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70 cents on the dollar: The small business gender pay gap
Employers Reports

70 cents on the dollar: The small business gender pay gap

Qian Liu, PhD

It’s no secret that gender inequity in compensation is plaguing every corner of the economy. As we were all reminded on Equal Pay Day last month, things don’t seem to be improving. According to the Institute for Women’s Policy Research, in 2017 the gender wage gap widened between women of all racial and ethnic groups and white men. While there are different statistics floating around, overall women earn around 83% of what men earn.

If you’re reading this, you probably know that at Guideline, we’re all about supporting small businesses. All this recent high level data got us thinking about what the pay gap looks like at small businesses, or those that employ between 0-100 people.

With more than 5.8 million small businesses in this country, employing 42 million people, it’s certainly a cohort worth looking into. More than 7,000 small businesses—that collectively employ tens of thousands of people—offer their employees a Guideline 401(k), which gives us a unique vantage point on small business compensation.

Small Business Gender Pay Gap

So in honor of Small Business Week, after looking at the anonymized compensation data of Guideline participants, today we’re exposing what the gender pay gap looks like at small businesses.

Women make 70c for every dollar earned by a man

Our data indicates that the gap is even worse at small businesses than it is overall. Women who work at a small business make 70 cents on every dollar earned by a man.

Gender pay gap by generation

After we had a high level view, we decided to see how age impacts the gap. In the image above, you’ll see a breakdown of the pay gap by generation. Interestingly, the older a woman is who works at a small business, the more the disparity in her equity grows. It’s positive to see that younger generations are experiencing less of a gap and hopefully it indicates a potential future of pay parity.

Single women make 80c for every dollar a man makes

Gender Pay Gap and Marital Status

We then decided to look at whether the pay gap changes based on marital status. It turns out, it does—single women earn 80 cents on the dollar, while married women earn 60 cents on the dollar. Why do married women earn even less? It’s hard to say with the data we have to work with, but it’s disappointing to see that when a woman ages and/or decides to get married, she is put at an even bigger economic disadvantage.

It unfortunately shouldn’t be surprising that the gender pay gap among small businesses is so significant, but that doesn’t make it easy to read in plain text. The good news is there’s things you can do to help.

There’s a lot of content available on this topic, but our friends at ELLEVEST put together some great, tactical ideas for helping realize change. Actions like mentoring/sponsoring a young woman in your field, hiring (and promoting!) women for leadership positions, and supporting women-owned businesses can go a long way.

This is a topic that we are going to continue to watch closely and plan to release new and related insights over the coming months. The easiest thing we can do to drive change is to start by acknowledging and promoting the ubiquitous data that illustrates how unequal the world still is and use that to fuel action with passion.    


We analyzed anonymized compensation data of tens of thousands of non-owner employees who have worked at small businesses and participated in Guideline 401(k) plans. Gender is inferred by participants’ first names based on Popular Baby Names dataset from Social Security. Gender pay gap is defined as female median compensation divided by male median compensation.  

We based age generations on data provided by Pew Research. Pew defines Baby Boomers as those born between 1946 and 1964, GenX as those born between 1965 and 1980, Millennials as those born between 1981 and 1996, and GenZ as those born after 1997. We divided Millennials into two groups - those born between 1981 and 1988 as older Millennials and those born between 1989 and 1996 as younger Millennials.