Tuesday, April 17, 2012

"Equal Pay Day" is Mostly Wrong

Today is "Equal Pay Day," an annual symbolic protest of the supposed gender gap in wages.  It is based on the number of additional days that women have to work into the new year to equal the median wage of men in the prior year.  Last year the median annual income of women working full time and year round was 77% of men's median income. Thus, women need to work an extra quarter of a year - that is, until today - to catch up.

The implication of this argument is that women make 77% of what men make due to discrimination.  A moment's thought, though, should dispose of this argument.  If women really did exactly the same work as men for only three quarters of the cost, no rational employer would hire men at all.

The American Association of University Women, who calculated this ratio, admit that when you control for several things that should be controlled for - college major, occupation, industry, sector, hours worked, workplace flexibility, experience, educational attainment, enrollment status, GPA, institution selectivity, age, race/ethnicity, region, marital status, and number of children - the gap drops to 5% one year after college graduation.

The biggest difference is not simply between men and women, but between fathers and mothers. Married fathers are likely to work more, more steadily, and seek every opportunity to make more money for their families. Married mothers are more likely to scale back their work to have a better balance with their family life.  Married couples usually divide labor and specialize for the good of the family as a whole.

Of course there is some sex discrimination in employment. The Lilly Ledbetter Fair Pay Act, signed into law by President Obama a few years ago, did address a real problem.

But most of the gender gap in wages is due to different choices of how to live that men and women, and especially fathers and mothers, make about work and family life.


Diane M said...

So I agree and disagree. The idea that women are earning less pay for equal work is completely misleading. On the other hand, the fact that women end up with lower earnings than men is something we need to be concerned about.

Women putting kids first and working less is a social good that everyone benefits from. It's not just a choice women should pay for. Mothers (and fathers who do child care)should get real payment in the form of Social Security credits and tax credits. We should get help getting back into the work force and having meaningful part-time flexible work. We should have protections in place if our spouses leave us or die or become disabled.

Brendan said...

I don't think a 5% gap is anything to be proud of, but Diane makes an excellent point: the controls are a pretty big dodge. We can control for occupation and industry, but why is there less pay in occupations and industries where women are more prevalent? We can control for educational attainment, but why are women attaining less education? If we control for marital status--wait, shouldn't there be roughly as many married men as married women? Equal pay is a bright indicator of systemic inequality, and easy to organize around, but I don't think anyone behind EPD would say that simply paying women 30% more is a solution.

gruntled said...

Pay is not a measure of social value. It is a measure of market value. There is not a conspiracy to pay less in women dominated fields. Women flock to fields where the work is safer, in better conditions, with more control of your time. Since more people want that kind of work, employers can pay less.

Women actually attain more education, but in fields that pay less. And this is mostly because more women like to do that kind of work.

There is the further issue that women pay themselves less when they are the boss, they are less likely to negotiate for pay, and they are less likely to seek jobs that pay more simply because they pay more.

Brendan said...

Who said anything about a conspiracy? Thanks to the way our brains work, systems of oppression don't require organized or deliberate action to perpetuate (but do require immense effort to counter). As for the "women don't ask" argument, I believe the data has spoken.

gruntled said...

I am missing a step in your argument. Why is lower pay in a field evidence of - or perhaps the agent of? - oppression?

Brendan said...

I think a consistent and significant imbalance of economic power between two distinct groups, in every human culture on Earth, qualifies as oppression. We can use a different term if you'd like.

As an aside, thanks for engaging on this with me; I find this kind of debate useful and educational, and as you point out, I tend not to notice when I skip steps.

gruntled said...

I guess I don't think of men and women as "distinct groups." Human beings live in families, which usually include men and women, of all ages. Married people - which most of us will be - divide up all the duties of taking care of their families as a unit, not as two individuals who belong to distinct groups.

Brendan said...

But most of us is not all of us, and as you've pointed out here before, families where a woman is the chief or only source of income are massively disadvantaged. To a married woman in a two-job household in the middle class, the pay gap may merely rankle, but to women managing families below the poverty line, that missing 23% can mean eviction, malnutrition or untreated illness. That's why I want to see women educated in all fields, tracked into a broader range of careers, and compensated fairly for the social good they do.

(Yes, yes, I know--they should just marry their baby daddies.)

gruntled said...

(We agree on point #1).

I have been teaching Susan Pinker's The Sexual Paradox this week. She points out that in richer societies where women have more choice of occupations, they choose female-typed jobs more than they do in poorer countries, or poorer situations in rich countries.

I am, of course, for open choice in all jobs for men and women. But I do not expect that attempting to track women into a broader range of careers will now make most occupations less sex-typed.

Anonymous said...

Women have out numbers men in law schools for year. Men outnumber women in high powered positions in law firms and other law related careers, significantly.

Part of this is caused by a "choice" by women to drop off the career ladder in favor of having a family.

However, I think women who have not done so, would overwhelmingly tell you that their bosses, employers and mentors encourage and expect them to make this "choice" regardless of thier marital or parenthood status.

In most reputable firms, the women accociates do make the same as their male counter parts. However, the expectation that they will "drop out" inhibits their ability and eventually their desire to achieve a higher status. This does not always (though it often does) take the form of blatant discrimination, but it is a real problem that women who are well educated face.

And trying to justify such discrimination by arguing that the women make the choice to work less doesn't help the problem. It simply re-enforces the message that women should be expected to drop out and employers shouldn't put as much effort into developing their women employees.