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HR Magazine: Future Focus

By Jennifer Schramm  10/1/2007

HR Magazine: October 2007Vol. 52, No. 10

Wage Gap Reversals

A recent report that women in their 20s in some major cities now earn more than men in the same age group has demographers, economists and urban planners debating whether it may signal the start of a national trend.

Women out-earning their male counterparts in some places could influence the gender ratio in certain professions and increase demand for work/life balance from both male and female employees. It also could raise earnings expectations among the next generation of female employees, who could become more inclined than their predecessors to negotiate for higher salaries.

The salary findings come from a recent analysis of U.S. Census Bureau data by Andrew Beveridge, chairman of the sociology department at Queens College in New York. The analysis shows that in the 20-to-30 age bracket in cities such as New York, Dallas, Boston, Chicago, Minneapolis and Los Angeles, median salaries for women are higher than those for men. Women in New York, for example, earn 117 percent of what men earn; in Dallas it's 120 percent.

In the same age bracket nationally, however, women's salaries still fall short -- equal to 89 percent of what their male counterparts earn. Moreover, the overall wage gap between women and men is narrowing more slowly than it has in the past. The gap had even widened between college-educated men and women in their 20s.

An often-cited explanation for young women's earnings advantage in large cities centers on education. Compared with men in the same age group, women in these cities may be much more likely to have a college or professional degree. Thus, although wage differentials favoring men may still exist within comparative groups of educated young men and women, women with college degrees may simply outnumber men with similar levels of education in large cities.

Also, young women in large cities may earn more than their male counterparts because fewer of them -- compared with women in their 20s elsewhere -- have started having children, and thus they have not felt the "motherhood penalty" on their earnings. Some studies indicate that women can find it harder to get hired and to advance once they begin to have children, whereas there is evidence that men in contrast enjoy a "fatherhood bonus."

However, high-earning urban women in their 20s may begin to fall behind men in earnings when they enter their 30s. Even now in cities where young women have the earnings advantage, men in their 30s earn more than women in the same age bracket.

Nonetheless, Beveridge argues, the gains that women achieved in their 20s will make the ground they lose in their 30s comparatively smaller than the losses experienced by previous generations.

And if urban women in their 20s continue to earn more than men over time, it could lead to a narrowing of the wage gap overall.

Jennifer Schramm is manager of the Workplace Trends and Forecasting program at the Society for Human Resource Management.

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