1. What is the Wage Gap?

The wage gap measures the difference in earnings between two groups, typically expressed as a percentage of the higher-earning group's wages. It's commonly used to analyze gender or racial pay disparities.

2. How Does the Calculator Work?

The calculator uses the wage gap equation:

Where:

• \( group1\_avg \) — Average wage of the first (typically higher-earning) group
• \( group2\_avg \) — Average wage of the second group
• \( gap \) — Percentage difference between the groups

Explanation: The equation calculates what percentage less the second group earns compared to the first group.

3. Importance of Wage Gap Calculation

Details: Calculating wage gaps helps identify pay disparities, inform policy decisions, and track progress toward pay equity. It's used by researchers, HR professionals, and policymakers.

4. Using the Calculator

Tips: Enter average wages for both groups in dollars. Group 1 should typically be the higher-earning group you're comparing against. The result shows what percentage less Group 2 earns compared to Group 1.

5. Frequently Asked Questions (FAQ)

Q1: What does a positive gap percentage mean?
A: A positive percentage means Group 2 earns less than Group 1. For example, a 20% gap means Group 2 earns 20% less than Group 1.

Q2: Can the gap be negative?
A: Yes, if Group 2's average wage is higher than Group 1's, the gap will be negative, indicating Group 1 earns less than Group 2.

Q3: What time period should wages cover?
A: Typically annual salaries or hourly wages are compared. Ensure both groups cover the same time period (e.g., both annual or both hourly).

Q4: Does this account for different jobs or experience levels?
A: No, this calculates the raw (unadjusted) wage gap. For more nuanced analysis, additional statistical controls would be needed.

Q5: How is this different from pay ratio?
A: Pay ratio compares specific percentiles (e.g., CEO to median worker), while wage gap compares average earnings between groups.