Equal Pay Day 2021: Shrinking gender wage gap could be bad news

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Equal Pay Day, the date that measures how far into the new year women in the U.S. had to work to earn what men did the year prior, is often used as a measure of women’s inequality at work. With the gender wage gap now clocking in at 82¢ on the dollar, Wednesday marks Equal Pay Day 2021. But looking ahead to 2022, experts say the gap will likely shrink—and that that would be a bad sign for women’s economic progress.

In 2020, many women in low-wage jobs were forced out of the workforce as they took on childcare burdens and as the pandemic devastated the industries that disproportionately employ them, including leisure and hospitality. In fact, so many of those women left or lost their jobs that their absence as wage earners will likely reduce the gender pay gap in 2022 (the data used to set the date for Equal Pay Day exhibits a one-year lag). High-earning women haven’t suffered the same level of unemployment, which will likely help skew the data. The National Women’s Law Center crunched the numbers quarterly in 2020 and found that the gender pay gap began the year at 81¢ on the dollar and ended it at 84 cents.

“If we end up with a situation where the wage gap shrinks slightly, but it shrinks because we have more women out of the workforce, no one should be out there declaring that a win,” says Fatima Goss Graves, the president and CEO of the NWLC.

In preparation for that moment, it will be important to place gender wage gap numbers in context, Goss Graves advises. How many women are still unemployed? (Almost 3 million women dropped out of the labor force over the past year.) How high is unemployment in low-wage professions specifically? (In leisure and hospitality, the February unemployment rate was 13.5%, compared with a 6.2% overall unemployment rate.)

“It’ll be a chance for us to have a more nuanced understanding of the wage gap,” she says. “And to talk about the suite of solutions that stand to position us in the long haul so we are actually closing the wage gap—not through women being driven out of the workforce.”

Equal Pay Day measures the pay gap between all U.S. working women and all U.S. working men; of course, significant disparities exist by race. Black women and Latinas are overrepresented in the kinds of low-wage jobs that disappeared in 2020—meaning they are the women who may be missing from next year’s wage gap calculations.

The gender pay gap exists because of several factors, from wage discrimination, where women earn less than men for the same or comparable work; to occupational segregation, where women are more likely to work in low-wage jobs; to the motherhood penalty, where women earn less than their male peers who are fathers or reenter the workforce at lower levels after becoming moms.

Goss Graves supports solutions like passing the Paycheck Fairness Act, which would protect workers from retaliation for discussing pay and better facilitate class action over unequal pay, and the Pregnant Workers Fairness Act, which would protect workers who require accommodations to do their jobs during pregnancy.

And while this year’s Equal Pay Day data doesn’t yet reflect the effects of the pandemic, it does tell us what earnings women missed out on in 2019 just before they entered the yearlong catastrophe. “The wage gap becomes a wealth gap over time,” Goss Graves says. “This year’s numbers tell us the baseline inequality that we headed into the recession with.”