In 2020 women made up 47% of the US labor force. However, analyses of women’s compensation and place in the organizational hierarchy reveal ongoing imbalances when compared with their male counterparts. At the highest level, in 2021 only 41 CEOs of the Fortune 500, or 8.1%, were women. The gender wage gap is a recognized phenomenon that has been widely studied. In 2019 women were making 82.3 cents for every dollar of men’s earnings. Although it has narrowed significantly since 1979, when it was 62.3, the gender wage gap remained relatively stable through the 2010s. This is true when examined across racial/ethnic and occupational categories (highlights of women’s earnings in 2020). Among the many causal factors, researchers have identifed a motherhood wage penalty that is variously attributed to productivity differences and discrimination (De Linde Leonard, 2020; Gallen, 2018; Correll, 2007).
For women in the early phase of their careers, there are several considerations that may lead to more positive salary and promotional outcomes. According to Adam Grant (2013), women are not as willing as men to advocate for more money during salary negotiations. Understanding this tendency may help to resist the urge to accept the first offer. It is often prudent to step back, take an objective perspective, and get some advice from a trusted colleague before responding to a salary offer.
Early career promotions to management are a second factor that women should pay attention to. In a Wall Street Journal article largely based on the influential study Women in the Workplace, reporter Vanessa Fuhrmans explains that it is “…early in women’s careers, not later, when they fall dramatically behind men in promotions…Though women and men enter the workforce in roughly equal numbers, men outnumber women nearly 2 to 1 when they reach that first step up—the manager jobs that are the bridge to more senior leadership roles.” Although companies advance women already in management positions, there is not a similar effort to promote women to that first management position. As Haig Nalbantian, a labor economist at the global human resource consulting firm Mercer explains, companies need to “position women and minorities to succeed in the roles that are likely to lead to higher-level positions” (Fuhrmans, 2019). Senior partner at McKinsey & Co. and contributor to Women in the Workplace, Lareina Yee comments that “[f]ew efforts are likely to remedy the problem as much as tackling the gender imbalance in initial promotions to management” (Fuhrmans, 2019). In early career employment searches, women can choose to seek out companies with a positive record of advancing women. Once employed, they should be proactive in understanding the expectations for promotion into management.
Figure 2.1. U.S. Bureau of Labor Statistics, Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over: Men and Women [LES1252881900Q and LES1252882800Q], retrieved from FRED, Federal Reserve Bank of St. Louis; September 30, 2021.