Report: Women’s pay gap starts first year out of college

AUGUSTA, Maine — A new study that compares what women and men earn during their first year after college reveals that female graduates pocket 82 cents for every $1 their male classmates are paid.

Adjusted to reflect occupation, college major choices, hours worked and other compensation factors, the gender pay gap shrinks but remains significant, American Association of University Women researchers Christianne Corbett and Catherine Hill wrote in “Graduating to a Pay Gap,” which the association released Wednesday.

“Our regression analysis finds that just over one-third of the pay gap cannot be explained by any of these factors and appears to be attributable to gender alone,” Corbett and Hill wrote. “That is, after we controlled for all the factors included in our analysis that we found to affect earnings, college-educated women working full time earned an unexplained 7 percent less than their male peers did one year out of college.”

The study compares earnings of male and female college graduates who were working full time in 2009, the most recent year for which data is available.

Nationally, women who were working full time, year-round in 2011 earned 77 cents for every $1 their male counterparts made, according to U.S Census bureau data. That represents an increase from 61 cents in 1960, but shows virtually no change since 2000.

In Maine, a comparison of the median annual earnings for men and women older than 16 who were working full time in 2011 shows that women earn 79 percent of what men do, according to the American Association of University Women’s interpretation of census figures. The state ranks 21st in terms of gender pay equity, although the gap in Maine is slightly slimmer than the national average of 77 cents earned by women for every $1 earned by men. Washington, D.C., ranks first at 90 percent, followed by Vermont at 87 percent.

The report also notes that the pay gap exacerbates the effect of student loan debt on female graduates. While male and female graduates incur relatively equal amounts of student loan debt, women who receive lower pay must devote a higher percentage of their earnings to paying off student loans.

Corbett and Hill chose to focus on full-time workers who are in their first year after leaving college because the grouping provides a common measure of compensation for men and women. Before factoring in hours worked, occupation and educational major choices, they determined that women in the study group earned $35,296 annually while men earned $42,918.

The researchers examined whether the type of college that graduates attend, how well they perform academically and what majors they choose affect their immediate earnings potential.

In comparing graduates of private and public colleges and universities, Corbett and Hill discovered that, regardless of which type of institute of higher learning they attended, women earned roughly 81-86 percent of what their male classmates did. The greatest difference occurred among graduates of private universities, where female graduates earned 75 percent of what their male counterparts did.

Despite the fact that women scored a slightly higher grade-point average, and that pay tended to increase for those who received higher grades, the compensation gap remained essentially unchanged.

Corbett and Hill found that a higher percentage of new female college graduates entered education and health care, which yield lower compensation than such fields as business or engineering that attract a higher percentage of male graduates. But even in those occupations, men earned more than women. Male business majors earned a little more than $45,000 on average, compared with $38,000 for female business majors.

While men reported working more hours during their first year after graduation than did women, that factor and occupation choice did not account fully for the gender gap in compensation.

“One might expect that when you compare men and women with the same major, who attended the same type of institution and worked the same hours in the same job in the same economic sector, the pay gap would disappear,” Corbett and Hill wrote. “But this is not what our analysis shows.”

The researchers attribute the difference to discrimination. “Yet discrimination is impossible to measure directly, and many who discriminate — both men and women — may not be aware that they are doing so. For all of these reasons, it is likely that at least part of the unexplained gap results from discrimination,” they write.

Emily Kane, a sociology professor at Bates College in Lewiston, offers another possible explanation. In the same way that part of the pay gap can be attributed to the fact that female graduates choose education and social work, even within business and technology, female students are probably more likely to focus on specific professions that are less well compensated, she said.

As remedies, the report lists a series of recommendations for employers and policymakers. Among them are to “strengthen pay equity laws, and pass the Paycheck Fairness Act (S. 797/H.R. 1519);” increase workplace pay scale transparency and equity; establish clear, gender-neutral evaluation structures; and pass regulations that reduce stress created by student loan debt.

Corbett and Hill recommend that students research career choices before choosing a major, hone negotiating skills, educate themselves about college loan and grant programs and seek union jobs, which have a greater likelihood of pay equity.

“I am not at all surprised. In fact, it’s a little better than I thought it would be,” Laurie Lachance, president of Thomas College in Waterville, said in response to a summary of the report’s findings. She cited the Maine Development Foundation’s annual Measures of Growth reports, which have shown gender-based pay inequities in Maine for years.

As for how she as a college president addresses the issue, Lachance said the only thing over which she has direct control is that Thomas College treats its employees fairly.

“However, in terms of guiding young women as they enter the workforce, we work on empowering young women — and young men — to advocate for themselves. When we set them free to the marketplace, we try to make sure that they know their worth and that they advocate for themselves.”

Laura Harper, director of public policy for the Maine Women’s Lobby, agreed that women negotiating their first salaries “might not feel empowered — or when they do attempt to negotiate strongly, it’s not received well by some employers.” A national organization called the WAGE Project now visits campuses to teach women how to negotiate better.

“That’s got to work in both directions,” said Kane, suggesting that unrecognized discrimination in negotiations might be the most insidious aspect of the dynamic. “Everyone’s push for a fair salary rate is legitimate. Men’s aggression might have been met with a more positive response because of old-school thinking that men need the salary to provide for their family. Employers should just be thinking about what the position is worth.”

A 2009 state law that protects workers from employers’ retaliation if they share information about their wages with co-workers is a small step to help uncover wage discrimination and encourage discussion about it, Harper said.