Women’s wages are now growing faster than men’s, says Bank of America data

The future may be female, but in economic terms, the present is as well. The gender gap—which references how much more the average man in the United States earns compared to the average woman—has eroded in recent years, largely because women are earning more money, according to new data from the Bank of America Institute.

In a report published this month, the data shows that women’s median discretionary spending increased 0.9% year-over-year during November, and that it’s been growing faster than men’s spending over the previous two-year period. Additionally, and perhaps most importantly, female workers’ median annual income growth is growing faster than male workers, in large part due to bigger pay jumps when changing jobs.

While the past few years have seen wages grow overall in the wake of the pandemic, the important point unearthed in the data is that women are seeing bigger pay increases, and in aggregate, it’s “evidence of a narrowing gender pay gap,” says Taylor Bowley, an economist at Bank of America Institute and author of the publication.

While the gender pay gap can vary by a few percentage points depending on the specific data used to calculate it, the most recent numbers from the Department of Labor, published last year, show that the average full-time working woman earns 84% of what men are paid. But again, Bank of America Institute’s numbers show that number creeping up.

Not only that, but with women earning more money, and spending more of it, they’ve been something of an economic engine in recent years, too. “Women are helping drive growth,” says Bowley. “Even pre-pandemic discretionary spending for women was up compared to men’s,” she says. “There’s increased potential for women to continue to be key players in the economy’s strength. The data is highly encouraging.”

What forces drive women to earn more, fuel the economy, and erode the gender pay gap? There are a lot of variables in the mix, Bowley says, but a good place to start looking is at education numbers. “Public data shows that women’s enrollment in four-year degree programs has been outpacing men’s for a while. More education translates into more opportunities. That also helps drive women’s labor force participation rates,” she says.

In all, women are more educated, earning more money, and becoming an increasingly important pillar of economic growth. That, if anything, Bowley says, is the key takeaway from the data: “Women are a key source of strength for the economy, and it’s increasingly important.”