On July 27, 2016, HIMSS published the results of a longitudinal study on how women and men are compensated in the US health IT marketplace. Our data comes from self-reported responses to our biennial compensation study covering the years 2006-2015. Our findings show that, on average, women health IT workers have consistently been paid less than their male peers. Moreover, the evidence suggests the gap between male and female compensation rates has widened in the past decade. That’s correct: the gap widened. It did not narrow, nor did it remain the same.
I wanted to understand better what’s at-play when it comes to compensation and how men and women have been paid over the years in the United States. And, I want to share it here with you because I firmly believe that knowledge precedes improvement. As we better understand a complex issue, we are increasingly well-equipped to solve it. I’m therefore writing a series of blog postings on this topic, starting with the history, and real-world impact of gender-based compensation disparities in the United States.
A historical perspective on equal pay: In the early history of the United States, women earned about 30¢ for every dollar men earned. By 1885, women earned about 56¢. Fast forward to 1963 in which President Kennedy signed the Equal Pay Act. This law was designed to eliminate wage discrimination based upon gender. The Equal Pay Act, in part, helped the amount women earn compared to men rise to 60¢ in the 1960s. From then until 2015, the amount women earned increased to 79¢ compared to a male peer’s $1.00.
According to the Bureau of Labor Statistics, on average in 2011, the narrowest gap between male and female compensation was in 25-34 year old full time workers. This group of women earned about 92¢ compared to their male peers’ $1.00. Let’s do the math on this seemingly innocuous difference of 8¢.
An 8% pay gap means that over 41 years, a female health IT worker with a starting annual salary of $40k receiving consistent 3% annual merit increases will earn $273,748 less than her male peers!
Women in the workforce: Let’s say we have a 25-year-old woman making $40,000 annually. Using the BLS statistics noted above, in that same year her 25-year-old male peer made $43,480. Now, let’s say that both individuals are working until age 65, they each receive annual raises of 3%, and that 8% gap between the female and male’s wages remains a constant over their careers. How much does that difference add up to? Over 41 years, the woman has earned a whopping $273,748 less than her male peer.
Women make up 47% of the US workforce. According to the Pew Research Center’s assessment of the 2010 census, 40% of US households with children under the age of 18 are provided for solely or mainly by a woman’s earnings. That $273,748 in potential lost compensation is real money that affects real families. This is an economic issue for our society to continue working towards redressing.
Long-term outcomes of the pay gap in the health IT sector: According to our 2015 compensation study, on average men in non-executive management roles who had been in their positions 5-9 years earned $116,580 compared to female peers earning $108,637 – a 6.8% compensation gap. This time, let’s create an example in which a man and woman in these positions are 40 years old, will continue working full-time until 65, receive 3% raises annually, and that the 6.8% compensation gap stays constant. Over 26 years, a woman will earn $306,227 less than her male peer.
As discouraging as this is, I believe we can do better. Indeed, I hold up analysis in our longitudinal study that shows compensation reported by professionals in health IT vendor and consulting firms as evidence that we can close the compensation gap. As you read the study, you’ll see that the overall pay gap for females in 2015 was 8.2% less than men, an improvement from the 12.6 % gap in 2008. Perfect? No. But it’s a marker proving that we do not need to be resigned to the status quo. We can – and will – do better.
Knowledge precedes improvement. As you think about the numbers I shared above, I encourage you to read more on this topic. There are numerous statistical studies conducted by highly-credible sources such as, but not limited to, those I’ve included in this blog. My next postings will be an exploration of why this compensation gap exists (there are numerous theories) and what actions we can all take to eliminate the gap.
I welcome your stories, experiences, and learnings. Please share with us. We want to hear from you.
For the past nine years, the average FEMALE health IT worker consistently made less than their MALE peers.
From 2006 to 2015, the compensation disparity between MALE and FEMALE Health IT workers widened:
- In 2006, FEMALES on average made 81% of their MALE peers.
- By 2015, FEMALES on average made 78% of their MALE peers.