If two jobs are completed by similar people, you’d expect them to get the same pay. Unfortunately, this isn’t always the case. The gender pay gap is a hot topic, and for good reason: Many women are underpaid for work that’s identical to that done by a male counterpart.
This is a gross simplification of the gender pay gap, though. Let’s take a closer look before diving into why the pay gap exists, a study that shows how it impacts stress, and what you can do to combat it.
What Is the Gender Pay Gap?
In short, the gender pay gap is a disparity between pay when it comes to work done by men versus work done by women. When looking at the financial gap between genders, there are two foundational stats:
- The uncontrolled gap: This number looks at the pay gap between men and women without factoring in experience, job title, and so on. When using the uncontrolled gap, women make 79 cents for every $1 a man makes. This is an improvement of five cents since 2015, but it’s still not equal.
- The controlled gap: The controlled gap factors in experience, specific job titles, education, and so on. When using this gap, women make 98 cents for every $1 a man makes.
If you look at the controlled gap, things are looking pretty close to equal. Right? Well, yes and no. If you factor in the qualifications, experience, and so on, then yes, women are almost making as much as men. (Almost still isn’t good enough, however.)
The more glaring number, the uncontrolled gap of 79 cents for every $1, points to an even bigger problem: There aren’t many women in high-paying jobs. This problem has often been labeled as the opportunity gap, as it represents the number of men in high-paying jobs versus women.
Why Does the Gender Pay Gap Exist?
While women in high-paying or specialized jobs are coming close to making the same amount as men, equality still isn’t there. Even worse, the opportunity gap highlights the fact that women simply aren’t being given the same opportunities as men when it comes to high-paying, specialized roles.
Breaking down the “why” behind this issue is a difficult, nuanced task. That being said, there are a few areas that are often attributed with being a part of the problem:
- Lack of universal pregnancy leave: Federal law mandates that women get paid leave for pregnancy and childbirth. The same laws don’t apply to men. This often leads to women taking more time off than men during pregnancy and after, as men without paternity leave aren’t given paid time off for childbirth. This leads many employers to pass women over for promotions, as they worry they’ll take more time off. This is even true when the women aren’t planning on having children. (Not that either situation makes it remotely acceptable.)
- Wage penalties: Studies have shown many women are more likely to take time off to care for children or elderly family members. This also includes time off for childbirth. This time off, unfortunately, often makes it difficult for women to reenter the workforce. Even worse, many women see a 7.3% dip in pay when they return to work. This wage penalty further hurts their earnings, and forces them to attempt to climb back up the ladder again to recoup lost wages. (Which, as the uncontrolled gap shows, is an uphill battle.)
- Employers make assumptions: Many employers simply make assumptions about what types of work women are better-suited for, which leads to some women not even getting the chance to fill a role.
There are countless reasons the gender pay gap exists, none of them justifiable. Still, understanding these reasons is the first step to combatting the pay gap, as they can make you better-prepared for discussions with your employer regarding pay.
How the Pay Gap Impacts Stress
A recent study from Novi Money examined how the pay gap has influenced financial stress, looking specifically at the different levels of stress between male and female millennials. Some of the standout findings are:
- 51.9% of women say finances are the most stressful thing in their life.
- 55% of millennial women find money overwhelming, compared to 36.1% of men.
- Men have 70% more in their retirement accounts than women.
- Men have 29% more in savings and 36% more in checking accounts than women do.
- Women are twice as likely to doubt their financial decisions than a man.
So, what does all of this mean exactly?
These stats on their own are shocking enough, but together they tell a powerful story: Women, particularly younger women, have developed a large amount of financial stress and doubt.
So, is there anything you can do to counter this stress and the wage gap?
5 Tips for Overcoming Financial Stress
The issue of the pay and opportunity gap is larger than any one person. Still, you can take strides to combat financial stress in your own life.
There are a number of things you can do to help fight financial stress and put yourself in a better financial situation as quickly as possible.
1. Create a Budget
Even when money is tight, a proper budget can help you get the most out of your money. More importantly, a budget will help you live within your means and reduce the chance that you overspend and wind up in debt.
Debt can cause a load of stress, so avoiding it at all costs should be a top priority. What’s more, a budget can help you save up and put aside more money for emergencies and retirement, allowing you to close that retirement gap.
Create a budget as soon as possible to get yourself on the right path and combat some of that financial stress.
2. Treat Yourself Right
It might seem counterintuitive to budgeting, but make sure to treat yourself every now and then. This doesn’t have to mean buying everything on your Amazon wish list, but simply taking time out of your day to do something you enjoy, treating yourself to a meal you want every now and then, and so on.
3. Pick Up a Side Hustle
We’re fortunate enough to live in an age where you can do a million different things from home and make money. Whether you want to look into freelance writing, learn some marketing basics and get into digital marketing, or something totally out of left field, you can find the right opportunity online.
Your options are even wider if you’re interested in a little adventure, like driving for a rideshare company, delivering food, or even opening a dropshipping business.
4. Secure Passive Income
Passive income generally starts off slow, but over time it can become a great boon to your finances. In some cases you can secure enough passive income from one or more sources that you don’t even have to work full-time anymore.
Read up on passive income jobs and see if you find any that sound appealing. You generally have little to lose by trying them out, so be bold.
5. Never Stop Learning
A huge part of the battle when it comes to anything in the finance
world is education.
Never stop reading up on the latest in budgeting, side hustles, financial tips,
and so on.
This information will help you make better choices with your own money, better equip you for discussions with your boss surrounding promotions or raises, and help you blaze a better financial path to wellness.
Your Financial Destiny
Discouragement, anger, and stress are all understandable when thinking about the financial gap. But, your financial future is still yours, even though the cards may be stacked against you.
Equip yourself with the right information, take a deep breath, do something you enjoy, and find something you love doing and monetize it. There are more side hustles and sources of passive income available than any single person could ever hope to do, so the odds of you finding the right one are certainly there.
The financial gap will continue to be frustrating as long as it exists, but that doesn’t mean you can’t lead by example and build a bright financial future you’re proud of.
About the Author:
R.J. Weiss is the founder and editor of The Ways To Wealth, a Certified Financial Planner™️, husband and father of three. He’s spent the last 10+ years writing about personal finance and has been featured in Forbes, Bloomberg, MSN Money, and other publications.