Invest1 publisher3 min readPublished
Women take a US payroll majority while starting careers at 83 cents on the dollar
The class of 2023 started at $59,778 for women against $72,190 for men, so the payroll crossover that arrived without a recession behind it comes with a $12,412 gap measured before anyone's first promotion.
The Investor · Invest desk
What happened
- Women hold more payroll jobs than men in the United States for only the third time in the country's history, and this is the first of the three crossovers to arrive without a recession behind it.
- The earlier majorities came briefly around 2010 and again in early 2020, both after downturns had wiped out male-dominated jobs in construction and manufacturing.
- A National Association of Colleges and Employers study puts class-of-2023 bachelor's starting salaries at $59,778 for women and $72,190 for men, about 83 cents on the dollar.
- Over the past 12 months the number of employed women rose by more than 870,000 while men shed nearly 1.5 million jobs, according to Bureau of Labor Statistics data.
- In August's report women accounted for 158,000 of the 162,000 positions created, leaving men with 2% of the month's additions.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- cost Women of color carry the heaviest share of the bill, losing more than $1 million over a career against $542,800 overall, roughly 1.8 times as much, so a remedy sized to the average under-serves them by close to half.
- constraint Employers recruiting into male-dominated roles are drawing on a pool with roughly 7 million fewer employed men than in the 1990s and participation for men over 20 down 6.4 points in two decades.
- decision With women two-thirds of low-wage workers, outnumbering men 8 to 1 in nursing and under a third of science and engineering staff, a firm auditing its own pay bands is answering a narrower question than the national average poses.
- contradiction Fortune's account carries two incompatible causes for men's retreat: video games as "the crisis of the American male", and Levin and Vidart's argument that weak entry-level markets make young men opt out. Only the second implies a rebound when hiring improves.
The $542,800 career gap spread over 40 years is $13,570 a year [2]. The spread on the first day, $72,190 against $59,778, is $12,412 [1]. A woman leaving campus in 2023 therefore began about 91% of the way to the average annual gap of an entire working life [3]. Fortune gives the career number as a total and does not state a dollar basis, so the annual figure is a rough marker.
That sequencing is hard to square with the research Fortune cites. Claudia Goldin's Nobel-winning work found early-career pay gaps relatively small until a woman has her first child, after which her earnings fall and never climb at the same rate as those of men who become fathers, even when profession and education match [13]. Fortune calls parenthood the single biggest driver of the gap [21]. The entry cohort sits two cents above the 81 cents women earn across the whole workforce [8][9].
Two cents leaves little room for the biggest driver. The likelier reading is that the two averages are averaging different mixes of jobs: August's gains came from health care, education and hospitality [6]. A national starting-salary average taken across fields whose pay levels sit that far apart measures who went where as much as what anyone was paid for the same work.
Men took 4,000 of the 162,000 positions added in August [5]. Across twelve months the relative change is about 2.37 million jobs, adding what women gained to what men lost [4]. Laura Ullrich, director of economic research at the Indeed Hiring Lab and a former senior regional economist at the Federal Reserve Bank of Richmond, told Fortune: "This seems to be more of a long-term decline that's led to a more permanent shift going forward, or at least a semi-permanent" [14][15].
I would expect this majority to outlast the previous two, because the sectors producing it are still adding jobs every month [6]. The counter is real. A swing of that size is small against total payrolls, and one ordinary year of hiring in male-dominated construction and manufacturing could run it back the other way [2].
What would settle the pay half is offer data by major and by employer. If women's and men's engineering and finance offers converge while the national spread holds, the entry gap is a field-choice problem and no internal pay-band review will close it. The later gap has separate candidates: Fortune reports post-pandemic return-to-office mandates have disproportionately hit mothers who are primary caretakers [19].
Ullrich, on August's hiring: "You could look at it and say, 'Yay, women.' But I don't think it's necessarily a positive story for women overall," she said [16].
What to watch
- Whether construction and manufacturing resume hiring fast enough to reverse a twelve-month employment swing of this size.
- NACE's class-of-2024 and class-of-2025 starting salaries, and whether the bachelor's-level dollar spread narrows.
- Whether male participation for the 20-and-older group stabilises at 69.4% or keeps sliding.