By Julie O’Connor
Next time we launch into that eternal debate over the gender wage gap, let’s start with a clear-eyed look at reality: The 77-cent figure that’s used by the Obama administration to discuss how much a woman earns compared with a man’s dollar is bogus. It’s wrong to use that number as the basis for any corrective government policy.
To determine the actual gap, you’d have to compare women and men who make similar life choices. That’s not as easy a number to get as you might think. There’s a whole range of estimates — just check out the accompanying chart.
Yet upon closer examination, devoid of political divining, the overall wage gap exists, but is not as unjust as it’s made out to be. Economists are all over the map, but when they take life choices into account, they estimate it at somewhere between 91 and 95 cents to a man’s dollar.
That gap is significantly narrower than the 77-cent figure because it takes into account some obvious factors than many studies, including the metric used by Obama and others for decades, simply ignore. Here are two of the big ones: Women are more likely to take time off for raising children. Women also tend to choose lower-paying professions.
There are cultural roots to paying less for jobs such as teaching and nursing. But today, you get plenty of crossover. In many cases, if a woman wants to earn more, she can change careers.
And the remaining pay gap isn’t just about outright discrimination. It’s also about lack of child care, good career advice and the undervaluation of certain work. Societal expectations, harassment and hostile environments keep women out of some careers. Most workplaces are organized as if no one had children or care-giving requirements. And choices made early on affect later ones: A woman in a less lucrative profession than her husband, for instance, is more likely to be the one to take time off to raise children.
That’s not to say that unfair pay doesn’t exist. The 91-cent estimate, by a pair of Cornell University labor economists, still leaves about 40 percent of the wage gap unexplained. Other studies have also found unjustified pay disparities.
Research on college graduates one year after graduation, for instance, determined that women earned only 95 percent of what men earned, even after controlling for a myriad of variables such as college selectivity, grade-point average, career choice, job experience and continuity, training and demographics such as age, race and ethnicity.
Another study, published last month in the Journal of the American Medical Association, found that male doctors make $12,000 more per year than female doctors, even after controlling for a host of factors including specialty, productivity, work hours, job title and parenthood.
And we have examples from the headlines, such as Wal-Mart, which recently spent billions defending against what would have been the largest class-action lawsuit in history by female employees alleging systemic pay and promotion discrimination.
One example of a policy that could make a difference is greater transparency in compensation. The Paycheck Fairness Act, which died in the Senate in June, wouldn’t have forced employers to reveal salaries, but it would have prevented them from retaliating against workers who choose to discuss their pay because they suspect discrimination.
Increasing the number of women in traditionally male fields also would help, though studies show it’s unlikely to fully eliminate the gap. While the gender pay gap in the traditionally male fields of science, technology, engineering and mathematics is smaller than in the overall workforce, there’s still a disparity, with women earning less than men.
So yes, there is a gap, but it’s not as big as the White House and others have made it seem. We’ve made some real progress and we need to make more. But before we do that — let’s put that 77-cent figure to rest.
Julie O’Connor is a member of The Star-Ledger editorial board: (973) 392-5839 or firstname.lastname@example.org
Women are paid less than men, and they always have been. Even today, when a young man and woman take jobs in the same field, the man earns more. It seems clear that discrimination is alive and well.
But exactly how big is the gap? That’s where politics comes in. The mantra used by President Obama to demonstrate injustice in the workplace, that women earn 77 cents to a man’s dollar, is a statistical sham. But it’s an election year, he’s courting women voters, and he refuses to let it go.
“President Obama knows that women being paid 77 cents on the dollar for doing the same work as men isn’t just unfair, it hurts families,” his new TV ad intones.
That figure is based on a metric that’s been used for decades, but it doesn’t account for key factors such as the occupations women choose, which are more likely to be low-paying, or their decision to leave the workforce when they have children.
So as a measure of unfair pay, it’s meaningless. Many of the other estimates aren’t much better. A closer look at the numbers:
77 cents to a man's dollar: A raw number based on annual wages of everyone who works full time and has earnings for at least 50 weeks a year, taken from U.S. Census data. It doesn’t count the many women who work full-time hours but not all year long, including teachers. And it doesn’t control for career choice, taking time off for raising children or the number of hours worked per week, which tends to be lower for women.
81 cents to a man's dollar: Based on weekly wages from the Bureau of Labor Statistics. Unlike annual wages, it doesn’t include extras such as bonuses. But it’s more of an apples-to-apples comparison, because it takes into account the women who don’t work all year long. It doesn’t include self-employed people, though, and it still doesn’t control for the same things as the 77 cent figure (career choice or taking time off for raising kids).
86 cents to a man's dollar: Based on hourly wages from the Bureau of Labor Statistics. Not everyone is paid by the hour — only 62 percent of women and 56 percent of men were in 2010. But this metric controls for factors such as full-time/part-time status. It doesn’t control for career choice or taking time off for kids.
91 cents to a man's dollar: This is a better estimate, from a study by Cornell University labor economists Francine Blau and Lawrence Kahn. It makes an effort to account for the “why,” by controlling for variables, including taking time off for parenthood, education, years of experience, career choice, race and other demographic data. It means up to 40 percent of the gender wage gap is still unaccounted for, because it has nothing to do with life choices. Which raises the question, is it discrimination?
95 cents to a man's dollar: This estimate, from a study commissioned by the US. Department of Labor, uses more recent data than the Cornell researchers (from the 2007 Current Population Survey, while Blau and Kahn used 1998 data from a University of Michigan longitudinal household survey). It controls for similar variables, including career choice. But it instead divides careers based on the prevalence of female workers in the job, not the job title. That’s meant to account for the fact that women not only choose particular careers, but also certain lower-paying specialties within them.
Sources: Institute for Women’s Policy Research, U.S. Census, Bureau of Labor Statistics, CONSAD Research Corp.