Talk of the gender pay gap first surfaced decades ago, back in the era when Ms. magazine was making its debut. So perhaps it’s not surprising that millennial women think it’s a historical relic.
But they are wrong.
Women who recently graduated from college earn just 82 percent what their male peers pull down, according to a 2012 study by the American Association of University Women. And even when that figure is adjusted for differences in education levels and career paths, a gap still exists. Women in business and management earn 86 percent of what men earn, and in sales occupations that drops to 77 percent.
Things haven’t really changed since that study was published. A recent study released by Wells Fargo found that household income reported by millennial men averaged $77,000, compared with $56,000 for women.
“We didn’t expect to find” a gap that size, said Karen Wimbish, director of retail retirement at Wells Fargo, noting that millennial women are graduating from college at a higher rate than millennial men. “This should be the time before they are leaning out, have families or children or select jobs with more flexible hours. This should be a time when you see the narrowest gap.”
Victoria Budson, executive director of the Women and Public Policy Program at the Harvard Kennedy School, said one troubling element of the gap is that it occurs despite the fact that women are earning more high school, college and graduate degrees than men.
“One could easily think ‘Wow, this is going to solve the wage gap.’ But it doesn’t. What happens is that the more educated a woman, and the higher level her position is, the broader the gap,” Budson said.
Some experts say that a big problem is women’s failure to negotiate effectively for the salaries and raises they deserve. They say women are hesitant to violate norms that dictate what so–called good girls should do. But various studies suggest it’s more complicated than that.
For example, research by Hannah Riley Bowles of Harvard and Linda Babcock and Lei Lai of Carnegie Mellon found that women face a social penalty for negotiating that is 5.5 times greater than that for men. They are perceived as less likeable and less appealing as colleagues.
“If you teach women to negotiate harder, it can hurt them,” said Joan C. Williams, who runs the Center for WorkLife Law at the University of California, Hastings College of the Law.
So how can the millennial pay gap be closed?
First, Budson said, millennial women need to realize that the pay gap is alive and kicking.
“The biggest problem, in my view, for millennials is that millennials think the problem has been solved,” she said. Young women can help themselves by researching industries and becoming familiar with prevailing wages so they know what is appropriate for them.
Women should also consider how best to negotiate. Research suggests that women negotiate more effectively and are less intimidated when they feel they are negotiating on behalf of someone else. So viewing a salary negotiation as a negotiation to benefit current or future children may help a woman bargain.
Negotiating in a non-adversarial way is also effective for women, Budson said. If you talk about your eagerness to help your employer and be a contributor, rather than simply asserting your value or citing market data, it should work better.
“Understand how the language you choose will impact how people see you,” she said. “When you use relational language, you will not be a norm violator, people will work with you, and you will be a better candidate for a raise.”
The onus isn’t only on the women, though. Employers need to be aware that the gap is persisting for young women, and keep it in mind when they are planning compensation and promotions.
Budson says that when employers consider a group of candidates for promotions, instead of just one or two, it can help eliminate the gap.
“When one is evaluating one person at a time, you are always evaluating that person against the fictitious norm in your head,” she said. “In the case of an engineer, that’s probably a male middle-aged engineer,” which would give an edge to a male candidate.
“When you have systems where you are looking to promote lots of people, women tend to do better. It turns off that frame of bias.”
Williams, who is currently studying what she calls bias interruptors, said job postings themselves can affect the pay gap.
She pointed to a social science study that compared the results from two online job advertisements, one making no mention of salary and one saying the salary was negotiable.
“Forty–five percent of the salary differential between men and women was erased when the ad said salary was negotiable,” she said. “It told women that the good-girl thing to do was to negotiate—and even more important, that they would not be penalized for negotiating.”
Employers and millennials, start pushing. There’s a pay gap that needs to close.
—By Kelley Holland, special to CNBC