Women see their wages peak earlier and lower than men

Dive Brief:

Women's earnings peak a median 11 years earlier than men's earnings, according to data from a new PayScale study. Pay levels for women peak at age 44 earning an average of $66,700 a year, PayScale said, while men's earnings peak at age 55 at an average of $101,200 annually. Gender disparities between women and men begin at the start of their careers; at age 22, the median wage for women was $40,400 compared to $52,500 for men. PayScale studied a sample of more than 1.4 million workers surveyed between April 2016 and April 2019. The sample included workers age 22 to 60; the analysis included only those with a Bachelor's degree.
Broken down by race and gender, wages for black women peaked at $61,100 on average at age 52, the lowest of all demographics measured by PayScale. Black men's average peak of $80,000 at age 59 was the lowest among male groups in the analysis, but was higher than that of white women ($68,800 at age 53) and Hispanic women ($71,000 at age 59). Asian men and women's earnings peaked at the highest level among their same-gender counterparts, reaching $132,100 at age 52 and $95,600 at age 57 respectively.
The survey also found that the biggest gender-based wage disparities occurred in occupations that The New York Times described in a report as "greedy" jobs — those that pay premium wages for working long hours — including those in sectors such as law, healthcare, sales, life sciences and management.

Dive Insight:

PayScale's research seems in line with what others have observed: gender- and raced-based pay inequities are real, persistent and lead to long-term earnings setbacks for some workers, especially black workers. The left-leaning think thank Economic Policy Institute (EPI) released a report earlier this year showing that wages for whites and Hispanics were growing faster than those for black workers, and that the wage gap between black employees and white employees in 2019 is bigger than it was in 2000. According to the EPI report, only those black employees with college educations had higher wage growth than in 2000; still, their wage growth lagged behind that of whites and Hispanics.

Another piece of the PayScale study worth noting is that wages for women, although lower than men's at the start of their careers, begin on a similar trajectory but level off and peak earlier than men's. For example, study results show that wages for black women in the study have a trajectory that generally keeps pace with that of white men, but levels off so early that the difference in their peak wages is significant.

PayScale also points out that various groups in the workforce face different obstacles, which might account for some of the pay disparity. Women, for instance, are generally the primary caretakers in their households and therefore are more likely to take time out from work to raise a family. Some suggest that offering new fathers similar paid parental leave benefits could help more women remain in the workforce and avoid lapses in pay.

However, when workers have comparable skills, credentials and experience as their colleagues but still face significant disparities in pay, HR pros may need to look for bias. HR must work with managers, review compensation decisions and, as PayScale recommended, consider intersectionality — where race, gender, age and other factors are part of one person's experiences — to close wage gaps.