Is the gender pay gap real?
April 9 is Equal Pay Day, and we're supposed to recognize how women are discriminated against in the workplace. Let's start by getting the facts straight.
This post comes from Stacy Johnson at partner site Money Talks News.
Tuesday, April 9, has been labeled "Equal Pay Day." It's to draw attention to the fact that men are paid more than women -- a fact recognized by everyone from President Obama to "Lean In" author Sheryl Sandberg.
But is it real?
The typical American woman who works full time, year round is paid only 77 cents for every dollar paid to her male counterpart. This gap in earnings translates into $11,084 less per year in median earnings, leaving women and their families shortchanged.
Now, what is this paragraph telling you?
A. A woman, identical in every job-related respect other than sex, is paid less than a man to do the same job.
B. Women, on average, take home less money than men.
The implications of these answers are radically different. If it's A, you could be looking at illegal discrimination. But if it's B, it's inconclusive. If men average more take-home pay than women, there could be lots of reasons. It could be illegal discrimination. But if male-dominated jobs (construction) pay more than female-dominated jobs (teaching), it's possible nothing's amiss. Likewise if the average male has more seniority than the average female, or a higher level of education.
In short, the lone fact that someone makes more than you doesn't mean a thing until you know why.
So, which answer did you pick?
You could certainly be forgiven for picking A. In fact, the way the statement is worded, you're pushed in that direction. It says, "… is paid only 77 cents for every dollar paid to her male counterpart," implying a male in the same job.
The correct answer, however, is B. The "77 cents to a man's dollar" argument is based on the average earnings of all women versus the average earnings of all men without regard for what they're doing for a living, how long they've been doing it, or any other factor that influences earnings. It's ridiculous.
If we're going to address wage discrimination, shouldn't we do it honestly?
I wrote about this two years ago in a post called "Women make only 75% of what men make -- fact or fiction?" and others have as well. But this distortion of the facts seems unwilling to die.
Here's how a recent article begins on Huff Post Women called "Don't just get mad about the gender pay gap, do something on Equal Pay Day!"
Another year has passed, and yet the pay gap remains stubbornly in place. Today, it stands at 23 cents, meaning that women, on average, are paid 77% of what men are paid -- an average that's even lower for black and Hispanic/Latina women.
Myth combated: From a recent article on Time's website:
Let's first dispense with the fallacy that the pay-gap ratios so often cited are for women and men doing the same job. They are not. If they were, then a female marketing account manager making $77,000, while her male colleague with the same title and work experience makes $100,000, would have a very good case to sue her employers under the Equal Pay Act of 1963, which protects men and women from sex discrimination in pay rates. The pay-gap ratios don't even refer to men and women in the same occupation.
Is the gender gap real?
Perhaps you think that, because I'm a male, I'm claiming wage discrimination doesn't exist. Not at all -- I suspect it does.
But there's a problem with using fuzzy math to draw attention to gender inequality. Namely, it allows those so inclined to dismiss what could be a legitimate complaint.
Credible evidence regarding wage discrimination does exist. For example, the author of the Huff Post article references a study that provides evidence of sexual bias among university science faculty. From the abstract:
In a randomized double-blind study (n = 127), science faculty from research-intensive universities rated the application materials of a student -- who was randomly assigned either a male or female name -- for a laboratory manager position. Faculty participants rated the male applicant as significantly more competent and hireable than the (identical) female applicant. These participants also selected a higher starting salary and offered more career mentoring to the male applicant.
Findings like these warrant discussion. But comparing apples to oranges serves to obfuscate, rather than illuminate, the problem.
If you're interested in understanding the gender gap, start with the Wikipedia page called "Male-female income disparity in the United States." It points to lots of studies, but don't expect a cut and dried, definitive answer because many studies conflict with one another.
For example, the Wikipedia page cites a 2003 study from the Government Accountability Office:
The researchers controlled for "work patterns," including years of work experience, education, and hours of work per year, as well as differences in industry, occupation, race, marital status, and job tenure. With controls for these variables in place, the data showed that women earned, on average, 20% less than men during the entire period 1983 to 2000.
A couple of paragraphs later:
Economist June O'Neill, former director of the Congressional Budget Office, found an unexplained pay gap of 8% after controlling for experience, education, and number of years on the job. Furthermore, O'Neill found that among young people who have never had a child, women's earnings approach 98% of men's.
The bottom line
Today you're going to see a lot of headlines and hear a lot of reporters claim women earn 77 cents for every dollar men make. While that might make for a great sound bite, the math is fuzzy and the comparison is silly.
If you're seriously interested in the problem, ignore the hype and dig a little deeper. Arm yourself with the facts. Then, if you don't like what you see, do something about it.
Whether it's based on race, religion or sex, discrimination has no place in America. But neither does faulty logic and bad journalism.
So, what do you think? Is the gender gap real? Have you encountered it?
More from Money Talks News and MSN Money:
I think a huge cause of the whole 77 cents to the dollar fuzzy math is that women (like myself) are often the ones in a relationship that take time off to have children while the man (like my husband) continue their career uninterupted. I took nearly a year off for my first, and when I got back into the workforce, I was in the same pay bracket as new graduates even though I had previously been in my career for 4 years. THEN my husband's job moved. We could either have him leave his job and find a new one, or have me leave mine to move and find a new job. Considering he had 5 years in at that point, and I was a new employee, it only made sense for ME to leave MY job. Now, in all reality I have only worked one less year then he has and yet my pay is that of someone very new to the field (once again starting over in a business) and his is not.
