WASHINGTON — Women working for small businesses were paid lower salaries in 2015 and 2016 than those working for medium-sized businesses, and men worked for larger firms saw larger annual raises than women in those years, according to a new survey.
The Small Business Research Association, based in Salt Lake City, released the report Thursday, and the organization has been tracking gender and wage gaps in small businesses for nearly 10 years. This year it compared this data with information from the Small Business Administration’s database of Federal Acquisition Regulations, which reports pay data from 2015 and 2016.
Federal regulations don’t always reflect the broader data, such as private sector jobs and wages that some small businesses don’t release, but SBERA compiled the data from the government and other sources.
It also found that smaller businesses continue to pay women less than men. The median wages for a female worker at a small business was $32,557, while the median wages for a male worker was $40,958.
Among small businesses that reported data on female managers, the median wages were $23,409 for women and $36,466 for men.
When a company hires an individual into a management role, it can designate a salary based on the hiring criteria. It’s not uncommon for small businesses to choose some workers above others based on what types of skills or abilities they have. Additionally, they often require employees to invest a small amount of time and effort into training other workers and are hesitant to raise pay for workers who haven’t been successfully trained.
Women are usually the ones who do the training because they’re the only ones who have been trained, said Kerry Joplin, president of SBERA. “Typically, women take over a management position for training purposes, and so when the salaries are set, those are the low-paid positions that are set higher,” she said.
That’s not the case with large employers, where women are the ones who are most likely to be part of the training program, Joplin said.
Women working for small businesses have been gaining ground in business ownership but still make less than men, according to a recent Pew Research Center report. Women held 21 percent of small business ownership positions in 2015, up from 17 percent in 2004. That represents 3.6 million women-owned businesses, up from 2.4 million in 2004.
And only 25 percent of women working for small businesses reported higher pay than men.
But the wage gap is closing as businesses become increasingly female-owned, the report says. About half of small businesses with 25 employees or fewer were female-owned in 2015, the report says.
Male-owned small businesses generally were about six times as likely to pay men more than women, the report says.
The pay gap between men and women working for larger firms has narrowed to 5.9 percent, from 9.3 percent between 2006 and 2015, the report says.
Pay gaps haven’t necessarily been the most significant issue facing small businesses, Joplin said.
“I think that it’s really the challenges small businesses face that are more difficult than paying your employees below-market wages,” she said. “So just navigating the regulatory environment, all the accounting tools that you have to track your cash flow, it makes those kinds of challenges very difficult.”
That’s especially true for smaller companies, since government regulations affect many aspects of their business, including the labor department’s overtime requirements, which are simplified as of Sept. 1.
Business owners who have worked at larger firms are often no longer an entrepreneurial force, Joplin said.
“Whereas there are so many men in leadership positions of those larger corporations, they go home to their families and go home to their business,” she said. “Whereas the … continued need for innovation and trying to keep up with the rest of the world makes those fields or in some cases come back into smaller companies.”