The Gender Pay Gap in the Gig Economy

The Gender Pay Gap in the Gig Economy

In recent years, the gig economy has dominated news cycles on both sides of the Atlantic Ocean, as lawmakers have tried to contend with the rise in this technology-driven way of working. There have been several criticisms levied at gig economy working, often around whether workers are receiving adequate rights and protection from the companies using their services. On the other side, arguments in favour of the gig economy tout the considerable freedom it gives its workers - in the gig economy you choose your own hours, are your own boss, and can earn, supposedly, as much as you please.

But is that true?

A recent study of nearly 6,000 US-based freelance gig economy workers by Texas-based company ZenBusiness highlights an entirely different issue. The study found that on average, gig economy workers identifying as male were charging 48% more for their services than their female counterparts - despite 70% of female workers choosing to freelance to avoid the so-called 'glass ceiling', according to a similar older study carried out by accounting software firm FreshBooks.

The FreshBooks study, carried out in 2018 across almost 3,000 people in the US, reported that freelance women earn 28% less than their male counterparts - meaning that the disparity has seemingly only grown over the years, as the gig economy has come to more and more prominence.

On average, male gig economy workers are found to charge 48% more for their services than their female counterparts.

In their study, ZenBusiness also revealed that the average women's hourly rate was over $10 under the average hourly rate overall ($46.30, compared to $57.20). The average hourly men's rate, in contrast, was $68.58 - a $22.28 improvement over their female peers.

This comes as a shock when compared with the overall workplace statistics around the gender pay gap in the US, which has made great strides, but is still a significant problem. The United Stated Census Bureau shows women on average earn 17% less than men nationwide - a gap the World Economic Forum says will take 132 years to close, according to a report from July. Indeed, a report from Payscale shows that the gap has shrunk by just $0.02 since 2015. Payscale state that the "uncontrolled gender pay gap" in 2022 is $0.82 for every $1 men make - the same as it was in 2021. Payscale notes also that this gap widens significantly where race and gender intersect, with women of colour experiencing on average much lower rates than their white counterparts.

For Tech, the discrepancy is worse - the US Bureau of Labor Statistics show that still 79% of all computer programmers are men and this role has one of the highest gender pay gaps across the entirety of the U.S.

The gig economy has been forecast to grow even more over the coming year, into an anticipated $455 billion industry by 2023. Women who, particularly in the wake of the COVID-19 pandemic, are prioritising flexibility and work/life balance over potential wage stability, are increasingly joining gig economy roles. In some industries, they are in fact out-charging men, although in these cases the wage discrepancy is minimal. For instance, in the software development and data science industry, women on average are charging $61.43 to men's $61.21 - a $0.22 increase. In comparison, the biggest discrepancy is found in DevOps engineer roles, with men charging $100.90 hourly in comparison to women's $30.00 hourly - a huge $70 difference. According to LinkedIn, DevOps Engineers are currently the most sought-after talent on the platform

The US Bureau of Labor Statistics show that still 79% of all computer programmers are men and this role has one of the highest gender pay gaps across the entirety of the U.S.

Other roles with particularly noticeable wage gaps include e-commerce website developers (men's $77.95 to women's $48.75) and automation testing (men's $51.64 to women's $26.27). Female copywriters seem to charge slightly more than their male counterparts ($6.29 per hour) - however for business writers, rates are $20.59 where the writer is a man.

Some roles, fortunately, have much more equitable rates. UX/UI roles, in particular, show a $0.03 pay gap in favour of women. This could be driven by the better overall gender representation in the field - the UX Design Institute reports that there is a 50/50 gender split in UX design roles.

So, is the answer simply that the pay gap may lessen as more space is made for women in technology?

Chief Strategy and Marketing Officer for the Adecco Group, Valérie Beaulieu, insists that "prioritizing women for upskilling and reskilling programs" is key. Bob Sternfels, Global Managing Partner of McKinsey & Company agrees. "To create lasting change, representation must also be accompanied by steps to improve inclusion, which could include mentoring and sponsorship programs, parental support and childcare benefits, or anti-racism and proactive allyship training," according to Sternfels.

This problem can be seen just as evidently on the other side of the Atlantic Ocean, in the UK. During the pandemic, the UK government removed the need for corporations to publish gender pay data, representing a huge step backwards in the fight for wage equality. Research shows that women still are not receiving enough encouragement to get into STEMM roles. Research from Stem Graduates shows that only 15% of Engineering graduates are women and women make up only 13% of the UK STEMM workforce.

"All of the research on negotiations shows if women negotiate under the same exact verbal script as a man, a woman is seen as cold and selfish."
Kellie McElhaney, University of California, Berkley

The gig economy offers its own set of issues however - in places where workers in the freelancing industry are expected to set and negotiate rates on their own, it becomes clear that men have the advantage. Kellie McElhaney, director for the Center for Equity, Gender and Leadership at the University of California, Berkley, states, "All of the research on negotiations shows if women negotiate under the same exact verbal script as a man, a woman is seen as cold and selfish." McElhaney found that her male colleagues at the University charge anywhere from 40% - 60% higher for their consulting services than she does, with one professor explaining that he would charge 40% over his calculation for how long he expects a project to take. "There's a fear on my part that they're gonna think I'm absolutely nuts if I give them this price."

Providing support for women in the field - particularly around how to price their own work and negotiate rates, may be invaluable moving forwards. The continued fight, too, to ensure that women in technology are taken more seriously and seen to be deserving of commanding higher rates cannot be overstated. As often is the case, change starts from the top - offering encouragement and support to girls and women at all stages of their careers will go a long way to improving the equality in the workforce and hopefully with it, bring better pay equality and representation in the technology industry.

The Difference Engine is a UK-based, female-led technology recruitment operating in the US, UK and beyond.