The income gender gap just got worse for women for the first time in 20 years

Income for women in the United States working full time and year round grew only half as fast for that as men in 2023, the Census Bureau said this week, resulting in the first decrease in the female-to-male earnings ratio in 20 years.

Real median earnings for men who worked full-time, year-round increased by 3% last year and real median earnings increased 1.5% for women who worked full-time, year-round, results of the Census report Income in the United States: 2023 found.

That pushed the female-to-male earnings ratio down to 82.7% from 84% in 2022. The Census Bureau said that is is the first statistically significant annual decrease in the female-to-male earnings ratio since 2003.

The wage gap doesn’t mean women earn less than men for the same types of jobs — though that does happen, Emily Peck wrote in the Axios Markets newsletter Wednesday. Instead, it is a useful indicator of broad inequality between men and women in the labor market.

“Women make up the majority of low-wage workers in the U.S., partly because many are trying to figure out how to earn money while also caring for children. Jobs that can accommodate those schedules tend to pay less,” Peck wrote.

Some other reasons for the discrepancy:

• The best-paying “greedy” jobs, as Nobel winner Claudia Goldin calls them, are dominated by men.
• Plus, jobs typically done by women often pay less than those done by a guy. For example, housekeepers typically don’t make us much as janitors.
• Women are also far more likely to take time out from the workforce because of child care needs, leading to career setbacks that wind up costing money.

The Census report said overall income equality in the U.S. did not change significantly in 2023 as real median household income increased by 4% between 2022 and 2023. That was the first statistically significant annual increase in real median household income since 2019. Real median household income was $80,610 in 2023, up from the 2022 estimate of $77,540.

Real median household income increased by 5.4% for white households and by 5.7% for non-Hispanic white households between 2022 and 2023. There was no significant change in median incomes for Black, Asian and Hispanic households.

Household income rose throughout the income distribution, increasing 6.7% at the 10th percentile and 4.6% at the 90th percentile. Income estimates are based on the concept of money income and do not account for the value of in-kind transfers. They are pretax.

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