Gender and Income Inequality: History and Statistics

The gender wage gap is the disparity in incomes between men and women for doing the same work. Also known as the gender pay gap, it has narrowed since the 1960s but remains significant. Closing the gap has become an important focus for governments, nonprofit organizations, and businesses. This article focuses on the gender wage gap in the U.S., its long history as a political issue, and where it stands today.

Early History of the Wage Gap

Though the gender wage gap probably dates to the beginnings of civilization, it emerged as a political issue in the U.S. in the 1860s under the rallying cry of "Equal Pay for Equal Work."

Among the movement's most vigorous advocates were women's rights activists Susan B. Anthony and Elizabeth Cady Stanton, who made a case for bridging the wage gap in their newspaper, The Revolution, and other works.

Women eventually won the right to vote in the U.S. with the ratification of the 19th Amendment to the Constitution in 1920. Nevertheless, the wage gap persisted.

The 1940s: A Failed Attempt to Bridge the Gap

Winifred Claire Stanley, a Republican member of Congress from New York, introduced a bill in 1944 titled "Prohibiting Discrimination in Pay on Account of Sex." It would have amended the list of unfair labor practices in the National Labor Relations Act of 1935 to include discriminating "against any employee, in the rate of compensation paid, on account of sex." Stanley's bill never made it through Congress.

The 1960s: Major Strides for Equal Pay and Civil Rights

The next major attempt to address the inequity on a national level came two decades later, with the passage of the Equal Pay Act in 1963. It prohibited employers from paying male and female workers different wages for "jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions." However, it also allowed for several exceptions, including pay structures based on seniority or merit.

In signing the bill into law, then-President John F. Kennedy said that paying men and women different wages for the same work was an "unconscionable practice" and cited a statistic that "the average woman worker earns only 60% of the average wage for men."

A year later, in 1964, Title VII of the Civil Rights Act also addressed the wage gap, broadening the law to make compensation decisions based on race, color, religion, sex, or national origin unlawful. As with the Equal Pay Act, there were multiple exceptions, again including seniority- and merit-based wage programs.

The 1970s and 1980s: A Call for Comparable Worth

In the 1970s and 1980s, the concept of comparable worth (or pay equity) entered the national conversation. Its proponents called attention to wage gaps among workers in jobs that, while not identical, could be considered similar in terms of skills, responsibility, and value to the overall enterprise. Often, they argued, those gaps were a legacy of past discrimination.

"Many women and people of color are still segregated into a small number of jobs such as clerical, service workers, nurses, and teachers," the advocacy group National Committee on Pay Equity explained. "These jobs have historically been undervalued and continue to be underpaid to a large extent because of the gender and race of the people who hold them."

Eleanor Holmes Norton, chair of the Equal Employment Opportunity Commission (EEOC) during the Carter administration, singled out comparable worth as "the issue of the 1980s." But the Reagan administration, which followed, disagreed. Then-President Ronald Reagan reportedly called it "Mickey Mouse, a cockamamie idea...[that] would destroy the basis of free enterprise." Pay equity and comparable worth made little progress on the federal level but did become law in several states.

The 2000s: Win Some, Lose Some

There were no major changes in the laws around payment by gender in the 1990s. Although the gender wage gap continued to shrink, it did not close.

A 2007 U.S. Supreme Court case, Ledbetter v. Goodyear Tire and Rubber Co., led to the next major federal law. Lilly Ledbetter sued her employer under the Civil Rights Act, alleging that it underpaid her for 19 years. A jury awarded her more than $3.5 million, but the company appealed, arguing that she failed to file her suit within 180 days of when the discrimination first occurred, as prescribed by law. An appeals court reversed the original decision, and the Supreme Court also ruled against Ledbetter in a 5 to 4 vote.

Dissenting justice Ruth Bader Ginsburg suggested it was now a matter for Congress to take up, which the legislative branch soon did. The Lilly Ledbetter Fair Pay Act, which passed in 2009, expanded the period for filing a discrimination claim, making it easier for other women to sue employers they believed discriminated against them. It was the first piece of legislation signed into law by then-President Barack Obama just nine days after his inauguration.

The Paycheck Fairness Act was another major legislative proposal addressing the wage gap, first introduced in 2009. Among other things, it called for greater enforcement of antidiscrimination laws and increased penalties for violators. The Paycheck Fairness Act initially passed the U.S. House but failed in the U.S. Senate. It has been reintroduced several times since then, including in 2021 when it again passed the House.

The Mid- to Late 2000s and 2020s

Despite progress on the legislative front over the past 100 years, the wage gap has been slow to narrow. According to the U.S. Census Bureau, women working full-time in 1960 earned about 60 cents for every dollar earned by men—the number cited by President Kennedy in signing the Equal Pay Act.

Though the numbers gradually inched up over the next 30 years, they didn't reach 70 cents until 1990. Women earned about 84 cents for every dollar earned by men in 2022, the most recent year for which data are available. This is shown in the graphs below from the U.S. Census Bureau.

The top graph shows how the female-to-male earnings ratio has increased to 84%. The bottom graph illustrates the annual earnings of male and female full-time workers. Women earn about $10,000 less on average than their male counterparts.

Full-time earnings for women have increased at a faster rate since 2000. Full-time female workers earned a median income of $40,156 per year in 2000 compared to $52,360 in 2021. Meanwhile, full-time male workers earned a median income of $59,860 in 2000, rising to $62,350 in 2022.

More Women Working Full-Time

Considerably more women now work full-time. The table below shows a 26.5% increase in full-time female workers since 2000, more than 10 percentage points higher than the increase for men.

Moving from part-time to full-time work also means that more women may now be eligible for employee benefits, such as health insurance coverage and retirement plans.

Equal Pay Day

Equal Pay Day was established in 1996 by the National Committee on Pay Equity. It was created to highlight the differences in pay between men and women and, more importantly, how "far into the year women must work to earn what men earned in the previous year."

On Equal Pay Day 2023, which fell on March 14, 2023, the Biden Administration announced steps to close the gender wage gap and to provide women with access to better jobs. The announcement was made after the president signed an executive order to close the wage gap. The order included:

• Providing access to better-paying construction jobs
• Supporting efforts for equal pay in different states through pay transparency legislation
• Boosting pay equity among federal contractors

In signing the order, President Biden also encouraged private companies to follow suit.

The National Committee on Pay Equity set Equal Pay Day 2024 for March 12, 2024.

The Gender Wage Gap by Race

The gender wage gap also varies significantly by race. According to 2022 data from the U.S. Department of Labor, Hispanic women earned just 57.5 cents for every dollar earned by White non-Hispanic men, while Black women earned 69.1 cents, White non-Hispanic women earned 80 cents, and Asian women earned 98.6 cents.

The Gender Wage Gap Debate

Although these numbers are widely quoted, they are not universally accepted. Skeptics maintain that the gender wage gap is actually much smaller, saying the numbers are distorted by, among other things, the fact that men tend to work longer hours.

The public at large seems to disagree with that assessment. In a Pew Research Center study in late 2022, 50% of respondents said that "women are treated differently by employers" was a major reason for the gender wage gap and another 30% said it was at least a minor factor.

The Bottom Line

Income inequality on the basis of gender has lessened over time, but women are still often underpaid in comparison to men, and there are more levels of inequality within the wage gap when it comes to race and type of occupation. Closing it remains unfinished business in making the United States a more equitable nation.