Just about everyone knows women employees earn less than men—about 80 cents for every dollar. That’s one reason many women start a small business or become self-employed. When you set your own fees, you’ll make the same as men, right? Not so fast. Self-employed women still make a lot less than self-employed men. Ladies: it’s time to give yourself a raise.
“The data suggest a massive gender wage gap exists among freelancers, with men out-earning women by 28%,” according to “Women in the Independent Workforce Report,” a recently-released study by FreshBooks, a Toronto-based accounting and invoicing program for self-employed and small businesses.
This earnings gap is equivalent to the cost of two years of child care.
“In 2017, we noticed there was a massive earnings gap between male and female self-employed individuals. Even when we controlled for industry and business size, that gap remained,” said Carly Moulton, FreshBooks’ Data Insights & Communications Manager, who co-authored the study with Dave Cosgrave, Director of Market Insights & Strategies.
“This year we decided to look into that gap more closely,” said Cosgrave, “figuring if we can get even a handful of women to charge what they’re worth, we can close that gap considerably.”
FreshBooks’ findings of self-employed women wage gap:
- 20% — have to charge less than their male equivalents to get and keep clients
- 34% — have experienced gender discrimination while self-employed
- 30% — believe they’re not taken as seriously as their male peers
- 30% — believe they have to work harder than men who do the same work
While some of this gap can be explained by women working fewer hours or being in lower-paid industries, wage differences continue when controlling for those factors.
In data given to me exclusively by FreshBooks, in businesses with over 100 clients—where male and female entrepreneurs are most likely to have similar characteristics—the gender gap still persists in virtually all fields, with women earning 49% less than men in IT (information technology), 34% less in marketing and communication, and 27% less in “creatives,” traditional women’s fields. (The complete data is posted here)
Why do women who can set their own rates make less?
“A lot of folks who go out on their own either lack the confidence or data to know what to charge, and with female entrepreneurs there’s maybe more systemic bias,” said Cosgrave. “Some are raising kids and choosing to work part-time or fewer hours.” But “when you take two businesses that have 100 clients in the same industry and you still see an earnings gap, what’s happening?”
“I’ve gotten some projects or budgets from clients after I’ve done work with them, and I’ve seen some pricing (for other consultants) that’s higher than I currently charge and they’re men,” said Bree Swezey, founder, Authentic Edge Design and Company in Tampa, Florida. “I found out after I invoiced them or quoted them.”
But Swezey isn’t confident that she, as a woman, could charge as much as her male competitors. “I don’t know if they were going with me because I had a lower rate. If I were to raise my price, I’m not sure they would pay the same amount.” Swezey has over 15 years of graphic design experience and a degree in graphic design, but she echoes the 30% of women in the FreshBooks survey who think clients don’t view women the same as their male peers.
“I think it speaks to a little about the seriousness with which we’re taken as women…especially as a mother, it’s seen as a hobby, side-job. You’re not valued as much for your expertise.”
So what can women do to set—and receive—higher rates?
“The folks who were most confident were heavy-duty networkers, belong to industry associations… ask for feedback on how you priced the work,” said Cosgrave.
“Most people find it easier to talk about the value they bring to the client,” said Moulton. “That makes it a lot easier to bring up the topic of pricing.”
Swezey thinks she, and other women, need to change their mindset. “It’s a value and confidence that needs to be built… When I left corporate life, it was more for the work/life balance…but money isn’t always icky.” She’s investing more in her company and is about to launch a new website with design packages. “And I’m setting higher prices.”
Copyright Rhonda Abrams, 2018
This article originally ran in USA Today on August 29, 2018
Table: Median Revenue for Men- vs. Women-run Businesses
