The gender pay gap starts right out of college, study finds

Women with college degrees earn $4 less per hour than their male peers early in their careers, and the gap is widening, according to a study out Tuesday from the Economic Policy Institute.

One oft-heard reason given for the pay disparity between men and women has to do with the demands of life outside a career. Women are more likely to drop out of the workforce to care for children and relatives, for instance, or to prefer working more flexible, shorter hours. Past research suggests that women’s earnings tend to slip when they have children, while men tend to make more.

But a new study out Tuesday argues that the gulf forms well before that. At the earliest stages of their careers, female workers with a college degree in the US earn an average hourly wage of $16.58, according to data compiled by the Economic Policy Institute (EPI), a left-leaning Washington think tank. Young men with a college degree, meanwhile, earn an average of $20.94 an hour - $4.36 more than their female counterparts. That shakes out to a $9,000 annual pay gap.

“It is noteworthy that stark wage disparities between men and women occur even at this early part of their careers, when they have fairly comparable labor market experience,” authors Elise Gould and Teresa Kroeger wrote in the report.

 At least at the early stages, the pay gap widens with education. Women with a high school education earn 92 cents to every dollar paid to men. Women with a college degree earn 79 cents.

Those disparities, too, have widened over the past decade and a half.  According to EPI, young male college graduates earned 8.1 percent more in average than they did in 2000, but young female college graduates earned 6.8 percent less.

Some of that has to do with widening inequality overall. There are simply more men in high income groups, which have done well in the wake of the Great Recession compared with middle and low income workers. “These gender wage discrepancies are likely driven by men at the top of the wage distribution earning more than ever before and driving up the average male wage,” the report reads.

Indeed, women become even more scarce at higher levels of income and wealth.  Women make up an estimated 11 percent of the top 0.1 percent of the nation’s earners, according to a 2014 report.  However, the share of women one-percenters has improved greatly in the past 30 years, from 3.3 percent in 1980 to 17 percent in 2010.

When it comes to closing the wage gap, there are promising developments on the low-income side as well. “The good news is that many of the policies that will raise wages for most working people will disproportionately benefit women,” Ms. Gould and Ms. Kroeger write. 

The minimum wage is going up in several cities and states and among private businesses. This summer, the US labor department will update rules governing overtime pay, entitling workers who make less than $50,000 annually to extra pay for extra hours (the current threshold is about $24,000). That change could give a raise to nearly half of single working mothers in the US, according to one survey. And paid sick and family leave are catching on in a handful of US states, including California, Rhode Island, and New York.