The Paycheck Plateau

Why do women stop getting raises in the middle of their careers?

Woman working on laptop, smiling.
So what can you do if you want to attempt to fight the gender pay gap and plateau?

Photo by Ezra Bailey/Getty Images

Psst. Ladies, are you 40? If so, take a good look at your paycheck. I hope you like your salary. It might just be the same one you receive for the remainder of your career.

That factoid is courtesy of the most recent data dump from pay and compensation website, which recently determined that the median woman’s earnings increase at a steady pace till she turns 40. Then they plateau. 

Men? Funny you should ask. They get raises for another decade or so, hitting a pay bottleneck at 50.

How you view this sort of thing depends on whether you see the glass half-full or half-empty. Optimists would cite this as progress. When PayScale took a look at the situation in 2011, women’s paychecks stopped progressing when they were 37. So we gained three years. Yay! A pessimist might note that the 2011 figures showed men’s earnings plateauing when they reached 45. So we gained three years and they gained … five.

No wonder we never seem to get anywhere.  But I digress.

The salary plateau was part of an overall report by PayScale on the gender gap, which it found was a little less than 3 percent after adjusting for everything from position to where one lives. There were nods in the report to the incontrovertible fact that “the pay gap widens” as women reach the executive ranks, with the report noting bleakly, “Not only are there fewer female executives, they are more likely to work at smaller companies and in non-senior executive leadership roles. Even at this level, the glass ceiling looms.” Yet the company still put part of the blame for the situation on women. “The gender pay gap is a complicated issue that can’t be solved by one corporate initiative or piece of legislation,” says the report. “So it’s time to take action into your own hands.”

Yet how to do that is more complicated than PayScale suggests. Its report is chipper, offering a can-do, practical attitude, but doesn’t fully get to the heart of the problem.

PayScale first suggests educating girls to understand “the importance of career choice.” In other words, skip the caring professions and head over to tech. Probably not bad advice. That’s a chunk of the plateau: MarketWatch, in a write-up about the study, pointed out that many jobs that attract women—like teaching and nursing— frequently don’t work like traditional corporate jobs and, as a result, don’t need to offer “the string of promotions and pay premiums that firms typically use to keep their best performers around.” But it’s not like that’s going to solve the gender gap. Tech experiences it, too.

Moreover, one way career consultants suggest getting a salary boost is to seek out a competing offer. This is such common advice, you can find reams of it online. There’s  “How to Turn a Job Offer Into a Raise” and “How to Leverage a Job Offer to Get a Raise” and, perhaps most hilariously,  “Should You Use a Counter Offer to Land a Raise” by women’s financial website LearnVest, which used someone named Timothy to lead off the story. You know, a guy.

I mention that fact because a few years back women’s advocacy organization Catalyst discovered that men were rewarded for job-hopping with salary increases. Women? Not so much. Changing jobs two times actually resulted in significantly fewer earnings than women who remained with the same employer. The report’s authors speculated that this had something to do with the fact that women report needing to prove and promote themselves in the workplace over and over again. Men were simply assumed to be competent unless they demonstrated otherwise.

To be fair, Payscale concludes the report by calling on employers to more conscious of diversity in hiring and promoting. But women are given significant and specific advice, several tips  each and every one of us can take to combat what is a pervasive social and economic issue. Among them: negotiate pay. Unfortunately, they don’t mention the rather plentiful research that shows that this is a risky maneuver, one that requires women to calibrate their request so they aren’t seen as too aggressive and to remind everyone that they are team player. The authors’ similar advice to “speak your mind” is as likely to get you called bossy, pushy, or abrasive, as Bryce Covert recently noted in a roundup about recent research (though not PayScale’s report) in the Nation.

So what can you do if you want to attempt to fight the gender pay gap and plateau?

Well, something PayScale might have mentioned was applying for a job with cloud computing company, where CEO Marc Benioff recently revealed the company is spending $3 million to make sure the salaries of men and women doing similar jobs are equitable.

You could also keep an eye on Ellen Pao, the now former CEO of Reddit. While heading up the popular online platform, she banned salary negotiations, in the hopes of equalizing pay between men and women doing the same job. Recruits were presented with an offer based on prevailing rates for their position. True, that can’t fix the issue of lower paying vs. higher paying fields, but it’s a good start at a piece of the problem. Let’s hope she’ll do the same at the next company she lands at.

Finally, you can try to find allies. As Bradley Cooper pointed out last month, he can help by sharing his salary info with female co-stars. As he said, it’s time to start talking about “financial stuff.”