Gender wage gap in Boston decreases while racial gap widens

New research shows that the gender wage gap in Greater Boston decreased by 30% over the last two years. Women now earn 79 cents for every dollar a man earns, nine cents more than they did in 2021, according to data from the Boston Women’s Workforce Council (BWWC).

But the group’s annual report also found that the racial/ethnic wage gap increased over the last two years. People of color earn 73 cents for every dollar earned by their white colleagues, compared to 76 cents for every dollar in 2021. 

The BWWC attributes the strides in shrinking the gender wage gap to two factors: women’s advancement into highly-paid senior positions and overall salary increases. The number of women in executive positions rose by 3%, and the number of women in mid-level positions rose by 2%. Overall, the average woman’s salary increased by 6% between 2021 and 2023. 

The gender wage gap did grow notably in positions associated with performance pay. More women in higher-paying roles reduced the wage gap, but a lack of equity in performance pay helped maintain it, the BWWC noted in the report. The gender wage gap grew to 30 cents when performance pay was analyzed. Men, on average, earned more than triple the amount of performance pay as women. 

Analysts noted that the pandemic likely played a role in these findings. A large decrease in the gender wage gap is likely “tied to pandemic-driven labor adjustments and the way money was used to keep workers in the workforce,” the BWWC notes in the report. Federal support payments enabled many women to remain working and allowed others to take new jobs.

The BWWC recruits companies to sign the “100% Talent Compact,” a pledge that involves them examining policies, fixing wage inequities that are found, and anonymously sharing payroll data on race and gender. The BWWC received data on about 165,000 employees in 2023, or roughly 17% of the workforce in Greater Boston. 

“We are energized by the significant closing of the gender wage gap this past year,” Executive Director of the BWWC Kim Borman said in a statement. “We have been working diligently over the past 10 years with the city and employers to make this change happen, and we see the efforts of our Compact Signers paying off in these results.” 

The BWWC began collecting and analyzing data like this in 2016. This year’s report marks the first time there has been a reduction in the gender wage gap.

“This result helps demonstrate that this work really moves the needle,” Borman said. “We need employers to continue their efforts to address the power gap by advancing women into positions of power, and therefore higher pay, at the same rate as men.” 

Analyzing performance pay also showed greater inequities in the racial/ethnic wage gap. That gap widened to 31 cents when performance pay was included, as employees of color earned an average of 2.5 times less in performance pay than white workers. 

Women of color are overrepresented in lower-paying industries and positions, according to the report. Among the female employees whose data was analyzed, Asian and white women were the highest earners. In relation to white women, Hispanic/Latina and Black women earned 40% and 42% less in base compensation, respectively. 

Black women earned 54 cents less per dollar than white men, while Hispanic/Latina women earned 52 cents less. 

“The increase in the racial wage gap means we still have more work to do,” Borman said. “Closer to equity isn’t enough.”

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