Many of you may have spent the weekend celebrating the mothers in your lives, but did anyone think to thank mothers for taking home smaller paychecks?
Seventy percent of mothers with children 18 and younger work outside the home, and research shows women who are mothers receive up to a 4% reduction in pay than women without children (Budig 2010). This “motherhood penalty” is more harshly impacted on low-income women, but persists throughout all earning levels.
Research posits several causes for this penalty: mothers are judged as being less competent and less committed to their work, mothers are less likely to be recommended for hire and less likely to receive promotions, and mothers often receive a lower starting salary (Budig 2019).
The Gender Pay Gap
Of course, the motherhood penalty is not the only pay discrimination women face. The gender pay gap is the commonly referenced phrase that describes how women performing the same job as a man earns roughly 80 cents for every dollar the man earns. This gap increases dramatically for women of color, and African American women are found to earn only 61 cents and Latinas only 53 cents for every dollar a white man earns (Vagins 2019).
Research has shown that geography also plays a role in the gender pay gap. For example, a white woman working in Louisiana can expect to earn 69 cents on the dollar earned by a white man in her state.
In addition to location, there is a wide discrepancy within the gap among various industries. In which profession do women see the largest loss of income? Financial management. Female financial managers, on average, earned just 65% of their male counterpart’s $100,575 annual paychecks.
In high earning industries, such as financial management, medicine, and accounting, there seems to be fewer women serving in leadership roles – which brings us back to the motherhood penalty. Are these women being passed up for promotion because of time away from work during child rearing years?
The Fatherhood Bonus
Men, however, can expect a different impact on their pay when they have children. On average, fathers earn 6% more than men without children. Fathers are also more likely to be hired and promoted. Research has shown fatherhood is positively associated with traits like commitment and loyalty, whereas these traits are not associated with motherhood (Correll 2007).
In 2016, the US Census found 23% of households were led by single mothers (US Census 2016), and nearly half of all African American children in the US live with a single mom (Pew Research 2018), so the motherhood penalty is certainly impacting single income households.
How Does the Military Compare?
The first enlisted women served in the U.S. Military during World War I and during World War II the Women’s Army Corps enlisted 400,000 women to serve. In 1948, the Women’s Services Integration Act established a permanent place for women across all branches of the military, and in 1949 the Classification Act called for equal pay for equal work among federal agencies. This process brought forth the class title process which pays service members by rank and therefore does not allow for pay discrimination by gender or race. In this way, the U.S. government, and thereby the military, are far ahead of the curve on gender pay equity.
Effectively, there is no gender pay gap in the military, however, a 2012 RAND study found fewer rates of women and minorities among officer ranks in the military, and, until recently, women were banned from many positions within the military.
In 2016, Defense Secretary Ash Carter opened all military posts to women, opening 220,000 previously closed positions up to females. Hopefully this will lead to more officer positions being filled by female service members.
For more on gender pay disparities, join the MFLN Personal Finance team on May 28 for Gender & Finance, a 90-minute webinar exploring the external factors that impact women’s finances and the ways financial professionals can better meet the financial needs of women. RSVP and find out more here.
12 Stats About Working Women | U.S. Department of Labor Blog. (2019). Blog.dol.gov. Retrieved 6 May 2019, from https://blog.dol.gov/2017/03/01/12-stats-about-working-women
Budig, M. (2019). [online] Available at: https://www.researchgate.net/profile/Michelle_Budig/publication/254093120_Who_Gets_the_Daddy_BonusOrganizational_Hegemonic_Masculinity_and_the_Impact_of_Fatherhood_on_Earnings/links/0deec52d6c40a9322b000000/Who-Gets-the-Daddy-BonusOrganizational-Hegemonic-Masculinity-and-the-Impact-of-Fatherhood-on-Earnings.pdf [Accessed 6 May 2019].
Carter Opens All Military Occupations, Positions to Women. (2015) U.S. DEPARTMENT OF DEFENSE. Retrieved 6 May 2019, from https://dod.defense.gov/News/Article/Article/632536/carter-opens-all-military-occupations-positions-to-women/
Costly, A. (2019). Equal Opportunity in the Military – Constitutional Rights Foundation. Crf-usa.org. Retrieved 6 May 2019, from http://www.crf-usa.org/brown-v-board-50th-anniversary/equal-opportunity-in-the-military.html
Differences in Disadvantage: Variation in the Motherhood Penalty across White Women’s Earnings Distribution – Michelle J. Budig, Melissa J. Hodges. (2010). American Sociological Review. Retrieved from https://journals.sagepub.com/doi/abs/10.1177/0003122410381593
The Majority of Children Live With Two Parents, Census Bureau Reports (2016). The United States Census Bureau. Retrieved 6 May 2019, from https://www.census.gov/newsroom/press-releases/2016/cb16-192.html
Nearly half of black children live with a solo mom. (2018). Pew Research Center. Retrieved 6 May 2019, from https://www.pewresearch.org/fact-tank/2018/04/27/about-one-third-of-u-s-children-are-living-with-an-unmarried-parent/ft_18-04-11_unmarriedparents_race/
Significant Gender- and Race/Ethnicity-Based Differences Exist in Rates of Promotion and Retention Among Officers. (2012). Rand.org. Retrieved 6 May 2019, from https://www.rand.org/pubs/technical_reports/TR1159.html
Vagins, D. (2019). The Simple Truth about the Gender Pay Gap. AAUW: Empowering Women Since 1881. Retrieved 6 May 2019, from https://www.aauw.org/research/the-simple-truth-about-the-gender-pay-gap/