How the US Pay Gap Works
The gender pay gap represents the difference between median earnings for men and women in the same occupation. In the United States, this gap persists across nearly all industries and professions, though its magnitude varies significantly by race, ethnicity, and job category.
Several overlapping factors contribute to observable wage differences:
- Career interruption: Women are more likely to take extended time away from paid work for caregiving, resulting in lost wage growth and seniority.
- Occupational segregation: Men and women cluster in different roles; fields traditionally dominated by women often pay less than male-dominated fields.
- Negotiation patterns: Research shows wage negotiation behaviour differs by gender, affecting starting salaries and raises.
- Discrimination: Unexplained portions of the wage gap point to direct or indirect discrimination based on gender or race.
Ethnicity compounds these disparities. Black women, Latina women, and other women of colour typically face compounded gaps relative to White men.
How the Calculator Estimates Your Hypothetical Earnings
The calculator multiplies your entered salary by the pay gap percentage for your demographic group and occupation combination. This reveals what you might earn if you belonged to a different demographic category while maintaining the same role and experience level.
Hypothetical earnings = Your current salary × (Median for comparison group ÷ Median for your group)
Your salary— Your current annual or periodic wageYour demographic group median— Median earnings for your gender, race/ethnicity, and occupationComparison group median— Median earnings for the demographic group you're comparing against
The Long-Term Cost of Wage Inequality
Small annual gaps compound dramatically over a career. A woman earning 5% less per year will earn roughly 25% less than a man over a 30-year career when accounting for raises and compound growth.
The National Women's Law Center estimates the typical US woman loses around $403,000 in lifetime earnings compared to a man in the same field. For Black women and Latina women, this figure climbs considerably higher. These lost earnings directly reduce wealth accumulation, retirement savings, and financial security in old age.
Geography matters too. States with stronger labour laws and industries with better pay transparency tend to show smaller gaps. Conversely, regions with weaker protections often see gaps exceed 30% in some occupations.
Important Caveats When Interpreting Results
The calculator's estimates rest on several assumptions—understanding them helps you interpret your results correctly.
- The calculation assumes equal experience and hours — The median wage data reflects actual earnings, which include variations in full-time hours, tenure, and career level. Your personal earnings might differ from the median for reasons unrelated to discrimination, such as seniority, specialisation, or part-time status.
- Occupational categorisation is broad — The calculator groups jobs into large occupational categories. Two people in the same category may have quite different roles, responsibilities, and pay scales. Granular job titles and company sizes reveal much larger variation than aggregate occupation data.
- The gap isn't purely discriminatory — While some of the wage gap reflects discrimination, other portions result from measurable factors like years in the workforce, hours worked, and field choice. The calculator shows correlation, not proof of cause.
- 2018 data may not reflect today's conditions — Labour markets, company policies, and demographic composition shift over time. Your industry or region may have experienced significant change since the underlying wage surveys were conducted. Use results as a rough benchmark, not a guarantee.
Closing the Wage Gap: Evidence and Action
Organisations and individuals both play a role in narrowing inequities. At the workplace level, salary transparency—making wages visible to employees—consistently reduces unexplained gaps. Companies that conduct regular equity audits and tie executive compensation to diversity metrics see faster progress.
Policy interventions matter too. States that ban salary history questions, require pay equity analysis, and enforce equal pay laws show measurable improvements. On a personal level, negotiating aggressively at hire and promotion, seeking mentorship, and moving to higher-paying roles faster can offset some of the structural gap.
Individual action compounds: a woman who negotiates a 5% higher starting salary and continues negotiating every promotion will earn substantially more by mid-career than a peer who doesn't.