The gender wage gap gets worse as women age, with an acute uptick when they start having children. But that doesn’t mean young women start out on an even playing field.
In a recent survey of more than 1,600 Millennials, or those ages 22 to 33, Wells Fargo found that men have a median household income of $77,000, while women make $56,000. That’s a nearly 73 percent gap, compared to the overall 77 percent gap for women working full time, year round compared to men. The gap narrows a bit for college graduates: women make $63,000 a year while men make $83,000 a year, about a 76 percent gap.
Other analyses have found a smaller gap for young women. Last year, the Pew Research Center found that women ages 25 to 34 made 93 percent of men’s hourly earnings, compared to an overall hourly earnings gap of 84 percent. But another study found that despite graduating from similar colleges with the same grades, majors, degrees, and occupations, young women make less in their first job out of school than men. Even female Harvard graduates make less fresh out of school than male ones.
A wage gap among young women, particularly college-educated ones, is striking because it comes before some causes of the wage gap kick in. About 10 percent of the gap can be attributed to women taking time out of the workforce or going part time, often to care for children. Women’s wage growth starts to level off around age 30, when they often start having children, while men’s keeps growing, increasing the gap. But even before these things happen, young women start out making less.
The Wells Fargo survey notes that this wage gap is creating other gaps for young women. College-educated Millennial women have only built up $31,400 in investable assets, while men have $58,500. And young women are having a harder time saving for retirement. Just half of women are putting money away, compared to 61 percent of men, and most women who do save are putting money away at lower rates. Just 41 percent of women are satisfied with what they have shored up versus 58 percent of men. Those who aren’t saving of both genders say it’s because they don’t have enough money to do so — and for women who are making less, that problem will be more pronounced.
Although older women end up contributing money to IRA retirement accounts at the rate as men, they still save up less. Men have an average IRA balance of $139,467, while women’s is $81,700. That’s particularly worrisome as women tend to live longer and outlive their husbands. Many of them fall into dire poverty in old age.
Millennial women are also struggling with student debt. Much has been made of the fact that women are graduating college at higher rates than men. But 45 percent feel overwhelmed by debt, compared to a third of men.