- Overrepresentation of women in low-paying jobs is a major driver of the wage gap.
- Economists call this dynamic "occupational segregation."
- Black women lost $39.3 billion in potential wages in 2019. Hispanic women missed out on $46.7 billion.
Women in low-paying industries, particularly Black and Hispanic women, are losing billions of dollars every year, which exacerbates an already stark gender pay gap in the U.S., according to a new analysis by the Labor Department.
The report, released Tuesday, ranks the nation's top 20 jobs with the highest median income. Only one — nurse practitioner — is dominated by women. Nine of them are more than 75% male, and the rest are relatively evenly split between men and women. However, eight of the jobs with the lowest pay are predominantly held by women.
Economists call this dynamic "occupational segregation," and Black and Hispanic women are especially susceptible. The Labor Department estimated that differences in industry and job concentration cost Black women $39.3 billion in potential wages in 2019. For Hispanic women, the total was even greater, at $46.7 billion.
"Occupational segregation is bad for a lot of different reasons," said Sarah Jane Glynn, a senior advisor at the Labor Department's Women's Bureau and one of the authors of the report. "It stifles individual potential, but it also inhibits innovation. It makes the labor force less adaptable to changes, and it obviously has impacts on individual families' economic security, but also their ability to spend back into the economy."
The new data coincides with Equal Pay Day, which is held annually on March 15 to mark the additional time it takes the average woman to earn what the average man made by the end of the previous year. According to government data, a woman who worked full-time in 2020 was paid 82% of the wages of a man who worked full-time.
Private analysis shows the gap persists despite women's increasing levels of education. A new report by Payscale, a compensation management firm, found women with master's degrees in business earned only 76 cents for every dollar made by a male with an MBA. Female lawyers make 89% of the salary of their male counterparts.
"[W]ith the pressure of rising wage inflation, minimum wage increases, and strong competition for talent, we can expect more pay compression and pay inequity issues to arise," said Ruth Thomas, pay equity strategist at Payscale.
The Labor Department has found that 42% of the wage gap is the result of occupational segregation, which was exacerbated by the pandemic. Women are heavily employed in many front-line industries that were hit hard by the lockdowns. And within those sectors, women were more likely to get laid off.
For example, women made up 44% of the workers in retail in 2019 but accounted for 50% of the layoffs in 2020. The disparity was even worse for Black women: They represented 6% of retail employees but made up 15% of the job losses.
In education and health, 75% of the workers were women in 2019 and 79% of the jobs cut in 2020. And Black and Hispanic women bore a disproportionate share of those losses.
"These jobs in these sectors are devalued because of the folks who are doing the work," Glynn said. "It's the fact that it's women — and often what color who are doing this labor — that has been shown to directly lead to its devaluation. And this is part of the reason why occupational segregation contributes to the wage gap."
Labor officials pointed to a wide swath of social factors that contribute to occupational segregation ranging from unequal child care responsibilities to a lack of networks and mentors to workplace discrimination. On Tuesday, the White House will issue a new regulation that would ban the use of prior salary history in the federal hiring process in hopes of diminishing the wage gap. President Joe Biden is also slated to sign an executive order encouraging pay equity and transparency among federal contractors.
One potential silver lining for the future: Occupational segregation is slowly declining with each generation. But Glynn said it could still take years to determine how the recovery from the pandemic and the current tight labor market might reshape the workplace for women.
"It does appear that over time we're seeing less gender differentiation in terms of jobs that folks are taking, but it's certainly not disappearing entirely," she said.