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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.

By MSN Money Partner Apr 9, 2013 5:51PM

This post comes from Stacy Johnson at partner site Money Talks News.


Money Talks News on MSN MoneyTuesday, 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.

 

Image: Business people working together (© Terry Vine, Blend Images, Blend Images, Getty Images)But is it real?

 

Read the following statement from the National Women's Law Center (.pdf file), then decide what it means.

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 perpetuated.


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:

143Comments
Apr 9, 2013 8:12PM
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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.

Apr 9, 2013 9:12PM
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I don't think the gender pay gap is real.  I shall outline my reasoning.

Companies do not care about workers.  They just want X work done for the lowest possible cost.  They are willing to ship jobs over to slave-labor countries just to save a buck.

If a gender pay gap existed, companies could save money and undercut competition by hiring only women.

Mini-conclusion:  If there were a gender pay gap, companies would only hire women.

Companies do not hire only women.

Full conclusion:  The behavior of companies is inconsistent with and falsifies the hypothesis that there is a gender pay gap.
Apr 9, 2013 9:03PM
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I would like to see a study on who gets more benefits.
Apr 9, 2013 9:48PM
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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.

 

 

Apr 10, 2013 2:39AM
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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.

Apr 9, 2013 9:09PM
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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.     

Apr 9, 2013 8:18PM
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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.

Apr 9, 2013 10:16PM
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If more women became loggers and more men became merry maids it would even out. Not likely though.
Apr 9, 2013 11:51PM
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I have to say that women in my trade are rare; that said, they make as much as the men do... IF they are willing to work the 13-15 hour days and sell, sell, sell. It is hard work, but rewarding if you are willing to NOT spend much time with your family. I have to agree that the gender gap is ambiguous at best.
Apr 9, 2013 11:14PM
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When it comes time to negotiating salary, I have noticed a huge difference between the men and women's approach.  In the initial job offer, the three men we hired this year, went back and forth on salary, 4, even 5 times.  When the initial offer was made, it was anticipated that there would be negotiations.  Whereas with the three women that we extended offers to, they either took the first offer, or turned it down altogether (did not try to negotiate).  Consequently, the men started out at a significantly higher salary than the women. 
Apr 9, 2013 9:14PM
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Thomas Sowell clarified the facts of the argument that things are not as they appear in the 'Gender  Bias and Income Disparity' discussion in 2008 - the video is online. Do we push the 'unfair to women' rhetoric or is it an incorrect assumption? Determine for yourself.  
Apr 9, 2013 9:17PM
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on an equal playing field, there should be no difference in wages.  I wish the world was perfect and one could be judged only by their performance.  We are a work in progress.  If you want more money, be a better negotiator.  I know most jobs have a limited amount of money to spend on any given position.  So maybe the answer is to be confident and hold out for a better deal.
Apr 9, 2013 8:16PM
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Is the gender pay gap real? No. Not at all. There is however, a gap between jobs and pay for the skilled and competent and jobs and pay for alumni and social network buddies. Name a big business that is actually thriving, not thriving solely on Ben Bernanke's fiat money infusions into the market. Paper and Button pushing are Minimum Wage jobs. So anyone making more is making too much. Real jobs, the ones economies are recovered and sustained on, take actual effort. Fear not though, we are about to genuinely crash this false economy. The next day there won't be pay unless you can do something real. Suddenly, as it has been throughout history, it will separate the able from the psychopaths and the skilled from the shills. Equality is great when blathering politically, but when you need to eat, nobody is really concerned about your gender, just whether you can bring home the bacon and fry it up in the pan.  
Apr 9, 2013 10:22PM
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Finally! Someone to dispel these lies. Ask the women that were in my office if they earn 77 cents/dollar and they would certainly say no, otherwise, they'd be really rich instead of just rich.
Apr 9, 2013 11:03PM
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I personally do not see the pay gap when compared to the same everyday job. Almost everyone I know including myself has a female spouse that makes more than the male spouse. On another level, CEO males usually make more than woman when added as a group because there are more male CEO's than women. These numbers can be made out to come up anyway anyone wants them to. How many women have desk jobs compared to men? How many women have physical labor jobs compared to men? Etc.

Another factor you never here is that their are more women working in the USA than men! FACT!

In the end,it all balances out (When talking about "working" men and women)!
Apr 10, 2013 11:41AM
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I grew up in a household with a disabled father where our mother was the breadwinner and we were the poorest family on the block because my mother got, back in the 60's, about 60% of what a man would get in the same job (key punch and then computer operator).  So I'm all for equal pay.

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.

Apr 10, 2013 2:59AM
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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.

Apr 9, 2013 10:59PM
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I don't think there is a pay gap but a HUGE lack of effort on the statisticians to gather ALL the pertinent data or a huge effort on their part to bias the results.
Apr 9, 2013 11:30PM
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The gender pay gap is currently the PC thing to talk about.  BUT, it is false and brought up every year in order for women to feel sorry for themselves and have something to whine about..  The figures used vary greatly depending on who is telling the ......Once upon a time......."story".  Same thing is played out at another time of the year when women talk about their worth at home.  This one is hysterical to read again depending on who is telling the story.  They are drivers, cooks, teachers, seamstress, computer experts, handywomMAN, and other laughable trades person.  This is just feminist circulated hoopla. 
Apr 10, 2013 2:38AM
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Case in point,  a big part of the current doctor shortage is a result of women doctors.  Currently over half of the doctors graduating from medical school are women.  Women doctors, on average, have much shorter careers than their male counterparts.  They are also much less willing to work long hours.  Women tend to specialize rather than go into general practice.  Despite  all this, women still enjoy affirmative action when being granted admission into medical school. Women doctors are paid less, but it has nothing to do with discrimination.
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