Government Data Shows U.S. Gender Pay Gap Is Getting Bigger

Data released in September 2024 by the U.S. Census Bureau showed the gender pay gap among American workers experienced its first “statistically significant” widening in 20 years. Was that an anomaly? Well ...

A new Census Bureau report, released Sept. 9, revealed the gender pay gap actually increased in the subsequent 12 months. The data displayed that the median full-time female worker made 81% as much as the median male worker ($57,500 vs. $71,000) in 2024, down from 83% from the year prior.

According to Vismay Gada, the chief evangelist at beqom, a total compensation software company, total rewards (TR) professionals should pay attention to this news because such headlines can generate buzz — and questions — within your organization’s workforce.

“When national data shows that median incomes are flat and pay gaps are widening, it’s a signal,” he said. “It tells us that employees are paying attention, and the conversation around fairness is shifting again. ... The Census report is a reminder that pay is emotional and public perception matters. If the outside world sees growing inequity, your people will question whether it exists within your walls, too.”

“If the outside world sees growing inequity, your people will question whether it exists within your walls, too.”

— Vismay Gada, chief evangelist, beqom

The Extent and Contributors to the Gap

Women, on average, stand to lose more than $450,000 over a 40-year career because of the gender pay gap, according to calculations from financial services company Bankrate. The losses are even greater for Black and Hispanic women over a 40-year career: roughly $1 million and $1.3 million, respectively.

By analyzing Census Bureau data, Bankrate found those groups of women earned 67 cents and 58 cents, respectively, for every dollar a white, non-Hispanic man earned in 2023. White women earned 80% as much as their white male counterparts, and Asian women have almost reached pay parity with white, non-Hispanic men, earning 94% as much as them in 2023.

Bankrate also looked at the gender pay gap across more than 25 industries and found that the pay gap was the largest in the finance and insurance industry. Women made up more than half of workers (54%) in that industry in 2023, but the Census data showed women earned 63 cents on the dollar, on average, compared to men.

“Women continue to be concentrated in lower-paying jobs than men, so there is a ceiling that can be achieved in just addressing ‘all-else-equal’ pay equity,” said Brian Levine, a partner and pay equity leader at Merit Analytics Group, a talent analytics consulting firm. “Further progress will require a focus on access to senior, high-paying roles.”

Levine also saw larger pay gaps, especially on the gender front, among new hires. “That is certainly the case now in technology firms,” he said. “It’s critical to stay on top of pay equity in ‘hot jobs,’ where market sensitivities might relate to looser pay standards for new hires as well as incumbents pressing for increases.”

Gada noted high-growth sectors that lead wage expansion, such as tech, finance and energy, still have low female representation, while industries with more women, like education and healthcare, are seeing slower wage momentum.

In addition to structural issues, Gada said behavioral challenges also should be addressed.

“The way we value flexibility hasn’t caught up with how people actually work,” he said. “Women, especially caregivers, continue to bear the cost of flexibility through fewer promotions or slower wage progression.”

Additionally, Gada said most organizations still look at pay equity in isolation.

“They don’t track how opportunities, promotions or performance ratings layer over time to widen the gap,” he said. “What the Census data is showing us is the long tail of those accumulated gaps. ... This is where visibility matters. The more complex your pay structure, the more disciplined your monitoring needs to be.”

Addressing Pay Equity

Closing the gender pay gap should necessitate an expansion of proactive compensation and equity reviews by employers and their TR professonals, said Levine.

“Employers should maintain progress achieved on pay equity in recent years, but they should also move to the next critical issue: equity in career opportunity,” he explained. “The pay gap is more about women and men sitting in different roles than it is about women and men being paid differently in comparable roles. Ensuring equal access to the high-paying roles is critical, and that can be achieved by extending the annual equity review to include a review of equity in promotion decisions.”

Levine advised employers to perform a regular pay equity review, aligned to the compensation calendar and reporting requirements.

“The review can be seamlessly integrated into the merit or mid-year cycle,” he said. “It can invariably reveal pay differences that should be considered and, where appropriate, addressed through pay adjustments concurrent with merit and/or market changes.”

“Pay equity isn’t just a compliance number — it’s a continuous signal. You have to listen to it often.”

— Vismay Gada

In addition to a pay equity review, Gada offered the following tips:

• Move from annual pay audits to ongoing awareness.
• Build real-time visibility through, for instance, dashboards that flag pay anomalies as they happen, not after the fact.
• Connect compensation data to promotion, transfer, performance and turnover data to understand where the inequities originate.
• Link equity goals to leadership accountability and make it part of the scorecard, not just an HR initiative.
• Give managers context and data before they make pay decisions.
• Communicate progress often, as transparency builds trust.

“Pay equity isn’t just a compliance number — it’s a continuous signal,” Gada said. “You have to listen to it often.”

“Which side of the trend will an organization be on? Every organization will have to decide whether pay equity is an opportunity to lead or a burden to defend.”

— Vismay Gada

Will This Trend Continue?

Despite the current widening, Levine predicts the gender pay gap will fall in the longer term.

“Pay equity review processes have become best practice and are embedded at many firms, and the EU Pay Transparency Directive, now going into effect, will force companies with operations in the [European Union] to share information on pay equity with employees and report on results regularly,” he said. “Companies striving for consistent, across-the-board review will need to up their game to respond to what is an increasing array of requirements.”

But Gada warned if wage growth continues within industries where women are underrepresented, progress may be stifled or nonexistent. “Without structural shifts, the pay gap won’t close on its own,” he said.

Gada also noted organizations that make pay equity a business priority rather than a compliance exercise are actively taking steps internally to reverse the trend.

“When pay reviews are data-driven and transparent, and manager decisions are backed by analytics, progress happens fast,” he said. “The bigger question is, which side of the trend will an organization be on? Every organization will have to decide whether pay equity is an opportunity to lead or a burden to defend.”

Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics:

• Employee Compensation
• Equitable and Diverse Workplaces
• Total Rewards