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Gender pay gap doesn’t stop for women entrepreneurs

Two women stand in front of a small stack of coins. Behind them, two men stand in front of a coin stack double in size.

The White House and the tech community team up to #HackThePayGap for women. Kauffman Foundation sees that the pay gap reaches beyond employer-employee relationship, and into entrepreneurship.

Written by Alex Krause

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/

Open Data Sets

If you’re not familiar, the current government administration has also made a commitment to creating more open data sets. To quote a recent press release: “Open data from the U.S. Government is an important national resource, serving as fuel for innovation and scientific discovery. It is central to a more efficient, transparent, and collaborative democracy.” This is a priority for the Kauffman Foundation as well through our work with Census, the Kauffman Firm Survey, and the Kauffman Index on Entrepreneurship Series.

For more information check out MIDAAS, and Project Open Data.

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. 

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