Gender Pay Disparity Creates Pension Gap

December 10, 2003 ( - Females may make 20% less than their male counterparts in the workplace, but the real impact lies in the pension gap this differential creates.

If a women on average earns $10,000 annually less than a man doing the same job, over a 40-year career, that could amount to women losing out on millions of dollars for retirement, Betty Spence, president of the executives’ group of the National Association for Female Executives (NAFE) told Reuters. The long-term effects of this disparity create a massive pension gap for women, who tend to live longer than men.

Further exacerbating the problem according to Spence is that fewer women receive pensions from their employer. Whereas nearly half (47%) of men receive pension, only 30% of women do. This in turn leads to a dramatic divergence of annual earnings of women and men over age 65. Men over 65 take in an average of $39,000 annually, including savings, Social Security payments and pensions. Women over 65, on the other hand, take in 63% less, an average of $14,200 annually, Spence said.

Spence said the difference are even more pronounced for women in the fields of law, advertising, accounting or public relations, where women make an average of $20,000 less than men annually in comparable jobs. This doubles the average of $10,000 less than American women make than their male peers, a NAFE study found.

Also, NAFE found male print journalists make $9,000 more a year than their female cohorts, male executive directors of nonprofit groups earn salaries that exceed women’s by 19% and male psychologists out-earn women by 25%. In some jobs though, the gap was smaller. For example, the survey found that television news directors who are women make $4,000 less than men.

Concurring With GAO

The survey by NAFE echoes findings last month by the General Accounting Office (GAO). The GAO found women in the United States on average are paid 20% less than men (See GAO: Women Paid Less Than Men ). This differential the GAO attributed to a number of different factors, including:

  • women have fewer years of work experience
  • women work fewer hours per year
  • women are less likely to work a full-time schedule
  • women leave the labor force for longer periods of time.

However, even with looking at work experience, education, occupation and industry of current employment, and other demographic and job characteristics, the GAO’s model can explain about half of the difference, leaving an unexplained wage gap of approximately 20%. To this the GAO says, “some of the factors that contribute to an earnings difference affect men and women differently, but we cannot explain why.” This was due in part to the “inherent limitations in the survey data and in statistical analysis,” the GAO said.

Spence though thinks the problem can be attributed to the human condition.“No matter how much you try to explain it away, there is somewhere between a 12% to 20% wage gap that can only be attributed to discrimination,” Spence said.