Tamara Chuang | Business/Technology Reporter
Two years after the state’s Equal Pay for Equal Work Act went into effect, Colorado women have seen their wages increase faster than their male counterparts.
Could it be the new law? Or is it the aftermath of COVID-19, when a lot of women left full-time jobs and not always by choice. It may be both, according to new analysis.
Typically, the gender pay gap is measured by comparing median weekly wages of men to women workers. Colorado’s pay gap widened in 2020 with women earning 78.1 cents for each $1 men made, the worst imbalance since 2013. It took Colorado women two years to recover and pass pre-pandemic highs. Women’s wages have since increased faster than men’s, narrowing the gap to 87 cents in 2022, according to the Census Bureau’s Current Population Survey.
There’s a lot of possible reasons, said Julie Percival, regional economist for the U.S. Bureau of Labor Statistics. But one that stands out is that in 2020, more women shifted to part-time work and it’s possible that many of the Colorado women were higher earners and could afford to work less. Part-time workers aren’t counted in the survey.
Also, in that first pandemic year, median wages for men increased faster than women, at 17% compared with 5.8% for women. Women’s wages in Colorado have grown faster ever since, which could help explain why the state’s wage gap narrowed faster than other states.
“As a woman, I would love to see perfect parity,” Percival said. “But you’ve got to keep in mind that women and men tend to go into different occupations. That’s what we see in the population at large (and) we do tend to see that women in occupations that they trade off pay for either benefits, flexibility or other things and that men focus on higher incomes.”
But since 2021, the wage transparency law in Colorado has been in effect, equipping all job seekers with the knowledge of how much a job pays. The idea behind the Equal Pay law was that having good salary information helps educate workers about their value and speak up to reduce wage discrimination.
So, did it work?
In an analysis for the Women’s Foundation of Colorado, economist Max Tejera, who used the same Census data, says yes.
But that’s not based on the typical measurement of median wages, which had women’s pay in Colorado going from 86.4 cents for every $1 earned by a man in 2019, dropping to 78.1 cents a year later and then increasing to 87 cents in 2022.
That’s because what people do to earn that median — or middle — weekly wage is very different for men and women. In Colorado, it was $1,142 for women and $1,312 for men. But whether you’re looking at just Colorado or the entire U.S., there will be more women in minimum-wage or traditional lower-paying jobs. In other words, the median man and woman do not do equal work, Tejera said.
“What is the gender wage gap trying to measure? It’s trying to measure economic discrimination against women,” Tejera said. “The issue with using the median is that these people aren’t doing the same work or have the same qualifications, so it’s hard to say if they’re being discriminated against. The measure just doesn’t really account for the skew in distribution.”
Different measurement, similar conclusion
Tejera looked at the same government data more thoughtfully to consider the work being done. He also layered in microdata from IPUMS, a nonprofit housed at the University of Minnesota that takes the Census surveys, cleans them up and makes the individual responses available to researchers.
The goal was to answer this question: Is this law helping reduce wage discrimination?
He needed a before and after to make that comparison.
The “before” became a decade’s worth of data between 2010 and 2020 that took the average earnings of men and women for Colorado and for the U.S. This eliminated the pandemic plunge in pay parity for Colorado women in 2020. He also tossed out minimum-wage earners, a group that has seen wages increase annually due to state law.
He wanted to “avoid accidentally measuring how minimum wage increases disproportionately benefit women because they are more likely to work for minimum wage,” he said.
The “after” was comparable data from January 2021 to January 2024, the three years the Colorado law has been in effect.
In three years, Colorado’s pay parity reduced the gap by 7 cents, to an average of 85 cents from 78 cents. The state showed the greatest increase in three years compared to other states with similar laws. New laws in Washington and California went into effect last year and in the comparable three years, their gap narrowed by 5 cents and 3 cents, respectively. Washington went from 78 cents to 83 cents, while California started higher at 85 cents and is now at 88 cents.
The other 47 states reduced their gap by an average of 2 cents, to 80 cents from 78 cents.
“Since this law came into effect, the reduction in the gender wage gap in Colorado was faster than a comparison group, the 47 states and D.C. that didn’t have a transparency law,” Tejera said.
The law alone can’t eliminate what’s often called the “motherhood penalty.” Taking a break to care for a new baby often happens during a mother’s pivotal work years when there’s a big promotion, which impacts lifetime earnings.
“I don’t think this law can cure everything. I’m not trying to claim that, but I am claiming that it’s made a dent,” he said. “Women choose jobs for different reasons, but if we give them more information, they might choose different jobs. So it’ll cure that part. I think it will also require employers to think more carefully about why they’re paying their workers what they do. And so that’ll make a dent. … I would expect that Colorado, on account of this law, would hit some sort of sweet spot where it’s done all it can do and there will still need to be more done to get to 100 cents on the dollar.”
At least, the number is going up, said Louise Myrland, vice president of programs for The Women’s Foundation of Colorado, which supported the Equal Pay legislation.
“We want to celebrate the progress we’re making,” Myrland said. “But we still have a long way to go to ensure equal pay for equal work for all working women.”
➔ The Women’s Foundation of Colorado report, plus resources for employers and workers.
Unemployment rate in January at 3.4%
While the national unemployment rate remained unchanged at 3.7% in January, Colorado’s increased a smidge to 3.4%, from 3.3% in December.
That’s the highest in almost two years. It still puts Colorado in the middle, tying with Maine and Pennsylvania as 24th lowest rate in the nation, Ryan Gedney, labor economist at the state Department of Labor and Employment, said during a news conference this week.
“That said,” Gedney added in an email, “the state’s unemployment rate is still historically low.”
Since 1976, the state’s unemployment rate has been higher than 3.4% approximately 79% of the time, he said.
Colorado also added 8,000 nonfarm jobs and saw January’s job growth rate increase 2% from a year ago, or above the national rate of 1.9%. Nearly one-third of the new jobs were in the government sector, which also had some of the strongest growth in 2023.
Meanwhile, average hourly earnings, after being adjusted for inflation, grew for the first time since 2020, although by only a tiny amount. While wages increased dramatically in 2022 and 2023, high inflation offset all gains for workers. In January, a worker’s pay grew 3.7% from a year ago and after considering inflation, growth was a scant 0.2%.
The monthly figures were delayed as they typically are this time of year because of annual revisions to the past year’s data. Those updates were shared Monday and, as expected, Colorado gained more jobs than the federal government had previously reported.
This happens all the time because more comprehensive data — such as employers’ own counting of new jobs — takes about six months to show up, Gedney said.
➔ Read the earlier story: Why Colorado had higher unemployment rates but more job growth in 2023 than the Feds reported
Other January job highlights:
➔ Unemployment rates up statewide. At 5.3%, Pueblo posted the highest unemployment rate for the state’s major metro areas. The Pueblo area was at 4.6% in December. Other metro-area not-seasonally adjusted rates, comparing January with December:
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Thanks for sticking with me for this week’s report. Remember to check out The Sun’s daily coverage online. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara
This story was updated on March 16, 2024, to note that the Women’s Foundation of Colorado supported the passage of Colorado’s Equal Pay for Equal Work Act.
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