Can the Gig Economy Fix the Gender Pay Gap?

More and more workers are heading into the gig economy, and it’s easy to see why. Flexibility in hours, the ability to be your own boss and the idea of setting your own rates are all appealing prospects when laid out next to the 9 to 5 grind. For women, who already have worse outcomes in the traditional workplace, there’s likely an even greater draw (and that’s backed up by the stats—the majority of freelancers are female).
There’s a belief that women in their 20s and 30s leave jobs because they want to start families, but a study found that actually, they leave for the same reasons men do—they aren’t getting the opportunity to grow, and they aren’t being paid enough. It makes sense looking at the statistics: in the U.S., women are paid 80 percent of what men are paid, and when breaking it down by race, it’s even worse. Asian American women fare better than other ethnicities, making 90 percent of what white men make (and raising the overall average), followed by non-Hispanic white women (76 percent), then African-American women (62 percent), Hawaiian and Pacific Islanders (60 percent), Native Americans (58 percent), and Latina women (54 percent).
The numbers are pretty dire, so could leaving the traditional workforce altogether be the answer?
“Because you’re your own boss as a freelancer, you don’t have to worry about being passed up for a promotion because you’re a woman or because you have kids and senior management doesn’t think you are as focused on your career as your male colleague down the hall, for example,” says Jessica Milli, Study Director at the Institute for Women’s Policy Research.

The reasons for the gap

Some of the most commonly discussed factors are education, job title, industry, company and—yep—many women likely leave full-time work and go freelance so they can have more flexibility to care for their families, which costs them when it comes to pay. For most of these factors though, there’s a chicken-or-the-egg question. Are women not getting to the top because they’ve chosen the wrong job title, or are they not getting the job title they want because they’re a woman?
“Part of the reason why freelancing and the gig economy has been so attractive to women is its ability to offer flexible working conditions that allow them to meet their other obligations in their lives,” says Milli. “The freelance economy doesn’t do anything to alter the gender stereotypes of women being the primary caregivers in their household, it just makes it easier for them to do so.”
Aside from these much-discussed factors, it turns out there’s also another reason women are getting paid less. A recent study out of New Zealand’s Ministry for Women found that 80 percent of their gap (which is slightly smaller than the U.S. gap) can’t be explained by any of these factors, which they believe boils down to “behaviors, attitudes and assumptions about women in work.” That includes unconscious bias.
And so far, that seems to be what’s happening in the freelance economy, too. A study from Babson College found that self-employed women earned very slightly less than salaried women—not too bad, except that freelance men, on average, earned about 50 percent more than their salaried counterparts.

An even bigger problem for minorities

It’s clear from the stats that women who aren’t Asian American or white tend to make a lot less money, but there’s something else important at play. A report from the Pew Research Center explains that gig workers are disproportionately Black and Hispanic, and that gig workers are also disproportionately living in poverty when compared to employed workers. And it’s not just non-white women who deal with this. Transgender women also face discrimination in the workforce. (A study found that nearly 50 percent of transgender and gender non-conforming people had some negative experience such as being fired or skipped over for a promotion because of their gender identity.) With all the freedoms of freelance work also come the evaporation of legal workplace protections, meaning it’s easier for clients to take advantage of workers, or to exploit loopholes.
For Cameron Glover, a black freelance writer, she’s actually found that knowing she doesn’t have the privilege of some others in her field means she’s forced to ignore “imposter’s syndrome” and push her work out to editors.
“I still get it from time to time but I still send out stories and negotiate because as a marginalized person, I don’t have the same securities of privilege to fall back on,” she says.

The negotiation game

One of the biggest challenges for women, generally, is negotiating salaries. For most workers, negotiations and salary reviews aren’t the most fun way to spend an afternoon. But for women, they’re a lot tougher and a lot less successful than they are for men. A study by Glassdoor found that not only do women negotiate less frequently than their male counterparts, they also have one third the success rate in getting higher pay.
For freelancers, this is bad news, since work is project- or contract-based, and each one comes with a new round of negotiations.
Rebecca Bodenheimer, a freelance writer, editor and academic scholar says negotiation feels uncomfortable to her, and she has regularly realized she was undercharging for her services, which is part of the reason she doesn’t see the freelance economy evening out the gap.
“We have to negotiate everything, which is proven to backfire for many women, and is just hard for many of us to do because of the way we are socialized not to ask for too much,” she says.
Freelancer Elizabeth Limbach agrees.
“One of the most important parts of running your freelance business is also the hardest: setting your rates and asking for the pay you really want and deserve,” she says.
While the freelance economy might provide a good alternative to a traditional job in a lot of cases, it doesn’t seem to be the panacea we’re looking for when it comes to fixing the pay gap. From the expectation that women will be primary caretakers to the disadvantage they are at in negotiating higher pay, the same issues that tend to affect women in the traditional workforce affect women in freelance.
“Even within the gig economy there are issues that women have to contend with. Implicit bias against women may mean that women get fewer contracts than men, or are offered less money—both of which would contribute to the gender wage gap,” says Milli.
What are your thoughts? Drop your questions/comments below!