Women, Education and Earning Power

Here's something you may not have heard before:
Women are experiencing a pay increase. According to recent data from the Bureau of Labor Statistics (BLS), from 1979 to 2004, women's earnings--as a percentage of men's--rose from 62 percent to 80 percent. What can women do to make up this inconsistency in pay?

Some say the solution is simple: Get educated, learn new skills, impress the boss, and you're sure to add a few digits to your salary. When it comes to education, women are, in fact, the stronger sex. According to 2004-2005 school year data from the National Center for Education Statistics (NCES), women outnumbered men in terms of earning associate, bachelor's, and master's degrees.

The return on that education investment is high. Women who graduated from four-year colleges earned about 76 percent more than women with only a high school diploma, according to the most recent data released by the BLS. So if education is one step toward equalizing the gender/earning disparity, where should women start if they want to get ahead?

Finding your focus"The first thing you have to do is figure out what your values are, and understand that the ways to higher pay are about trade-offs," says Warren Farrell, Ph.D., the San Diego-based author of Why Men Earn More: The Startling Truth Behind the Pay Gap and What Women Can Do About It. "The road to higher pay is a toll road. The discovery is finding out which tolls are worth it and which aren't."
When it comes to using education to increase earning power, Farrell says it's all about choosing the right subspecialty--a niche market within an in-demand profession. As an example, Farrell points to visiting nurses, such as those who work for hospices. Even though the nursing profession is in high demand, nurses who are willing to travel can earn twice as much as traditional nurses.
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Farrell says the field, rather than the degree, is often a better predictor of higher pay. Take recent data from the NCES, for example, which shows that in 2000, graduates with bachelor's degrees in engineering earned the most (close to $50,000) one year after graduation, while those with education degrees earned the least (less than $30,000) one year after graduation.

"A scientist is going to make a lot more than a language major," he says. "More important is that the choice of field not only predicts pay, but also the probability of getting a job in that field at all."
Caring for your careerThat sort of practical education planning buoyed Teri Fagan's paycheck. Fagan was working in accounting making $8.60 an hour when she and her family fell on hard times. A friend encouraged her to go to nursing school, but Fagan struggled on her own for four years before realizing additional education could improve her financial situation. The years she spent in school earning her associate degree were "scary," she admits, because "I was in the program full time, and the last year I was there, I only grossed $5,000."

The notion of having a better salary that would afford her a better life pushed Fagan through the program. And 2004 statistics from the U.S. Census Bureau back up Fagan's goal: Women who hold at least an associate degree earn $9,032 more than women who don't pursue higher education.
"They asked us in class why we wanted to be nurses, and many people said they wanted to give and be compassionate. I'm afraid I was all about money," Fagan says. "But, I was intrigued by the thought of nursing. It's intellectually stimulating, and it has a lot to do with accounting in terms of math and judgment."
After earning her degree, she landed a job at Mission Hospital in Asheville, N.C., one of the top 100 hospitals in the nation. Since then, her salary has increased threefold.

Maintaining versatilityFrances Altman had a good job and an even better salary, but she returned to her alma mater, Roosevelt University in Chicago, to earn her master's degree in communications because she felt it would help her keep pace with her peers in public relations. Altman isn't the only woman to have felt this way--in 2003 more than 500,000 women aimed to increase their paychecks by enrolling in graduate programs, according to the most recent data from the NCES.

"I was running into more and more people who had [postgraduate] degrees," Altman says. "It became apparent that the additional consolidation of my education would be beneficial."
Though Altman had been employed with her company for 19 years, she was downsized. She earned her graduate degree, and eventually landed her current position as a public relations specialist for Virginia Commonwealth University's School of Business.

It was her degree, says Altman, that helped her maintain versatility in a continuously fluctuating job market. "You have to be watching for opportunities to reinvent yourself all the time," she says. "Maybe it seems public relations doesn't exactly fit in one area, and yet I began working in PR in education. I'm using all the same techniques, but now I'm working with alumni and teachers."
Knowledge is business powerIf Erika Mangrum hadn't pursued an M.B.A., she may never have opened her own business.

Like Altman, Mangrum went back to school because she felt she needed to keep up with her colleagues. Although she had no intention of leaving her corporate job, her mock business plan, created for a school assignment, got her thinking.
Mangrum worked with one of her marketing professors for two years to create a business plan for a spa. As a result, she opened the first location of her Iatria Spa and Health Center in Raleigh, N.C. Seven years later, she opened three additional locations throughout the state.
Mangrum admits that she could have never been able to accomplish that at the large organization where she worked prior to her return to school.
"[After receiving my M.B.A.,] I had more self-confidence because I had a more well-rounded set of skills. I had a better network," she says.

There's no question that education directly increased Mangrum's earning power and professional freedom. In fact, she hopes to spread the wealth of her knowledge through an online marketing course at the University of California at Irvine that she began teaching in April 2006. "This enables me to give back, and that makes me happy," she says. "I'm more rewarded doing what I do now, because I can effect change better."
Closing the pay gapGetting an advanced degree doesn't mean the boss will automatically respond with a raise. But the combination of education and experience can translate into better opportunities for women--and better chances of closing the earning gap between men and women. Of today's workforce, nearly 33 percent of women ages 25 to 64 had academic experience under their belt in 2004, compared to 11 percent in 1970, according to the BLS.

"The career has something to do with it, there's no question that's part of the deal," says Marsha Firestone, president of the Women Presidents' Organization in New York, a nonprofit membership organization of 1,000 successful female entrepreneurs who own and run multimillion-dollar businesses. "But education is key for opening doors."