Gen Z isn’t dodging the pitfalls of pay equity issues as they enter the workforce.
Women, it seems, fall behind on compensation even before their first professional job, according to a new report from Handshake, a career app aimed at Gen Z. On average, those surveyed in the class of 2023 reported they consider $82,000 a high, achievable starting salary.
But Gen Z women expect a $6,000 lower average salary compared to men, Handshake’s analysis finds. It shows a clear “expectations gap” for women has formed even before they enter the workplace. The gap was consistent for women across all racial and ethnic groups.
“It's a societal issue, and I think it goes all the way back to K through 12 education,” Christine Cruzvergara, chief education strategy officer at Handshake, tells Fortune.
It also dates back to the gender pay gap days of boomers; in 1980, women's wages represented 64% of men's, per Bureau of Labor Statistics data. While that chasm has narrowed some since then, it stalled in the 2000s around 80%.
The current gender pay gap—women earned $0.82 to every dollar men made in 2022—stems from a broad range of issues. Women, on average, are still hit with a “motherhood penalty” when they have children, losing time out of the workforce and career advancement opportunities. Moreover, women still face barriers in perceptions around the work they’re suited for. Women, for example, only make up 27% of the workforce in the typically higher-paying science, technology, engineering, and math (STEM) industries.
Previous research also shows that women often don’t negotiate their pay as well as men when applying for a job or won’t even go for a job if they feel unqualified.
Both conscious and unconscious biases and perceptions around the value of women’s work continue to drive the pay gap, which has held steady for more than 15 years. Women have a slightly lower expectation around what they might be worth and what they would expect going into particular fields compared to their male counterparts—and that apparently starts early.
“As a society, we still need to consider the ways in which we lift up our female students, or women students, and how we are instilling confidence in them around their own worth, their self-confidence in what they bring to the table—whether that's professionally or academically or quite frankly, in any other realm,” says Cruzvergara, who helped lead career services at Wellesley and George Mason University.
Pay transparency can help close the gender pay gap
To shift this troubling trend, Cruzvergara says current college students need to not only understand that disparities exist, but seek out information on normal pay ranges for specific jobs and industries. Pay transparency regulations, she adds, can actually help with that. Currently, Colorado, California, Rhode Island, and Washington, as well as New York City, all have some type of pay transparency mandates on the books. New York is set to implement statewide requirements in September, while Massachusetts and South Carolina have pending legislation.
The changes that are happening around pay transparency can actually be one of the first very tangible concrete steps in reducing that expectations gap, Cruzvergara says. “As pay transparency becomes a bigger thing for more and more classes in the future, hopefully that gap really narrows because people will now have the data and the information in front of them to be able to adjust their expectations,” she says.
Employers are already reacting. About 27% of organizations are including pay ranges in job listings regardless of the legal requirements, according to Payscale’s 2023 Compensation Best Practices Report. Overall, about 45% of employers include pay ranges in job postings. On Handshake, there are 1.3x as many full-time jobs with salary data on Handshake since 2020.
“This class is honestly one of the first to graduate with more pay transparency than any of us had ever experienced or seen,” Cruzvergara adds, saying they’re the guinea pigs to see how these new regulations change perceptions.
