Pay Gap Starts Early for Female College Grads
By: ABC Digital
(WASHINGTON) — The gender pay gap starts right away in a woman’s career, with female college graduates earning 82 cents on the dollar than male peers earn, only one year out of college.
The pay gap has been recognized for years as evidence of gender disparity, sparking a discussion during the second presidential election.
Mitt Romney’s now oft-quoted line about “binders full of women,” refers to his request as Massachusetts governor to review female applicants for a cabinet position.
The American Association of University Women (AAUW) analyzed the most recent data from the Department of Education to study college graduates one year after leaving college who were working full-time.
The sample included 15,000 students who received a bachelor degree between July 1, 2007 and June 30, 2008 and who responded to a survey in 2009.
While some of the pay gap can be attributed to a difference in career choices, the study’s researchers also controlled for factors such as career and major.
Of students who majored in business, women earned $38,000 while men earned over $45,000.
When controlling for these variables, women still earned 6.6 percent less than their male peers.
This “unexplained” gap could be explained by many factors such as gender discrimination or gender difference in willingness and ability to negotiate salary, the report states.
Christianne Corbett, AAUW senior researcher, said the report’s findings were in line with AAUW’s past studies. In 2007, AAUW published a study researching graduates one year out of college in 2001, using a slightly different survey. In that study, women earned 80 percent of what their male peers earned.
“We don’t see any evidence that it’s declining, but we can’t say that it’s getting worse either because the two studies were not identical,” she said.
Corbett said the study is a cautionary tale because the pay gap can grow as careers progress.
She said 6.6 percent “may not seem like a big deal, but the lesson of compound interest shows little things make a big difference in the long run.”
“At the beginning of folks’ careers, family responsibilities are not nearly as big a factor. Most young people don’t have kids, and are not married,” she said.
While young graduates may not have extra family expenses, they are usually thinking about how they can pay their student loans.
On that topic, Corbett said data shows young female graduates also seem to be carrying a heavy financial burden with lower income to pay it.
The researchers estimated that a typical female full-time worker one year out of college can typically afford to pay 7.8 percent of her $33,753 annual earnings in student loan payments. They also estimate that her male peer, who makes $39,985 a year, could reasonably afford to pay 8.9 percent of his earnings toward student debt.
Over half of full-time working women in the study, 53 percent, said they had to pay more than the 7.8 percent ideal loan amounts toward student loans. Meanwhile, only 39 percent of men reported they paid over their ideal loan amounts.
The median student loan — a mix of private and federal money — was $20,000 for both men and women, with a median payment of $200 per month.
Corbett offered suggestions to help address the pay gap, including improving publicity for the federal government’s income-based student loan repayment program, conducting pay studies to see if a pay gap exists, and encouraging pay transparency at the workplace.
“Many employers want to do right thing and pay women and men equally,” she said.
Increasing compensation transparency could mean specifying salary ranges for specific job titles.
“This is good for business. Transparency among pay scales increases a sense of fairness among workers. Morale is better when they sense that an employer is fair.”
Copyright 2012 ABC News Radio