There’s a growing difference between the minimum salary a man will accept for a job and the minimum salary a woman will accept, according to new survey data from the Federal Reserve Bank of New York.
Released this week, the poll tracks what economists call the “reservation wage” — the lowest paycheck a person is willing to accept for a new job. Overall, the New York Fed found the average reservation wage of the American worker has climbed to $72,873, up from $68,954 a year ago.
It’s no wonder: Rising prices for groceries, gas and other essentials have made life significantly more expensive, and in many ways, the labor market has tilted in favor of workers amid the Great Resignation. But while the difference in the reservation wage between men and women is nothing new, the data shows that the gap is widening.
The reservation wage for men rose to $86,259 in July, a record high, from $83,306 in March. Meanwhile, the reservation wage for women declined to $59,543 from $61,676 in that same period.
That means the lowest salary a man thinks is acceptable at a new job is about 37% higher than the lowest wage a woman does. In November 2019, before the pandemic, the difference was 31%.
Although women's wages have always lagged behind men's — women today earn about 82 cents for every dollar earned by a man — it’s difficult to pinpoint the exact reason for the change from 2019 to 2022. It could be partially linked to the fact that women were hit harder by pandemic layoffs, and millions of women left the workforce entirely to take on care responsibilities at home. They are returning to work, but a May analysis by the nonprofit Pew Charitable Trusts found mothers of small children were re-entering the workforce at slower rates than fathers of small children.
It's not all about gender — age influences salary expectations, too. Younger workers have also seen outsized gains when it comes to their pay floors. The reservation wage for people 45 or younger is now $76,971, up from $62,273 at the beginning of the pandemic.
The New York Fed survey contained responses from about 1,300 people contacted on a monthly basis.
If the numbers seem high, remember: Just because these minimum desired salaries are what employees want, it doesn't mean that's what they're actually earning. American workers aged 16 and older earned a median of $1,041 per week in the second quarter of 2022, according to the Bureau of Labor Statistics. That's roughly $54,000 per year.