Causing a gap in pay? You bet. Due to gender discrimination- nope. It just is the way it is.
Why do women make less?
One need only look at women's choice of majors in college. I think back to my university. We had four "schools" that had obvious financial implications:
1. Science, math & Engineering - leads to high paying jobs mostly - about 10% female
2. Business - mostly leads to higher paying careers - about 30% female
3. Humanities & Social Science - tend to lead to lower paying careers - about 70% female
4. Education - lowest paying careers (see NACE data & the Georgetown study) - 90% female
Women tend to choose majors that lead to lower paying careers. It's no surprise that they make less money in general.
Obviously no company is going to pay a female less for doing the same job as a male. In today’s workplace that’s just propaganda. A recent article that said women won’t have equality in the work place till 2021, but in reality females currently make-up 52% of the work force. Our society is telling girls to be strong and speak their minds while telling boys to be PC, sensitive and understanding to everyone and everything. This gender based repressive double standard combined with the inhalation of the family. Has more and more males growing up knowing only a female authority figures and no male authority model other than the “Homer Simpson” buffoons men are depicted as in the media. Shifting us into a matriarchal society.
I love this .. they can't even get their own twisted numbers right: The researchers controlled for "work patterns," including years of work experience, education, and hours of work per year, as well as differences in industry, occupation, race, marital status, and job tenure. With controls for these variables in place, the data showed that women earned, on average, 20% less than men during the entire period 1983 to 2000 + Economist June O'Neill, former director of the Congressional Budget OfficeOffice, found an unexplained pay gap of 8% after controlling for experience, education, and number of years on the job. + O'Neill found that among young people who have never had a child, women's earnings approach 98% of men's. So what is it folks? 77%, 80%, 92%, 98%?
The REAL answer is, when you compare people on a equal basis (same jobs, same years of sevice, same education), the last numbers come close with studies all coming in from 92-98%. There IS NO GAP!, it's all made up! Well, what about the 92-98% mark you say? These same studies have found cultural / societal differencs account for that. Women are less likely to be bold and negotiate for large pay increases then men. Study after study shows the same thing. Of course women's groups keep ignoring this and pushing for more equal pay laws. But that Equal Pay Act of 1963 already does that. Oh, that's not good enough for them. They keep harping on that false 77% figure as the only way to get that number to increase if pay women MORE for doing less work than men. In their eyes, that person walking on that steel I-Beam in construction should earn the same as a clerical person sitting in a nice air conditioned office. Why should that poor female be penalized because she can't walk the I-Beam .. you need to boost her salary. That is the crap that they want to shove down your throats.
It is in some ways fair to say that women are earning less because they have jobs with less responsibility and in career areas in which people earn less. But, did they choose these jobs and career areas willingly, or did they go into them because they had no other choice?
We can find that a male and a female (if the female has no children and is young) will make about the same amount of money at a job. We can also find that young women, on the whole, make more money than men of the same age. Again, this obscures a couple of facts--young men make less money because more of them are foregoing a college education.
The fact remains that a woman who is just as competent as a male will not be offered a job in the first place--in my department, there were five of us who graduated with PhDs at the same time. The tall, white male with a deep voice (who was probably the dumbest of the five of us) got a TT position immediately. The short, white male with a somewhat higher-pitched voice got a visiting professor position immediately and politicked it into a TT position. One white female with teen children got a $30K position working half again as many hours as the males and supervising about 50 adjuncts. One white female with grown children got a full-time instructor job making pretty good money, but at the mercy of administrators who told her what to do and when. One non-white female (arguably, the second-brightest of the lot) with a young child got nothing but part-time, adjunct positions.
It is virtually impossible to tease out, even with good research, how many women get locked into lower-paid positions by virtue of nothing more than their gender and the fact that they have children. Each case is so much different. It really is meaningful, though, that even when women have the same abilities, the same training, and the same ambitions--they get less money if they have children and get offered the less attractive jobs. Researchers will always claim that they "chose" the "more flexible" positions.
If I had it to do over again, as the non-white female mentioned above, I would have gone into a female-dominated field like education. There, I would have excelled. I might not have made as much money as a white, tall, deep-voiced male colleague who would become a superintendent--but at least I'd have healthcare coverage. Women go into the lower-paid professions because they are female dominated and they are less likely to be discriminated against. Professions dominated by women are lower paid because . . . they are dominated by women. Look at any field which used to be predominantly male and has now become predominantly female--look at the wages. They will drop as women enter the profession.
That 77 cents on every dollar figure is meaningful. It indicates (though it doesn't directly reflect) the degree to which women are tracked into fields where they will make less money. If they resist this tracking, they will wind up making even less, or nothing at all.
Remember that it is often said that women don't get raises because they don't ask for them. Then, someone did a study on women who asked for raises--they found that such women frequently lost their jobs or were demoted soon thereafter. Women don't go into higher-paid fields because they are smart enough not to do so (they will be the first ones screened out); women don't ask for raises because they are smart enough not to (they will be the first ones laid off).
This is way, way, way more complicated than you think.
But I've wondered about these statistics ever since reading that women teachers also get about 77% of what men teachers get. Since the salary scale is written in stone and doesn't depend on sex, to me that's WAY off. And since most school systems require teachers to get masters degrees or equivalents over time, and differences in where males vs females are distributed on the salary scare are minimal.
If there is a pay difference then, It all equals out when the Woman go out on a date and expect the Man to pay for her evening out. I guarantee if woman knew she made more than a man she would still expect him to take her out.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
LATEST BLOG POSTS
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'