The Gender Pay Gap: Economic Impacts and Strategies for Closing the Divide 

December 15th, 2024

Sophia Muro, University of Texas Rio Grande Valley

In a college student atmosphere, they teach that business is not just about balancing numbers—it  is about recognizing patterns, understanding trends, and addressing disparities. One of the most  persistent and troubling trends in the global workforce today is the gender pay gap. Despite  advancements in gender equality, women continue to earn less than men for doing the same  work, or work of equal value. This issue is not just an isolated problem but a widespread, global  challenge that affects women in every country and industry. 

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In the United States, the gender pay gap remains significant. According to the U.S. Bureau of  Labor Statistics, in 2023, women working full-time earned 83 cents for every dollar a man earned. While this figure has improved over the past few decades, the gap is still substantial. For  example, in the field of accounting—my future profession—the gender pay gap is noticeable. A  2022 study by the American Institute of CPAs found that female accountants earn approximately  8% less than their male counterparts, even though both groups hold similar qualifications. The  gap is even larger at senior levels. Female CPAs in leadership positions report earning about  10% less than their male peers, despite having equivalent experience and responsibilities. 

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Globally, the gender pay gap is even wider. According to the World Economic Forum’s 2023  Global Gender Gap Report, women worldwide earn only 68% of what men make on average,  with the gap being particularly pronounced in developing nations. In countries like India, women  earn only 63% of what men do, and in Japan, the gap is about 24%. This wage inequality is not due to women being less skilled or qualified. Rather, it is rooted in societal norms, historical  discrimination, and gendered expectations in the workplace.

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One key factor contributing to the gender pay gap is occupational segregation. Women are often  concentrated in lower-paying industries like healthcare, education, and retail, while men  dominate higher-paying sectors such as finance, engineering, and technology. For example, in  the tech industry, despite the growing number of women entering the field, men still outnumber  women in higher-paying technical roles, such as software engineering and data science. As of  2023, women hold only about 25% of STEM (science, technology, engineering, and math) jobs,  and the pay gap between men and women in STEM fields is around 20%. 

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Another major factor is the “motherhood penalty.” Women, especially mothers, tend to  experience slower career progression due to their caregiving responsibilities. Research from the  National Bureau of Economic Research shows that mothers are less likely to be hired for higher paying jobs and are paid less than women without children. In fact, a 2019 study found that  mothers earn about 5% less per child, a phenomenon that men—who are not typically expected  to take on the same caregiving roles—do not face. This can lead to a lifetime of wage disparity,  which compounds over time.

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The gender pay gap is not only a moral issue but a financial one. Numerous studies show that  companies with greater gender diversity are more profitable. A report by McKinsey & Company  found that businesses in the top quartile for gender diversity are 25% more likely to have above average profitability. When women are paid fairly, they contribute more to the economy, not just  through their work but also through increased consumer spending, investments, and community  involvement. Closing the gender pay gap could boost global GDP by $12 trillion, according to  the McKinsey Global Institute. 

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So, what can businesses do to reduce the gender pay gap? The first step is transparency.  Companies need to conduct regular pay audits to identify, and address pay disparities. They  should also offer clear career advancement pathways for women and implement policies that  support work-life balance, such as paid parental leave, flexible hours, and remote work options.  Additionally, businesses should invest in mentorship programs for women and ensure equal  representation in leadership roles. Governments also play a role by enforcing equal pay laws and  encouraging gender diversity in all sectors. The gender pay gap is a complex issue with no  simple solution, but with concerted effort from both businesses and policymakers, we can make  progress toward closing it. For the sake of fairness, economic growth, and social justice, it is time to level the playing field and ensure that women are paid the same as men for the same  work.