The Gender Pay Gap
Occupations were once segregated by sex. While the practice was ultimately deemed illegal in 1968 by the Equal Employment Opportunity Commission (EEOC), it likely contributed to the pay gap between men and women.
Over time, that pay gap had steadily narrowed. With Title VII’s prohibition of discrimination in all aspects of hiring, women entered more occupations that had been dominated by men and began working in the same jobs requiring equal skill, effort and responsibility, in the same facilities, under similar working conditions, and were paid the same as men performing the same jobs, as required by Equal Pay Act.
Unfortunately, the pay gap has begun to widen again. From 2022, when women were earning 84 cents for every dollar a man earned, it fell to 81 cents in 2024, according to the Census Bureau.
While it is too soon to pinpoint the root causes of the change or determine if this is a temporary shift, several factors may be contributing to this dynamic.
Potential Cause. Return to work mandates (RTO) are growing and more women are leaving jobs with companies who have them and are looking for other alternatives. A study by Baylor University found that firms mandating RTO experience an average 13-14 percent increase in turnover rates, with women being more likely to leave than men.
The lack of flexibility arising from these mandates is another reason cited for women’s departure. To maintain flexibility, they are more likely to make tradeoffs: taking a lower position with less pay elsewhere, moving to another industry with a demotion, or taking time away from the workforce.
Closely related to the lack of flexibility is the lack of family-friendly policies, such as paid family and medical leave. The rising costs of and disappearing options for childcare also remains a persistent barrier and is contributing to the pay gap.
The Effect. While some women may view willingness to take pay cuts as temporary solutions to immediate problems, there are long-term consequences for making this choice:
Disadvantageous resume gaps, especially for women on a career trajectory
The risk of returning to lower-level positions just to break back in
Lost or delayed promotions, leading to lost wages
Lower earnings in retirement (less money contributed to a 401K plan) and lower social security benefits which are based on earnings.
Consequences for the employer with RTO mandates include:
Female turnover increases are nearly three times higher than that of males.
Mid- and top- level managers leave in higher numbers than junior staff.
High-skilled employees are more likely to leave compared to low-skilled ones.
Reduction in competitiveness
Departure of employees who are the hardest and costliest to replace
For organizations which are building and maintaining positive workplace cultures, RTO mandates can have the long-term effect of disengaging—rather than engaging—employees and creating a culture that is exclusive rather than inclusive.
Are we forcing 20th century rules on 21st century workers?