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Why did the gender wage gap widen for the first time in a generation?

| Jan 27, 2025

For years, advocates have used the gender wage gap as a metric for progress towards gender equity in the United States. A slew of laws including the 1963 Equal Pay Act, 1964 Civil Rights Act and the 1978 Pregnancy Discrimination Act coincided with a gender revolution in the workplace, bringing more fairness so that women could secure jobs, get paid and create the lives they want for themselves. These laws and more recently, the 2009 Lilly Ledbetter Fair Pay Act, as well as the 2022 Pregnant Workers Fairness Act, have brought us closer to the principle of fair pay. However there’s evidence that progress on gender equality in the workplace, as measured by pay equity, has stalled for the past few decades.

The latest evidence is that the gender wage gap among full-time, year-round workers grew significantly in 2023, widening from 16 cents to 17.3 cents on the dollar; this was the first time the wage gap grew since 2003. Now women working full-time, year-round are paid 82.7 cents for every dollar men are paid; women workers overall (including part-time and seasonal workers) are now paid only 75 cents on the dollar compared to men, a gap of $14,170 over a year – and as always, the gap often is wider for women with multiple marginalized identities.

So why did the wage gap grow in 2023?

Looking at the latest data, the 2023 wage gap appears to be a return to a pre-pandemic “normal” – a normal that has never worked for women.

While there was some progress from 2022 to 2023, it is clear that the typical woman has benefited less from the strong economy than the typical man. For full-time, year-round workers, median earnings increased for both men and women from 2022 to 2023. But the real earnings increased twice as much for men (3.0 percent) as for women (1.5 percent). For all workers, including seasonal and part time workers, real earnings for men went up 2.6 percent from 2022 to 2023 but decreased by 2.0 percent for women, perhaps due to the growth in part time work. This difference in earnings also reflects the changing composition of the workforce for women.

In the area of employment, women’s prime-age labor force participation reached historic highs in 2023, but it’s notable that of the 1.3 million more women who were employed in 2023 versus 2022, only 60,000 worked full-time and year-round; the rest worked part-time or were employed seasonally.

Nearly all groups of women measured – white women, Black women and Asian women – saw decreases in full-time, year-round employment, with Latinas being the one exception.

All groups of women except for all Native Hawaiian and Pacific Islander women workers and full-time year-round Latina workers saw their wage gap grow overall in 2023. Latinas saw an increase of 436,000 full-time, year-round workers in 2023. But due to the many challenges Latinas face in the labor force, such as overrepresentation in low-wage jobs, discrimination, and limited access to essential benefits such as paid family and medical leave and paid sick days, Latinas continue to have one of the starkest wage gaps at 51 cents. These factors affect Latinas up and down the pay scale, from lawyers and surgeons to agricultural workers, and they could also partially explain why women as a whole saw lower wage growth than men in full-time, year-round employment. NHPI women face similar challenges in the workplace, and the wage gap varies largely for NHPI women of different ancestries, though disaggregated data are woefully lacking.

Many of these trends are the product of changes in the economy due to COVID exacerbating existing inequalities. When the COVID-19 pandemic hit in 2020, many of the low-paid jobs dominated by women disappeared overnight; additionally, millions of women were forced out of the workplace to provide care for family members due to gendered care expectations, the closure of schools and child care centers, nursing home and assisted care facilities becoming closed bubbles and workers increasing their hours in the face of layoffs. But because these women were pushed out of the workforce altogether, they weren’t included in the gender wage gap calculations. This led to a paradoxical finding where the gender wage gap got smaller in 2021 and 2022 compared to 2020. Due to the rapidly rising cost of living, the increased accessibility of remote work and the reopening of schools, alongside the continued scarcity of child care, many women found themselves heading back to work, but part-time – to balance their economic and care needs.While pandemic aid, such as the expanded Child Tax Credit, enhanced unemployment benefits, and continuous Medicaid enrollment helped ease some of these pressures, these investments also ended. Many women found themselves heading back to part-time jobs in 2023; these jobs pay less than full-time jobs. The large increase in part-time work for women pulled down the average wage and grew the wage gap.

The arrest of progress on the wage gap is a reminder that returning to a pre-pandemic “normal” harms the economic security of women, because that normal was never working for women.

“Normal” has meant high levels of discrimination and persistent occupational segregation, where people’s identities factor into the different kinds of jobs they are in, and depending on the field these jobs are in, often have varying wages, benefits and working conditions. This results in the devaluing of women’s labor and keeps women in low-paying jobs. For instance, the ten most common jobs for men have an average median wage of $56,500, compared to $48,500 for the ten most common jobs for women, a 16 percent wage penalty for women. And it results in real costs for women. For example if the 12 million women in their 10 most common occupations had been paid at men’s average rate for men’s most common occupations, they would have taken home an additional $96 billion in 2021. “Normal” has also meant that women are responsible for the vast majority of unpaid care work, to the tune of over $1 trillion a year, without key supports. And “normal” has meant that even within the same occupations, women are paid less than men due to widespread discrimination and are held to punishingly unreasonable expectations.

As the economy has transitioned from a manufacturing economy to a service economy, women seemed primed to benefit since we are overrepresented in service industries; however “greedy jobs” and the stubborn American adherence to the ideal worker continues to work against women, who are expected to balance work, family, and community. Meanwhile men are held to different expectations, namely that they should prioritize work over caregiving responsibilities – expectations which are harmful in their own ways since many men would like to spend more time with their families and more than 80 percent of men believe men and women should equally share care responsibilities at home.

How do we recommit to gender equity in the workplace?

We must make these low-paid jobs into good jobs with real policy shifts that accurately value the work women do. We must also eliminate discriminatory barriers that keep women out of higher-wage fields. And we must address the lack of care infrastructure which causes many women to take time away from work or down-shift to provide care because it’s seen as “women’s work,” This makes working full-time year-round over a lifetime simply not possible for many women. A real care infrastructure would allow more women to enter the workforce and for women to work more hours if they choose. There’s research showing that the wage gap gains made in the 1980s and 1990s are due in part to women working more hours than they did in the previous generation, but the hourly wage gap remains roughly stagnant. And the cost of paid care – such as childcare and senior care – has steadily increased (even though the workers aren’t seeing much of those gains as increased wages) so anything that can help women and families not bear the full cost of these services will be helpful to those both paying for and being paid for care, thus helping reduce the gender wage gap for both groups. Additionally, access to benefits like paid family leave helps women remain in the workforce, work more hours, and develop more equitable divisions of care labor, all things that help close the gender wage gap.

All in all, the widening of the gender wage gap in 2023 is the result of many policy choices over a generation, which also means that women need policymakers to act and reverse this trend. We can make stronger efforts to make care a collective responsibility, like every other rich country. We can strengthen tools to combat pay discrimination and break the silos of occupational segregation. Through these policies, we can choose to give women – and their families – economic freedom and power.

The author would like to thank Kate Gallagher Robbins, Jessica Mason, Amaya Smith, Sharita Gruberg, Gail Zuagar, Mettabel Law and Brittany Williams for their contributions.