with you.

      With that being said, I do understand some of your questions and concerns. As someone who has read extensively about the wage gap and written on it several times, I tend to believe that the gap may be smaller than some claim. Based on evidence I’ve seen, 77 cents on a dollar seems unlikely to me. On the other hand, I can’t pretend that it’s a myth. I’ve simply read too many studies that reach an entirely different conclusion.

      Keep in mind, these studies aren’t comparing secretary’s salaries to CEOs and magically finding a wage gap. In many cases, they are comparing salaries among different workers with the same qualifications in the same field. I also find it interesting the wage gap grows when we consider the salaries of minority women compared to white men within the exact same careers. I don’t think your conclusions about the “earnings gap” explain that.

      You said:

      “Women earn around 90% of men’s earnings until age 35, but it drops off from there.” Isn’t it a reasonable expectation that women’s earnings would drop off at a time when they are generally becoming mothers?”

      No, I don’t think that’s reasonable. Women who take maternity leave and return to the workforce shouldn’t be punished financially for having children.

      With all of this being said, I do think that lifestyle choices play a role. I know many women who earned advanced degrees and chose to stay home with their children. If (when?) they return to work, they will start lower on the rung. That’s just the way it is and I don’t think those kinds of factors are always measured in the studies I mentioned or others.

      ” If women are simply paid less than men, why isn’t the free market dominated by all female companies? ”

      Based on this question, I’m guessing that you don’t think sexism exists either. I’ll just skip over that one.

      The bottom line: I agree with you in part. I think certain factors that aren’t necessarily bad exacerbate the wage gap and make it seem worse than it really is. On the other hand, I think it’s far too easy to decry real problems as “myths” when you’ve never experienced them.

      Reply
      • Matt

        The Department of Labor commissioned to have this researched in depth, and while I have not read the entire study, the foreword written by the Department of Labor includes the following:

        “There are observable differences in the attributes of men and women that account for most of the wage gap. Statistical analysis that includes those variables has produced results that collectively account for between 65.1 and 76.4 percent of a raw gender wage gap of 20.4 percent, and thereby leave an adjusted gender wage gap that is between 4.8 and 7.1 percent.

        These variables include:

        A greater percentage of women than men tend to work part-time. Part-time work tends to pay less than full-time work.

        A greater percentage of women than men tend to leave the labor force for child birth, child care and elder care. Some of the wage gap is explained by the percentage of women who were not in the labor force during previous years, the age of women, and the number of children in the home.

        Women, especially working mothers, tend to value “family friendly” workplace policies more than men. Some of the wage gap is explained by industry and occupation, particularly, the percentage of women who work in the industry and occupation.

        Research also suggests that differences not incorporated into the model due to data limitations may account for part of the remaining gap. Specifically, CONSAD’s model and much of the literature, including the Bureau of Labor Statistics Highlights of Women’s Earnings, focus on wages rather than total compensation. Research indicates that women may value non-wage benefits more than men do, and as a result prefer to take a greater portion of their compensation in the form of health insurance and other fringe benefits.

        In principle, more of the raw wage gap could be explained by including some additional variables within a single comprehensive analysis that considers all of the factors simultaneously; however, such an analysis is not feasible to conduct with available data bases. Factors, such as work experience and job tenure, require data that describe the behavior of individual workers over extended time periods. The longitudinal data bases that contain such information include too few workers, however, to support adequate analysis of factors like occupation and industry. Cross-sectional data bases that include enough workers to enable analysis of factors like occupation and industry do not collect data on individual workers over long enough periods to support adequate analysis of factors like work experience and job tenure.

        Although additional research in this area is clearly needed, this study leads to the unambiguous conclusion that the differences in the compensation of men and women are the result of a multitude of factors and that the raw wage gap should not be used as the basis to justify corrective action. Indeed, there may be nothing to correct. The differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers.”

        It seems that you are arguing that the earning gap has not been proven false, therefor it is true. This is an argument for ignorance, similar to the way creationists argue against evolution via gap theory. I have not seen any compelling evidence which supports the idea of an earnings gap, but if you have I would be interested in seeing it.

        “Women who take maternity leave and return to the workforce shouldn’t be punished financially for having children.” This would not be a discriminatory act, and women are not being punished. When a person is not in the workplace for an extended amount of time they will miss out on advancement opportunities. Maternity leave is not mandatory and women, on average, choose to take more time off after childbirth.

