Krause: Gender pay gap doesn’t stop for women entrepreneurs

Editor’s note: This post was republished with permission from the Ewing Marion Kauffman Foundation’s Growthology blog.


This week I attended the #HackThePayGap event – an initiative out of the Presidential Innovation Fellows with the White House Council on Women and Girls and Secretary of Commerce Penny Pritzker.

One of the focuses of the event was promoting the use of MIDAAS (Making Income Data Available As a Service) Census data to better inform the conversation around the gender pay gap. Data scientists and software developers were in attendance and presented the power of the data with visualizations and platforms designed to showcase the data. From an app that tells a woman her personal pay gap (based on the data, of course), to a Google Chrome plug-in that shows online shopping prices based on a woman’s pay gap, the event promoted the power of knowledge.

Income Distribution by Gender | Courtesy MIDAAS Commerce Data Service 2016: https://midaas.commerce.gov/topics/gender/

At the event, the conversation gravitated around the understanding that women make 79 cents for every dollar that a man makes, and only 16 percent of women negotiate their salary. The gap is even wider for women of color. “It’s amazing how what you do not know impacts what you settle for,” Secretary Pritzker said in her remarks. The initiative sets out to connect practitioners to data to help close the gender gap.

Most impressive about this initiative is not only the light being shined on this problem, but that there is a focus on engaging smart, young minds to design data products and services in pursuit of solutions. Still, while these products can help aid women in the understanding of their personal pay gap, we must continue to make equal pay not the woman’s responsibility to fix for herself, but for policymakers and employers to fix for society, the economy. The hope is that the data-driven designs that have come from the #HackThePayGap initiative will turn into platforms available for people everywhere to use as tools in closing the gap.

Gender Pay Gap and Women Entrepreneurs

Women start businesses with half the capital of men and use more capital from personal savings and credit card debt. Women receive about 3% of venture capital funding. Women are starting businesses at about half the rate of men, due in part to a financing gap in entrepreneurship. The gender pay gap pervades throughout the business world, creating unnecessary frictions to prosperity.

The gender pay gap is not only an issue for employers and employees to work out. For those interested in starting more and better businesses, the pay gap is a deterrent for entrepreneurs as well (not to mention an issue for our economy as a whole).

With the peak average age for women to start a business between 45 and 54 years old, she is starting a business after multiple decades of wage discrimination affecting her wealth accumulation and overall diminished ability to access capital.

And let us not forget the cognitive biases women place on themselves. Women entrepreneurs pay themselves less than their male counterparts. Systemic views on what it is like to be paid as a woman reach beyond what employers choose to pay her, and into the cognitive views society has placed on women for what she perceives as her full value.

If we want more women able to start better businesses, let’s start with the basics. Pay her what she deserves from day one, and let her have equal opportunities for success as her male peers.


alex_krause250x301Alex Krause is a research assistant in Research and Policy for the Ewing Marion Kauffman Foundation, working on the Kauffman Emerging Scholars program and assisting in the development of the entrepreneurship and education dashboards. She also assists in writing literature reviews, blogs, articles, and information briefs on economy, policy, entrepreneurship, and education. 

She previously worked as the project director of Building a Community of Readers for the Kansas City Public Library. Earlier, she was an AmeriCorps VISTA for the Office of Mayor Sly James and his Turn the Page KC reading initiative and an economics analysis intern for the U.S. State Department in the U.S. Embassy in Berlin.

Krause is a contributor of Kauffman’s entrepreneurship research blog, Growthology.org, which is syndicated by Missouri Business Alert.

Find Krause on Twitter: @AlexKrause


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