AAPI women have the smallest pay gap—but that stat 'masks' big economic disparities, say experts

Like all groups of women, Asian American and Pacific Islander (AAPI) women have faced persistent pay gaps in the workplace.

In the U.S. AAPI women working full-time, year-round are typically paid, on average, just $0.85 for every dollar paid to white men, leading to a loss of $833 every month, $10,000 every year and $400,000 over the span of a 40-year career, according to the National Women's Law Center. But while this gap is seemingly smaller than that faced by other racial groups of women, it doesn't explain the full story for all AAPI workers.

CNBC Make It spoke to NWLC's Director of Research Jasmine Tucker and National Asian Pacific American Women's Forum's Executive Director Sung Yeon Choimorrow about why the $0.85 number isn't reflective of the wage gap experienced by many AAPI communities, and the solutions that can change this narrative.

Occupation and pay

The term AAPI, according to the Center for American Progress, refers to people who are part of the Asian American, Native Hawaiian or Pacific Islander population. In total, this includes more than 50 ethnic groups, with an estimated 12.7 million AAPI women living in the United States in 2019.

When looking at this diverse group of women in the workforce, it's important to note that AAPI women are represented in both low-wage and high-wage fields.

"People assume that many of us are working white collar jobs that we can do from home," Choimorrow tells CNBC Make It. "But, there are actually a lot of Asian American women who work in the service sector and in front line jobs."

In fact, an estimated 27% of employed AAPI women are essential workers, according to the Center for American Progress. Of these AAPI women who are essential workers, about 75% work in the health care or food services field.

"Much of the ethnic restaurant industry in the United States is staffed by Asian American women," explains Choimorrow. "And the same goes for the beauty service industry as well when it comes to nails and hair. When you stop and think about it, these are Asian Americans working in jobs where they're not getting paid leave, and they're not able to take paid time off, let alone getting hazard pay of any sort."

In 2019, more than 1.4 million AAPI women were working jobs that had median hourly earnings below $15, according the Center for American Progress. Many of these women, according to data, experience pay gaps that are far greater than AAPI women working in high-wage roles, with bias and discrimination contributing to these disparities.

For instance, high-paying occupations like software developer and physician are the most common jobs for Indian women in the U.S. From 2015 to 2019, the average Indian woman working full-time, year-round had a median annual salary of $70,000. On average, Indian women actually out-earn white men, paid $1.21 for every dollar white men earn, according to the Center for American Progress.

Meanwhile, lower-paying occupations like manicurist and hairdresser are the most common jobs for Vietnamese women. As a result, the average Vietnamese woman had a median annual salary of $36,500 from 2015 to 2019, making just $0.63 for every dollar paid to white men. Burmese women, who have the biggest pay gap of all AAPI women, are paid $0.52 for every dollar paid to white men.

"That $0.85 number is really masking, just like the overall wage gap for women masks all the differences that we see by race," says Tucker. "So even one year, or one more day that these women are not paid the same amount is wrong."

Lack of data and the model minority myth

One of the main reasons why the overall pay gap for AAPI women is reported at $0.85 for every dollar paid to white men is because of the lack of data surrounding many AAPI subgroups.

"The pay gap gets aggregated so high because Chinese Americans, Japanese Americans and Indian Americans are higher in population so they sort of obscure the number for many folks who do not make nearly what some of these other communities are making," says Choimorrow. She emphasizes that the aggregation of this data "reinforces the model minority myth," making it even more challenging for AAPI people, especially those in underserved communities, to get the support and resources needed.

"The model minority myth was something invented by a white sociologist in the '60s literally to pit Asian Americans against Black communities and to say why, in particular Japanese Americans, were superior," she explains. "That [Japanese Americans] were more like white people than Black people and literally drawing these comparisons to then say that the Japanese are the model minority."

This stereotype, Choimorrow adds, "has perpetuated and really hurt our community in a lot of ways." For example, as the executive director of NAPAWF, an organization that focuses on gender and racial justice for AAPI women, Choimorrow says she's faced a lot of hurdles when it comes to getting funding and support for her work.

"Oftentimes people don't think that we qualify or should be considered for funds that go to women and girls of color," she says. "And it's because of this stereotype that we're the model minorities and we don't need the kind of investments that other girls and women of color need."

To fix this issue, Choimorrow says more investments need to be made in collecting ample data on various AAPI subgroups so that they can show up as "statistically significant."

"That's where we fall under," she says. "For a lot of data that's presented many subgroups are either in the 'other' category or we don't show up."

In addition to collecting more data on all AAPI communities, Choimorrow says there needs to be greater awareness around the different types of discrimination AAPI individuals face. While the rise of anti-Asian violence over the past year has led many people to educate themselves on how AAPI women are impacted by racism and sexism, Choimorrow says there is still a lot more work that needs to be done.

"Along with the model minority stereotype, there is this stereotype that Asian women are quiet and docile and that we don't have opinions," she says. "And so what ends up happening is that very few of us actually rise in rank and become managers and leaders of companies."

Though Asian Americans make up 13% of all working professionals today, data shows that they make up just 6% of executive leadership positions. Asian women and Black women, according to research by Denise Peck, an executive advisor at the pan-Asian leadership organization Ascend Foundation, have the smallest shares of executive-level representation in comparison with their representation in lower-level roles.

"So I think there is a lot of unlearning and unpacking assumptions that need to take place," Choimorrow says. Not only to ensure that all AAPI women are paid and promoted fairly, but to ensure they have a "safer and supportive work environment" to thrive in, she adds.

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