The Wage Gap & Its Impact on U.S. Workers

Author: Nicki Malekadeli
Posted on: September 20, 2019

Researchers and experts commonly use the wage gap as an index of how much female employees earn compared to men. The wage gap is expressed as a percentage and is calculated by dividing the median yearly earnings for women by median yearly earnings for men. It can also be used to compare how much workers earn according to their racial background.

While this indicator primarily describes the pay gap between male and female workers, it also covers disparities due to race, age, and other factors. A recent report from the Economic Policy Institute (EPI) sheds light on how pay gaps due to race, wage, and education are still prevalent in America in spite of the increase in wages in recent years. And this has a significant impact on the U.S workforce.

A Closer Look at Wage Gaps Among Workers

Extensive research on the wage gap in America shows how companies pay their workers, especially when factors such as gender, race, and education come into play. Below are some important wage gap statistics and trends based on different wage gap factors:

Gender

  • PayScale’s recent study on the gender pay gap among U.S. workers reports that women earn only $0.79 for every dollar earned by men in 2019.
  • The ratio of women’s median weekly full-time earnings compared to their male counterparts was 81.1% in 2018. This reflects an 18.9% gap in earnings between men and women.
  • The average gender wage gap among full-time employees was 19.5% in 2017.

Race

    • Research from EPI states that there were larger pay gaps between black and white workers in 2018 than in 2000.
    • Since 2000, the wage growth for white and Hispanic employees has been a lot faster when compared to persons of color.

Education

      • Male college graduates receive higher pay on average than female workers with post-graduate or doctorate degrees.
      • Persons of color with college and advanced degrees are now paid more than they used to receive in 2000. However, their wage growth is still significantly slower than their white and Hispanic counterparts with a college and post-graduate degree.
      • Some college and post-graduate degree holders experienced the strongest wage growth in 2018.

U.S. Laws that Protect Employees from Wage Discrimination

Whether they are working full-time or part-time, every employee is entitled to equal pay regardless of their gender, race, religion, national origin, age, or disability. Some companies, however, still refuse to give equal pay to their employees. To combat pay discrimination, the government has put several laws in place.

Equal Pay Act

Under the Equal Pay Act of 1963, employers must provide equal wages to male and female employees for similar work in the same establishment. It does not allow employers to give their male and female workers unfair wages for positions with equal skill, effort, and responsibility in the same environment and establishment.

Title VII of the Civil Rights Act of 1964

Title VII protects workers against discrimination based on their race, color, national origin, gender, and religion. The federal law outlaws using these factors as a basis for their pay, fringe benefits, or other privileges.

Age Discrimination in Employment Act of 1967

The Age Discrimination in Employment (ADEA) Act makes it illegal for employers to discriminate against employees aged 40 years old and above. The labor law states that companies should not use a worker’s age as a basis for the compensation they will receive. ADEA also amended the Older Workers Benefit Protection Act, which states that companies should not determine an employee’s benefits based on their age. It also forbids employers from targeting older employees for layoffs.

Title I of the Americans with Disabilities Act of 1990

Title I of the ADA requires that private employers, state and local governments, employment agencies, and labor unions do not discriminate against disabled workers in employment and compensation.

Understanding Pay Equity & Pay Parity

A majority of people stand in favor of equal pay for equal work. But as much as it tries to promote fair wages, it can also end up disregarding factors such as an employee’s education, job tenure, previous work experience and performance ratings. And taking these two differences into account is what distinguish two different approaches to employee pay: pay equity and pay parity.

Pay equity involves giving employees equal and consistent wages based on their education, work experience, and tenure in a non-discriminatory manner. Pay parity, on the other hand, involves establishing a no pay gap across the entire workforce. Simply put, the wage gap between male and female workers, as well as Americans and racial or ethnic minorities, should not exist under pay parity.

Pay equity falls under federal law. State rulings, however, treat pay equity as a subjective approach to the wage gap which could result in unintentional discrimination. California’s Equal Pay Act in 2016 adopted a new standard that required employers to view similar types of work as a composite of skill, effort, and responsibility. It would also make companies liable for wage differences between American workers and others with the same position.

Hire an Experienced Attorney for Your Wage Discrimination Claim

Wage discrimination based on gender, race, age, and other factors is illegal. This doesn’t prevent companies from providing unjust wages, however. If your employer fails or refuses to give you fair pay, you have the option to file a wage discrimination claim against them. A competent lawyer can help guide you through the process, from gathering evidence to representing you in court.

Mesriani Law Group has been handling employment law cases across California for over two decades. Our lawyers are well-versed in Equal Pay Act discrimination and will champion your case to help you get the compensation you deserve. Contact us today for a free initial consultation.