Key Findings on Inequality and Discrimination in the US

Posted by Tamara Franklin of AYTM

At the Insighter Virtual conference, Melissa Gonsalves – Co-Founder & Director, Colour of Research (CORe) & Director of Strategic Insights at Differentology delivered a riveting presentation titled, ‘Equality in an Unequal World.’

She tackled the hard-to-swallow facts on how imbalanced the world currently is due to rife inequality. She also dove into the very timely topic of diversity and how you can use it to enrich your market research.

In this post, I’ll share some key learnings, strategies, and tools from her presentation to empower you to conduct and use diverse research and build a team that is representative too.

What’s the difference between equality and diversity?

Since one of the goals of this post is to shed light on diversity and equality, it’ll be useful to begin with a few definitions related to these topics:

  • Inequality – A lack of being equal, especially in status, rights, or opportunities. You can categorize inequality into five broad categories: inequality in wealth, gender, ethnicity, sexuality, and health.

  • Equality – It’s essentially the reverse of inequality. All operate on a level playing field with equal opportunities regardless of any differing traits.

  • Diversity – A mixing of people with different characteristics—for example, race or nationality.

  • Discrimination – Discrediting or disadvantaging someone based on (a) characteristic(s) they possess. For instance, gender and race.

  • Controlled Gender Pay Gap – The controlling of the pay gap according to factors like job positions, years of experience, and location.

  • Uncontrolled Gender Pay Gap – The raw gender pay gap which looks at median salaries for men and women, regardless of job or worker seniority.

  • Zero/Negative Wealth – When a person’s debts exceed the value of their assets.

We’ll be looking at wealth, gender, and ethnicity, with cross-sectional examples for better context.

The truth about inequality and diversity in wealth, gender, and ethnicity (+ the statistics)

Without data, it’s hard to know the true extent of an issue. So, it’s time for some eye-opening stats about inequality, diversity, wealth, gender, and ethnicity. Buckle up. It’s going to be a bumpy ride.

Wealth across gender

In an uncontrolled gender pay gap, women earn 81 cents for every dollar earned by a man.

In a controlled gender pay gap, women earn 90 cents for every dollar earned by men. In other words, the median salary for men is roughly 19% higher than the median salary for women.

The gender pay allows you to look at factors such as experience, industry, job level, and education.

You’ll notice when you dig into the data that even when you look at males and females in a like-for-like, apples-to-apples comparison, their earnings differ.

The figure above represents a 2% improvement from 2019 and a 7% increase from 2015. Despite this, the truth is that even when men and women are in the same job and at the same level, a woman still earns about two cents less for every dollar that’s earned by a man.

Putting it another way, you can hold the same role and have identical qualifications and still be paid two cents less, with no other reason except for being a woman.

This figure may not seem like much at first. But when you consider that the average American worked around 1726 hours in 2019, you can see how it can add up to a significant financial loss over the lifespan of a woman’s career.

Stagnating gender wage gap decline

The controlled gender pay gap is the same as last year, and the closing of this controlled gender pay gap has slowed in recent years, shrinking by a dismal 0.01% year on year since 2015.

When you look at the data on male and female earnings and job titles throughout their careers, you gain interesting insights, which Melissa called the binary gender pay gap.

For instance, under this framework, you can assess two positions at opposite ends of the earnings chart, like Fortune 500 CEOs and minimum-wage workers side-by-side.

You’ll notice that white males particularly dominate in terms of income. This is because they often have lucrative financial industry jobs.

To put this into context, around 95% of Fortune 500 CEOs are white men, with the remaining 5% being made up of women and ethnic minorities.

A good example of this disheartening statistic can be found by looking at the top five US investment banks. JP Morgan Chase, Goldman Sachs, Bank of America, Merrill Lynch, Morgan Stanley, and the like. They are are ALL run by men from the top down.

This disparity is so ingrained in society that when Citigroup announced their first-ever female CEO, Jane Fraser, the news broke the internet.

There was so much noise about it because Wall Street has existed since 1817, and it’s taken them 200 years to put a woman to the top position.

Conversely, if you look at minimum wage workers, you will see a high proportion of women (over 60%) who hold jobs that fall into this category. So, the most lucrative roles are held by men, and women occupy jobs that pay the least.

Even if you slice this data by ethnicity, the trend remains the same. There is a massive disparity between men and women.

Looking at the data in this way provides a logical explanation of why there is a gender pay gap.

Discrimination is fueling the gender pay gap

People often express that they don’t understand why women are paid less than men.

Data can help to clarify the reasons behind this trend. In 2017, a Pew Research survey found that 42% of female respondents had experienced gender discrimination at work, compared to 22% of male respondents.

This is evident in our everyday lives. For example, American women earn less than men on average in all industries.

The largest pay gaps exist in management positions where men take home around $88,000 a year and women around $55,000. The smallest gap is in the construction sector, where women make up about 9% of the workforce.

There’s a smaller earnings gap because fewer women are working in this industry, not because huge strides in increasing equality have been made.

Discrimination in the working world is rife. One of the most reported forms of discrimination is wage inequality.

25% of women say they’ve earned less than men doing the same job, compared to 5% of men experiencing the converse.