Wage Inflation and Pay Disparity: The Dual Challenges Women Face
by Molly Peck on Tue, Jul 19, 2022
Although some acute effects of the “she-cession” appear to be statistically receding, women now face the new (and compounded) pressure of dealing with inflation in their personal and professional lives. We recently explored the general impact of inflation and wage inflation in our article, “(Wage) Inflation: The moment of truth employers will face with annual increases looming”. In this article, we’ll explore the statistical trends and concrete realities women face through inflation and its relationship to pay disparity and pay equity in the workplace.
Along the way, we’ll highlight the solutions and responses that employers are embracing to ensure that inflation and pay disparities do not disproportionately affect women in their organizations. The good news is that some simple adaptations – including receptivity to hybrid, remote, or flexible workplace configurations, as well as “returnship” programs, are all contributing to overdue advances in these areas.
Assessing the Post-Pandemic Landscape
Before we address current challenges for women in the workforce, we should revisit some findings from an eye-opening Stateline article, which highlights that in 2020 – towards the start of the pandemic – “mothers of children 12 years old and younger lost nearly 2.2 million jobs between February and August, a 12% drop” as compared to a 4% drop among fathers, which amounted to a three times greater likelihood of job loss among mothers during that period. Concurrently, a June 2020 USC study found that one out of three working mothers reported that their spouse was not assisting with child care during the pandemic. It’s now broadly recognized that parents of small children, particularly women, were also impacted by pandemic-era remote learning, school closings, and a general increase in child care duties and educational supervision. Even if some of these circumstances (educationally and otherwise) have improved since that time, it’s essential to acknowledge that many women are still reeling from the sudden and long-lasting challenges that the pandemic generated.
As just one example, although women’s employment has rebalanced to pre-pandemic levels, the very group we just discussed – mothers of small children – remain behind pre-pandemic levels with 250,000 or 2% less employed than in late 2019. Similarly, whereas some regions of the country have returned to pre-pandemic employment levels, areas like the Midwest (800,000 fewer women employed) and industries like nursing and childcare, have seen significant drops in employment return. Simply put, although the general national trend appears to be one of employment recovery and recuperation for women, this is by no means a universal phenomenon. More steps can be taken, especially for women who are seeking employment or reemployment in a new career field after a substantial hiatus.
The Inflation Factor:
And then inflation entered into the equation. Amid an already trying period of economic recovery, inflation is now affecting women’s personal and professional lives in significant ways. Perhaps most glaringly, as the Institute for Women’s Policy Research points out, inflation has the greatest impact on those living on a fixed income or attempting to pay off student loans or credit card debt. In all of the aforementioned categories, women struggle disproportionately: holding nearly two-thirds of student loan debt, higher credit card balances, higher proportions of medical debt, and receiving lower monthly social security benefits.
Similarly, as inflation impacts the prices of products everywhere, it has particularly raised the price of products like baby food, women’s clothing, tampons, and other essential household goods. Although these increased prices significantly affect women with children of all ages, this financial reality deeply impacts single women, as well. For instance, single women spend upwards of 30% more than single men on the majority of their groceries and household products; for women who are the primary or sole shopper/meal preparer in their household, the cost of at-home meals is up 10%, as well.
Gauging Progress in Pay Equity
As for unpacking the latest data on pay disparities, the results are varied. A recent 2022 study by Payscale reveals that while women earn 82 cents for every dollar compared to men across all industries, the disparity narrows significantly when analyzing the respective earnings of men and women with comparable education, years of experience, hours worked, and job levels/titles. Overall, the gender pay gap narrowed by two cents to the dollar between 2021 and 2022 (an unexpectedly positive occurrence given related trends during the pandemic). However, it’s important to keep in mind that experts believe it will still take another seven years (until 2029) for genuine pay equity to be achieved. So, although some of the general data suggests progress and movement in the right direction, this same data should serve as inspiration for employers to play a meaningful part in achieving true pay equity in their own businesses well before this projected and still-hypothetical endpoint.
So, how are businesses and other organizations facilitating pay equity and addressing inflation’s distinct impact on women? Fortunately, there are a number of sound and replicable approaches that have been employed by business entities and state governments alike, each of which can inform or inspire your own organization’s efforts.
- Developing a remote, hybrid, or flexible workplace configuration. Our article, “What’s the Data on Switching to a Remote or Hybrid Workplace?” offers a comprehensive rundown of the benefits (read: cost-effectiveness, heightened efficiency, increased company morale) of making this change across your organization. Specific benefits for women are noteworthy, as well, including reduced costs to childcare, after-school care, and increased flexibility to achieve work-life balance. For a deeper dive on this subject, we recommend this Boston Globe article, which explores how remote work can foster advancement opportunities and improved mental health for women in the workplace.
- Returnship Program(s) – Returnships are internships that often begin mid-career to help women gain management positions despite (in this case) pandemic career breaks. Multiple U.S. corporations have shortened their usual required absence time to streamline women’s access to potential long-term leadership positions and return-to-work opportunities. Appropriately enough, many organizations are incorporating more remote, hybrid, or flexible work configurations as part of this adaptation for women returning to work.
- Assess and Address Pay Equity – In a survey of over 1,000 HR personnel, SHRM concluded that over 60% of organizations are voluntarily conducting pay equity reviews. These are designed to pinpoint and address any disparities in pay between employees performing comparable work/tasks. If your organization has not already dedicated time to address this issue, it’s a pivotal step in fostering trust among your current employees and to demonstrate to new hires that hiring and salary discussions are rooted in fairness and informed by the existing data within your organization.
Looking for help in designing or launching your company’s remote/hybrid work strategy, returnship program, or pay equity assessment? We offer a range of solutions to help you attract and manage the employees that will make your company thrive. Contact us today to start our collaboration.
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