        “Based on this question, I’m guessing that you don’t think sexism exists either.” This is an attack on my character, also known as an ad hominem. It is of course wrong in general. At no point would I say that sexism does not exist, or that women do not face discrimination. However, there is no evidence that I have seen which suggests there is systemic wage discrimination in the United States.

        “it’s far too easy to decry real problems as “myths” when you’ve never experienced them.” This is another logical fallacy. Its wrong to say someone is unqualified to speak to an issue because they’ve never experienced it firsthand. That being said, I do have a wife and children. My wife did take six months of maternity leave, while I took two weeks. I do get to hear all about the experiences she has at work. I think I have a fairly good grasp of these issues.

        Reply
        • Holly Johnson

          I agree with you that additional research is probably needed, but I am also guessing that any research confirming a wage or earnings gap would fall on deaf ears in your case. You don’t believe it is real; I get it. We will just have to agree to disagree. I cited several studies in my article that shared statistics on the wage gap, and there are dozens more out there if you are interested in reading them. Most of the most recent studies were conducted by academic researchers and government agencies. I’m not going to write the equivalent of another article in the comments to point them out to you, so I’ll link to a few instead:

          http://www.pewresearch.org/fact-tank/2015/04/14/on-equal-pay-day-everything-you-need-to-know-about-the-gender-pay-gap/
          http://www.aauw.org/research/the-simple-truth-about-the-gender-pay-gap/
          https://web.stanford.edu/group/scspi/_media/pdf/key_issues/gender_research.pdf

          Also, the fact that maternity leave is not “mandatory” shouldn’t be used as a basis to offer women lower wages. Since you have a wife and children, I shouldn’t have to tell you that it takes time to recover from childbirth. I took ten weeks both times and it wasn’t nearly enough. Many women choose to take more, yes.

          Reply
          • Matt

            “Also, the fact that maternity leave is not “mandatory” shouldn’t be used as a basis to offer women lower wages.”

            I haven’t suggested that maternity leave is a basis to offer women lower wages. I’m suggesting that when anyone is out on leave of any type (maternity, paternity, disability, personal, educational, family) they run the risk of being passed over for career advancement. This does not equal discrimination.

            I’ll read through your links, thank your for providing them. In regards to your assertion that “research confirming a wage or earnings gap would fall on deaf ears in your case;” these personal attacks are unbecoming for a person of your intelligence.

          • Holly Johnson

            Matt, I truly think you should re-read your comments. You have been clearly hostile about this article from your first comment and on. You are also mansplaining. I write for a living; do you really think I don’t know what an ad hominem is?

            With that being said, I certainly don’t mean to insult. Based on our conversation, it appears to me that your mind is made up. That’s all I’m saying. You are probably being a little oversensitive as well, although I realize the thick skin I have built up over the years as a writer is something not everyone has. When you do read through the studies I posted, I hope you find that this issue is a real one, albeit one that is sometimes overblown.

          • Matt

            I am hostile about the content of your post because I believe it is misleading. All available evidence narrows the earnings gap down to approximately 5-7%, and even those studies admit to not factoring in all plausible variables.

            I particularly don’t like this, which is in direct opposition to available evidence and the findings by the Department of Labor and Industries:

            “The Fight for Equal Pay Must Continue

            That’s all good advice indeed, but more needs to be done to ensure fair pay in the richest country in the world. Women cannot change enough to solve the gender wage gap, nor should they. Instead, systemic changes need to be made to fix pay inequality on a national level.”

            Sounds to me like you’re suggesting policy changes based on incomplete and unsubstantiated claims.

            I’m willing to consider your evidence and change my opinion on the matter. The paper by Blau and Kahn was quite good. Some of their work is cited in the CONSAD study I quoted earlier.

            http://consad.com/index.php?page=an-analysis-of-reasons-for-the-disparity-in-wages-between-men-and-women

          • Holly Johnson

            Hey Matt,

            I really do understand your concerns. In most cases, government solutions solve nothing and, in fact, make things worse. I do believe, however, that society needs to change how it views women in the workplace. And part of that change includes acknowledging that there are problems, even if you don’t necessarily agree with the proposed solutions.

  3. RK

    When a women brings home less money each day it means that she has less to spend for the everyday needs of her family and far less savings to make for her retirement over a lifetime of work, just think about it!

    Reply
  4. Tre

    I am the breadwinner in our family and a high wager earner. I earn the same as a man would in my position, but I know that I will not move to a higher position in my company. Women are not considered for executive positions.

    Reply

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