Article by Vicki Resech of MCDEVCO
Is there still a gender pay gap in the United States?
After decades of struggling, women are still pushing for equal pay. Even with the growing #MeToo movement and increased attention on equal pay, research shows little progress has been made on closing the gender gap in salaries and wages.
In this blog, I'm going to address the gender pay gap for working women and then how this carries over to women entrepreneurs and obtaining funding for their businesses.
Gender Pay Gap
According to the Institute for Women's Policy and Research, over the last 10 years the gender wage gap has seen little change. Between 2016 and 2017, the gap for full-time workers with weekly salaries actually grew wider by 0.1 percentage points. Ariane Hegewisch, program director for employment and earnings at the Institute states, "Basically, progress in closing the wage gap has really slowed down." The report also states that women in the United States make $0.80 on the dollar compared to their male counterparts. It seems that the current strategy to obtain equal pay won't be achieved until 2059. If ever?
What's Happening Across the United States?
The U.S. Senate Committee on Small Business reports that in 2016 women working full time were paid 20% less than their male counterparts. This difference increases over the course of a woman's career. At age 45 it is estimated that the pay gap increases to 55 percent! As I've been researching this, I've found that the estimated amount of money this gap equates to over a career for a woman can be $1,000,000 +/-. This will also impact a woman receiving less income when she retires as her social security and pension/retirement funds are calculated on her salary/wages. So much for equal pay laws!
Women are still being penalized for not working longer work weeks, taking time off to be a mother and assuming the child raising responsibilities. Employers still perceive mothers as less competent and less committed than their male counterparts. This perception results in reduced earnings and fewer advancements.
Women are Almost Half of the Workforce
According to the Institute for Women's Policy Research, persistent pay inequality can have far-reaching economic consequences. Their research finds that if women's pay were the same as their male counterparts the poverty level could be cut by half and $513 billion would be added to the nation's economy.
WOW! Tell me again why we wouldn't want to pay woman their worth?!
Teaching Women to Understand Their Worth
As a society we need to teach all women their self-worth. To teach them the skill to be able to negotiate for a salary and benefits. This is especially essential for their initial job offer coming out of college. The effects of starting out at a lower wage than an equivalent counterpart will eventually snowball in a woman's career. Farther down the road, she will progressively be earning a much lower wage.
Some Solutions on the Horizon
In a few larger cities across the United States, companies are now barred from asking prospective employees about their salary history - a move intended to stop paying people, especially women, a smaller wage. Another initiative focuses on pay transparency with companies, letting employees better leverage themselves in negotiations and hold their employers more accountable.
What does this mean to women entrepreneurs?
According to the U.S. Senate Committee on Small Business report on Tackling the Gender Gap, this pay gap also inhibits the ability of women to be successful entrepreneurs.
The average age for a woman to start a business is between 45-54 years old. This means the woman has already spent decades of her life having wage discrimination affect her start-up cash and overall availability to access capital.
Women will start businesses with half the capital of men, use more of their own personal savings, and go into credit card debt for funding. Then they will also pay themselves less than they are worth!
Women entrepreneurs are less likely to apply for loans with financial institutions because they fear they will be denied. If they do apply they ask for smaller amounts than required. Women receive just 16% of all conventional small business loans and only 2% of capital venue funding.
Women are Finding a Way to Succeed
Women are resourceful, determined, smart, and will find a way to succeed with less. The 2017 State of Women-owned Businesses report women entrepreneurship continues to rise. There are 11.6 million women-owned businesses in the United States, of which 46% are owned by minorities. These businesses account for 39% of all U.S. businesses. Women owned businesses generate $1.7 trillion in revenue and employ 9 million workers. YES, no matter what you can't keep us down!!
What Women Entrepreneurs Need to Succeed
Leadership and confidence are the two characteristics female entrepreneurs require to succeed.
To start, build, and maintain a successful business, it takes confidence and determination, along with the ability to take risks. These traits combined with a strategic vision for their businesses will put women ahead of their own competition.
Hard work, the ability to persevere through tough times, and having a community of supportive family and friends creates a successful business.
Education! Understanding your business, managing cash flow, developing a sales plan, access to cash, knowing when to pivot your business plan and how to advertise and build your share of market are essential tools for success.
Develop a strategy and be able to execute it successfully!
Equal Pay Laws
As you read this blog, you might be asking yourself, "Are there equal pay laws?" Yes, there are!! The landmark Equal Pay Act of 1963 made it illegal for employers to pay unequal wages to men and women who perform substantially equal work. Now, the government has The Paycheck Fairness Act because the first act of 1963 didn't work? Wasn't enforced? Had too many loop holes? I'll talk about that in my blog Part Four - The Next Steps - because we haven't gotten far in the last 40 years.