- Gender pay gap persists. Payscale’s Gender Pay Gap Report found that in 2024, for every $1 that men make, women will earn 83 cents. It also found that women still earn only 99 cents for every dollar earned by a man in a similar role.
- Pay transparency is relatively new. As more states pass pay transparency laws, more companies will be required to comply, leading to a bigger impact on the pay gap.
- Contributing factors. Factors such as “the motherhood penalty” and the opportunity gap contribute to wage disparity.
- Narrowing the racial wage gap. The controlled pay gap closed in 2024 for American Indian and Alaska Native, Asian, Black, and Hispanic women, according to the report.
Despite a growing number of pay transparency laws, the overall gender pay gap has not closed, according to Payscale’s 2024 Gender Pay Gap Report. The report, which analyzed data from over 627,000 people in the U.S., found that in 2024, for every $1 that men make, women will earn 83 cents. It also found that women still earn only 99 cents for every dollar earned by a man in a similar role. The numbers are unchanged from 2023.
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It isn’t surprising that recent pay transparency laws haven’t eliminated the gender pay gap, given that they are relatively new, said Lulu Seikaly, corporate counsel at Payscale.
But that doesn’t mean they’ve had no effect at all.
In fact, pay transparency laws have had an impact in some of the states where they have been implemented so far, said Christine Hendrickson, vice president of strategic initiatives at Syndio.
When Syndio analyzed census data from 2011-2022 on median pay by occupation in six key states that have passed pay transparency legislation, it found that occupational gender pay gaps have closed more quickly in four of them — Illinois, Colorado, Washington and Massachusetts — than they have nationally.
Seikaly expects pay transparency laws will continue to be introduced and to have a positive effect on the wage gap. “We know that legislators understand how important pay transparency laws are to closing the gender pay gap, as we saw over a dozen states propose some sort of pay transparency law in 2023,” she said. “In 2024, we already have half a dozen states proposing some sort of pay transparency law.”
As more states pass laws, Seikaly added, more companies will be required to comply, leading to a bigger impact on the pay gap.
In the meantime, employers should understand what factors are driving the gender pay gap in order to create a more equitable workplace.
‘The Motherhood Penalty’
Women who have children earn only 75 cents for every dollar earned by their male parent counterparts, according to Payscale. But when factors such as occupation, experience and education are controlled, pay parity is achieved between men and women who do not have children.
This points to bias about women’s roles, said Ruth Thomas, pay equity strategist at Payscale. “Women are expected to leave the workforce to become mothers, while men in general are not,” she said. “This results in unbalanced representation across workforces, occupational segregation and career choices influenced by caregiving responsibilities.”
Payscale’s report also found that women who work from home experience a wider pay gap (79 cents per dollar) than their in-office counterparts (89 cents per dollar) and that women who are planning to change jobs in the next six months see a narrower pay gap than those who aren’t (84 cents vs. 80 cents).
Both decisions — to work from home and to remain in a current position — can result from mothers needing greater flexibility to handle child care responsibilities, Thomas said.
“People make more when they change jobs more frequently, regardless of gender. But both men and women are job seekers, so it’s very interesting that the pay gap is narrower for women who are seeking a new job in the next six months,” she said. “It may be that women who remain at their current jobs do so because of flexibility benefits that accommodate motherhood to some degree, but loyalty also appears to negatively impact their earning potential.”
To address “the motherhood penalty,” Thomas said, employers should take a hard look at their parental leave policies (for parents of all genders), consider flexible work hours, implement work-from-home policies without pay penalties, hire mothers reentering the workforce and implement pay progression that rewards loyalty.
The Opportunity Gap
The gender pay gap also widens as women age, primarily due to women holding lower-paying jobs.
“The pay gap is not only about pay, it’s also about equal access to opportunities,” said Syndio’s Hendrickson. “Employers have been laser-focused on ensuring equal pay for equal work — and there has been significant momentum and progress made by employers performing proactive pay analyses and complying with pay transparency legislation — but it’s not enough.”
Syndio analyzed data from the U.S. Equal Employment Opportunity Commission and found that white men occupy 56% of top-paying jobs and 42% of mid-level management positions, despite accounting for only 30% of employees. This makes white men 1.9 times more likely to hold top-paying jobs than white women, 3.6 times more likely than men of color and 5.6 times more likely than women of color.
“Employers will need to expand their view to understand what might be driving the opportunity gaps in their companies,” Hendrickson said. “This is becoming much more than a nice-to-have because some laws that currently exist require that if employers cannot explain the reason for the gaps, they must make action plans to correct them.”
Racial Wage Gaps Narrow
There is some good news from the Payscale report: The controlled pay gap closed in 2024 for American Indian and Alaska Native, Asian, Black, and Hispanic women. Previously, Black and Hispanic women experienced the largest gender pay gaps when data was uncontrolled.
The report attributes this progress to expanded opportunities and negotiating power during the Great Resignation; impacts from newly launched diversity, equity and inclusion programs; and pay transparency legislation.
“Building fair pay practices and getting your house in order is essential. This means establishing a compensation philosophy that embeds fair pay, benchmarking your roles and building ranges supported by budgetary restrictions,” Seikaly said. “When organizations prepare their ranges before making an offer to a candidate, this will help them close any gender pay gaps they may have internally and, most importantly, prevent them from creating pay gaps.”
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