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Working Women: Participation and the Earnings Gap
by Jessica Nelson
Published Jun-10-2014

 
Over the past several decades, women have increased their participation in the labor force. They are more heavily represented in some industries in the economy, while other industries continue to work to recruit them. As women have joined the labor force in greater numbers, their wages have improved compared with those of men, but a gap remains.

Women in the Labor Force
 
In 1970, 43.3 percent of women age 16 or older in the United States were part of the labor force (Graph 1). The rate grew continually for about three decades before reaching what appears to be a peak labor force participation rate for women of 60.0 percent in 1999. Since the Great Recession of 2007-2009, the decades-long growth in women's participation has ended. While the rate remained as high as 59.5 percent in 2008, it followed the trend of a declining labor force participation rate across both sexes, and dropped to 57.2 in 2013.

Those decades did help to close the gap between the labor force participation of men and women. In 1970, men in the United States had a labor force participation rate of 79.7 percent. During the 40-year span, that rate drifted slowly down to 69.7 percent in 2013.

Labor force participation rates by gender in Oregon are quite similar to national rates. In Oregon in 2012, an estimated 58.5 percent of women were in the labor force, compared with 68.2 percent of men.

Graph 1
Labor force participation by sex in the U.S. 1970-2013
Women's Work Today
 
Estimates from the U.S. Census Bureau's American Community Survey for 2010-2012 show the percentage of Oregon women employed in each major industry, as well as the percentage of industry employment made up by women. Women account for an estimated 42 percent of full-time year-round workers in Oregon, less than the United States share of 44 percent.

More women work in education and health services (34%) than in any other industry group (Graph 2). Many women also work in retail trade (11%), and financial activities (9%).

As a share of industry employment, there are only two industries where women are estimated to make up more than half of full-time year-round workers. In education and health services, 70 percent of workers are women. Financial activities employment is 56 percent female.

Construction has the lowest representation of women working full-time year-round, at only 10 percent of the industry's workforce. Natural resources and mining also has a small share of women at 17 percent of the workforce. About one out of every 12 full-time year-round working Oregon women is in manufacturing, and they represent just 26 percent of the industry's workforce.

Graph 2
Where Oregon women work industries of employment in 2013
Wage Disparities Persist
 
Pay equity has been a gender equality issue, taken up by the women's rights movement, for decades. As women have joined the labor force in greater numbers, diversified their industry participation, and increased their education levels, pay gaps have diminished, but a gap continues to exist in the pay of female and male workers in the economy today.

Median weekly earnings of full-time female workers in the United States were $182 in 1979, compared with $292 for men. This put women's earnings at 62.3 percent of men's earnings. In 2012, women's median weekly earnings were $740, and men's were $912, putting women's earnings at 81 percent of men's earnings. From 1979 to 2010, women's earnings increased 407 percent, while men's earnings increased 312 percent.

Accounting for the education level of female and male workers does not remove the disparity. At all levels of education, women have lower median weekly earnings than men (Graph 3). The earnings gap is largest for workers with advanced degrees. Among advanced degree holders, women's weekly earnings are $1,188 and men's are $1,630, meaning that women's earnings are still only 73 percent of men's for people with such degrees.

Educational attainment is very similar between the genders up through the bachelor degree level; it is only in professional and doctorate degrees that women lag behind, with 2.6 percent of women in Oregon possessing these degrees compared to 4.1 percent of men.

In all major industries, women earned less than men. The gap was the smallest in construction, where women's earnings were 92 percent of men's. The earnings gap was largest in professional and business services, where women's average annual earnings were 72 percent of men's. The second largest gap was in educational and health services at 73 percent.

Is this persistent wage gap an example of gender bias? A remnant of the good old boys club? Or is it a matter of economics and personal choice? It is probably a combination of discrimination and personal choice that perpetuates the wage gap. One argument, articulated by Hunter College psychology and linguistics professor Virginia Valian, says that the wage gap is a result of "gender schemas" in the workforce, implicit assumptions about gender differences - held by everyone - that create small differences in characteristics, behaviors, perceptions and evaluations of men and women, causing men to be constantly overrated in their professional lives, and women to be underrated.

Another argument is the glass ceiling; women seem to have more difficulty reaching the top ranks of any industry than do men, evidenced by the still-small ranks of female CEO's at major companies. In early 2014, only 25 Fortune 500 companies had female CEOs, and only 49 Fortune 1000 CEOs were women.

Then there is the argument of choice. Women work part-time more often than men (35% and 15%, respectively). While this doesn't affect median weekly earnings, which included only full-time year-round workers, it could affect the likelihood of promotions and the perceptions of future employers, thus affecting the wages of women who return to work full-time. Women also tend to take more breaks from employment during their careers, more frequently leaving the labor force to care for children and family responsibilities.

The argument has also been made that women are not drawn to the type of work that can come with high-risk premiums, including certain types of construction and protective service occupations. Less than 1 percent of women are in construction compared with 9 percent of men, and less than 1 percent of women are in protective service, while 3 percent of men are. Women are more heavily represented in office and administrative support occupations (19% of women and 6% of men), which tend to have lower wages.

Graph 3
U.S. median weekly earnings in 2013 by educational attainment and sex
Summary
 
Women's participation in the labor force stabilized in the first part of this decade. Their labor force participation rate rose from 43.3 percent in 1970 to 57.2 percent in 2013, converging with men's participation rate, which dropped from 79.7 percent to 69.7 percent. Women have seen larger gains in their median weekly earnings over time, with women's earnings increasing 407 percent from 1979 to 2013, and men's increasing 312 percent. However, even with improvement over time, and regardless of the causes of the earnings gap, such a gap persists today.