In 2025, conversations about the gender pay gap are still clouded by outdated beliefs and half-truths. Some assume it’s already been solved. Others believe it exists simply because women “choose” lower-paying jobs. But the data tells a different story one that’s more complex, more urgent, and more actionable.
For leaders who want to create fair workplaces, the path forward starts with understanding the truth behind the numbers especially when pay disparities are broken down by race, age, and caregiving responsibilities. This article separates myth from fact and offers practical steps for employers ready to close the gender pay gap for good.
Gender Pay Gap Myth: “Women Choose Lower-Paying Jobs”
Reality: Career choice plays a role but doesn’t explain the gap
It’s true that some industries dominated by women tend to pay less. But that only explains part of the issue. Women who earn degrees in high-paying fields like engineering or finance still face wage gaps right out of college. In fact, recent data shows that women one year out of university make roughly 82 cents for every dollar earned by their male peers even with the same education and qualifications.
Among full-time, year-round workers, the overall gap sits at 83 cents on the dollar. And even after controlling for job title, education, experience, and hours worked, women still earn slightly less about 99 cents on the dollar. That remaining penny may seem small, but it points to something deeper: structural bias.
Gender Pay Gap Myth: “It’s Already Been Fixed”
Reality: Progress is slow and deeply uneven
While the gap has narrowed slightly in recent decades, it’s far from gone. In the U.S., the overall gap in 2024 hovered around 85 cents per dollar. In Canada, it’s around 87 cents. But that average conceals major variations depending on race, age, and parental status.
In Quebec, where subsidized childcare is widely available, the gap is narrower about 91 cents. That’s a sign that policies supporting working parents can have real impact. Still, even in progressive regions, the gender pay gap remains, showing that cultural and organizational practices play a major role in perpetuating the gender pay gap.
Why the Controlled Gender Pay Gap Still Matters
Even when we account for every measurable factor job title, education level, years of experience, hours worked there is still a persistent controlled gender pay gap. On average, it’s about 1%, or one cent on the dollar. While that may sound negligible, it adds up to thousands of dollars over the course of a career. And importantly, it reflects value judgments made by managers and systems not just individual choices.
Gender Pay Gap by Race and Caregiving: A Deeper Divide
Racial disparities
The gender pay gap is even more severe when broken down by race and ethnicity. Among full-time workers in the U.S.:
- Latina women earn about 58 cents for every dollar earned by white, non-Hispanic men
- Black women earn 67 cents
- Indigenous women earn even less
- White women fare better at 85 cents
- Asian women average around 90 cents though disparities still exist within different Asian subgroups
The “motherhood penalty”
Caregiving status is one of the strongest predictors of pay inequality. On average, mothers earn 74 cents for every dollar earned by fathers in full-time roles. Each additional child further reduces a woman’s earning potential. Meanwhile, fathers tend to see a “fatherhood bonus” an increase in pay after having children.
This penalty isn’t just about time off; it’s also about bias. Employers often (consciously or unconsciously) assume mothers are less committed, less available, or less ambitious even when there’s no evidence to support those assumptions. This bias worsens the gender pay gap across nearly every industry.
Fixing the Gender Pay Gap: Practical Steps for Employers
1. Audit your pay structure
Conduct an internal pay equity audit. Look at average compensation by gender, race, and caregiving status both in uncontrolled terms (overall averages) and controlled terms (same roles and experience). Share findings transparently with leadership and commit to addressing the gaps.
2. Introduce pay transparency
List salary ranges in job postings. Share pay bands internally. Train managers to talk about pay openly and consistently. Research shows that transparency alone helps narrow wage gaps and builds trust with employees.
3. Fix biased systems
Standardize how you set salaries, award bonuses, and promote employees. Use structured interviews and calibrated performance reviews. Check that women especially women of color are being considered for stretch roles and leadership tracks at the same rate as their peers. These practices reduce the likelihood of hidden bias in promotion and compensation decisions, and directly address factors that fuel the gender pay gap.
4. Support caregivers
Offer flexible schedules, paid parental leave, and subsidized childcare where possible. Provide “returnship” programs for those re-entering the workforce. These policies help retain talent and level the playing field for working parents. Policies that support working parents are essential for reducing the gender pay gap, particularly for mothers who often face financial penalties for caregiving.
5. Invest in negotiation training
Women are less likely to negotiate starting salaries and more likely to face backlash when they do. Offering training on negotiation, self-advocacy, and advancement strategies can help address that imbalance and improve long-term equity.
6. Set goals and measure progress
Don’t just hope the gap will close. Set clear, time-bound equity goals and revisit them regularly. For example: “Reduce the controlled gender pay gap to zero in two years.” Make leadership accountable for meeting those targets.
And remember, addressing pay equity isn’t just about fairness it’s about retention. As discussed in this article on the risks of scaling back DEI, organizations that fail to act on equity lose trust and talent.
Final Thoughts
The gender pay gap in 2025 isn’t a myth and it’s not just about choice. It reflects deeper systemic issues that continue to hold women back, especially women of color and caregivers.
Addressing the gender pay gap in a consistent and measurable way is no longer optional it’s a leadership imperative. Organizations that prioritize equity are more likely to attract top talent, retain employees, and outperform competitors.
The work begins with facts, not assumptions. With commitment, transparency, and consistent action, employers can move beyond the myths and toward meaningful, measurable progress. Only through deliberate strategy can we finally close the gender pay gap and build a workplace that truly works for everyone.
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