Women in the Workforce Show Increasing Gains in Wage Growth

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For the past six quarters, women have improved their standing in the workforce relative to men, according to the ADP Q3 2016 Workforce Vitality Report (WVR). The Workforce Vitality Index (WVI), a composite reading of several workforce indicators in the report, illustrates this trend and depicts how women are increasing their numbers and wage growth in the labor market.

Year-over-year employment growth is a key factor in the WVI, and a measure where women have consistently outpaced men. In Q1 2015, employment growth for men was 2.3 percent compared to 2.6 percent for women. In Q3 2016, women grew employment by 3.0 percent, a consistent level over the past four quarters, compared to 0.9 percent for men. Women continue to enter the workforce at a steady pace while employment growth for men is slowing.

Is the Gender Wage Gap Tightening?

According to the National Equal Pay Task Force, broad gains have been made over the past few decades in reducing the gender wage gap. Women are starting to earn more, but they are not doing so as quickly or significantly to even wage totals in the near term. The Institute for Women's Policy Research says the gap persists in nearly every occupation, and the World Economic Forum expects the current wage growth patterns to close the gender gap in 170 years.

Are Women Moving Into More Lucrative Industries?

However, there are some areas where women are particularly apt to grow their wages quickly. The Bureau of Labor Statistics (BLS) shows that the pay gap is smaller in industries like construction and extraction, office and administration support, food service, social service and maintenance and repair. It's possible the better wage performance of women is because more women are moving into these sectors, and also possible that the structural economic changes affecting manufacturing and resources/mining are having an outsize effect on male employment, since they tend to be particularly male-dominated industries. Although this looks to increase women's comparative standing in the labor market, the relatively small annual changes in the share of women workers has not yet accounted for significant wage gap declines.

Wage Growth in Female-Dominated Industries

While there are declining wages and job growth in those male-dominated industries, many of the predominantly female industries are seeing wage growth. Data from the BLS shows that women hold 74.6 percent of all jobs in education and health services, and WVR has shown strong wage growth in these industries. They make up a substantial portion of the overall workforce, so industry-specific wage growth has become clear in WVR.

Better Wages Don't Close the Gap

The main takeaway is that although women are starting to improve their wage prospects, improvements come slowly and predominantly in industries with a high concentration of women. The wage gap hasn't closed, however, and there is still room for improvement.

To learn more about employment growth trends, download the ADP Research Institute® report: Workforce Vitality Report