April 8 2014

More on the 77 Cents Myth...

Charlotte Hays

As you know today is “Equal Pay Day,” an annual “holiday” aimed at perpetrating the myth of the 77 cents gender wage gap.

We have a variety of articles on the IWF website today about the 77 cents gap that is false but nevertheless beloved of President Obama—who mentioned it in his State of the Union address—and others who see in it political gold.  

Since IWF has been in the forefront of the move to tell the truth about the gender wage gap, I want to call your attention to an excellent dissection of the 77-cent gap in today’s Wall Street Journal.

The American Enterprise Institute’s Mark Perry and Andrew Biggs write:

The 23% gap implies that women work an extra 68 days to earn the same pay as a man. Mr. Obama advocates allowing women to sue for wage discrimination, with employers bearing the burden of proving they did not discriminate. But the numbers bandied about to make the claim of widespread discrimination are fundamentally misleading and economically illogical.

In its annual report, "Highlights of Women's Earnings in 2012," the Bureau of Labor Statistics states that "In 2012, women who were full-time wage and salary workers had median usual weekly earnings of $691. On average in 2012, women made about 81% of the median earnings of male full-time wage and salary workers ($854)." Give or take a few percentage points, the BLS appears to support the president's claim.

But every "full-time" worker, as the BLS notes, is not the same: Men were almost twice as likely as women to work more than 40 hours a week, and women almost twice as likely to work only 35 to 39 hours per week. Once that is taken into consideration, the pay gap begins to shrink. Women who worked a 40-hour week earned 88% of male earnings.

Then there is the issue of marriage and children. The BLS reports that single women who have never married earned 96% of men's earnings in 2012.

Of course, it is harder to rally the troops and get them to vote Democrat or sue their employers over a four-cent wage gap—not that we advocate paying a woman even four cents less than men on the basis of her gender!

Politicians on the left know that it is potent to say to a woman, “You’re being cheated, and the government is here to help.”

Thus the 77 cents gender gap, however often it has been debunked by responsible economists, has a lot of bitter clingers. It is the pretext for more government intrusion into the work place.

But there is an irony:

The administration's claims regarding the gender pay gap are faulty, and its proposal to make it easier for women to sue employers for equal pay would create a disincentive for firms to hire women.

 

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