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Income Gap Between Men and Women Narrows as Another Gap Widens

Although the gender pay gap has narrowed, the overall economic gap has widenedAccording to David Wessel of the Wall Street Journal, over the past few decades, the gap between women's wages and men's has narrowed substantially— but the gap between economic winners and losers of either gender is gradually widening.

In fact, not only have women managed to narrow the income gap, but they have also begun to outpace men in obtaining college diplomas. If we take a look at the past, we cans clearly see the remarkable strides that women have made over the past four decades:

  • Earnings: Up until the 1980s, women who worked full-time earned less than 60 percent of what men earned. As women began moving into more high paying jobs that were once reserved for men, the income gap began to narrow. In 2006, the US Census Bureau estimated that women earned 77 percent of what men earned. Though it is still less, it does amount to a substantial gain.
  • Education: In the 1960s, for every woman who graduated from a four year college there were 1.6 men. By 1980, that number was equal, and today, there are1.35 women graduating from four year colleges for every one man.
  • Career Choice: In the 1970s more than half the 30-something working women with college degrees were teachers. Now the amount of women teaching is less than 20 percent, a statistic that indicates that women are choosing higher paying careers that the original mainstay of teaching.

These gains are proof positive that women have made great strides in the workplace since the 1960s (and that they still have a long way to go). Yet at the same time, the gap between economic winners and losers has widened. The reason this gap has widened is because of the fact that over the past forty years, the benefit of getting a college education has increased exponentially.

Wessel says that "the payoff for getting a diploma traditionally [is] greater for women." And he’s right, because as the demand for workplace diversity increases in the workplace, the competition among firms for women and diversity employees becomes more intense. To win women and other diversity candidates, most companies sweeten the pot by offering greater incentives in the form of higher base salaries, increased chance for promotion, and better benefits packages.

As a result, a college education is much more valuable than it was four decades ago. Conversely, the penalty for not going to college has also increased. These days, the vast majority of individuals who choose not to get a four year degree (there are some exceptions, of course) can expect to earn about $900,000 less than their college graduate counterparts over their lifetime. The most recent statistics compiled by the US Census Bureau show that the higher the level of education one attains (regardless of gender or race), the more income one will earn over a lifetime.

The culprit responsible for the widening gap between economic winners and losers is clearly education. The key to closing this widening gender neutral economic gap is getting more education. And as more of the lower paying, high school education only jobs move overseas, getting an advanced degree will continue to emerge as the best path to success.