clock menu more-arrow no yes

The gender wage gap is smaller in tech, but it will hurt the economy more

Paying women less will cost tech companies plenty.

A woman at a rally holds a sign reading “We can do it” with a picture of Rosie the Riveter.
Women were offered 3 percent less than men for the same tech job at the same company last year.
Spencer Platt/Getty Images

Happy Equal Pay Day, a holiday whose date, April 2, is meant to symbolize how much longer a woman would have to work into the new year to make the same as a man did last year. That’s an extra three months. Pay inequality transcends most industries, but the situation is particularly critical in the case of tech.

The bad news: Women on the whole in tech make less than men.

The relatively good news: The gap in pay between women and men in tech has decreased a little bit.

Women were offered 3 percent less than men for the same tech job at the same company last year, according to new data from Hired, a job website that focuses on placing people in tech jobs such as software engineer, product manager, or data scientist. That’s slightly less than last year, when the pay gap was 4 percent. Since the hiring is conducted through the website, Hired has visibility into what companies are offering job prospects and what salary those prospects are requesting.

Women of color had it even worse. Latinx and black women were offered 91 cents and 89 cents, respectively, for every dollar offered to a white man for the same role at the same company.

Part of the reason for the pay gap in tech is that women and people of color in general ask for less. They ask for less because they’ve been historically paid less and don’t receive promotions at the same rate as white men.

Across industries, women make about 8 percent less for the same experience and occupation, so women in tech are slightly better off. (The 79 cents for every dollar Equal Pay Day number is women’s median pay compared to men’s, irrespective of job type and experience.) But the long-term consequences for wage disparity in tech could be especially bad as the sector has an outsized impact on the economy.

Tech represents the largest sector of our economy and one that’s growing quickly. Internet technology companies compose more than a quarter* of the value of the S&P 500, an index of the biggest 500 companies in the US based on their market capitalization. That’s up from about 15 percent a decade ago.

Indeed, the tech segment of the S&P got so large that last year the organization decided to move Google, Netflix, Twitter, and Facebook, among other tech companies, into an expanded version of the former telecomm sector, now called the “communication services sector.”

Accordingly, tech jobs are growing much faster than employment in general. They are the jobs of the future. Lower pay for women and people of color in this arena will therefore be more impactful than in areas that are stagnating.

Tech also has some of the highest wages out of any job category, according to data from the Bureau of Labor Statistics. And the difference in absolute dollar amount between what men and women make in tech on a weekly basis is larger than in other major employment sectors, according to data from the Bureau of Labor Statistics.** Therefore, wage disparities in this field more dramatically impact personal wealth, which in turn leads to all sorts of other inequalities.

Finally, women and people of color are not only paid less, they’re less represented in tech fields than in the population at large. One need only look at the diversity report of any major tech company to see that.

And it’s hurting the tech companies.

Women are more likely than men — 32 percent versus 24 percent of the time — to start looking for new work when they learn of a pay discrepancy, according to a survey by Hired. That means it will be harder to retain women at US tech companies, which are already struggling to find enough talent.

“Tech talent is a bit of a bellwether for the economy overall,” Hired CEO Mehul Patel told Recode. “If people are not being treated fairly, those companies are not going to get the best talent. That impacts overall innovation for society.”

* Added Facebook, Alphabet, Netflix, etc., back in to the internet technology sector for this estimate.

** Note that the disparity between weekly pay is partly due to the number of hours worked, though that shouldn’t matter as much in salaried positions.

This article originally appeared on Recode.net.