March 22 2013
by E. Thomas McClanahan
Next month, brace yourself for another round of grumbling about gender discrimination in the workplace. April 9 is Equal Pay Day, supposedly the magic point at which women finally make what men made in the previous year.
The National Committee for Pay Equity, citing a Census Bureau number, says earnings for women are “statistically unchanged,” with women receiving only 77 percent of men’s earnings. The figure for the previous year was 77.4 percent.
What many people don’t know is that this is a cherry-picked number and the idea that it’s an accurate measure of discrimination is grossly misleading. While workplace unfairness hasn’t been banished, studies that correct for such factors as life choices and family situation show that discrimination today is minimal at best, and in some cases has reversed — with women making more than men.
President Barack Obama has repeated the 77 percent number as if it were written in stone. In his recent State of the Union address, he called on Congress to “declare that women should earn a living equal to their efforts.” Supporting documents made public by the White House referenced the 77 percent number, saying that “on average women generally make 23 cents on the dollar less than men.”
Glenn Kessler, the fact check guy at The Washington Post, gave this issue a good workout last year, revealing that all of the pay-gap numbers derived from government statistics have serious limitations.
The number used for Equal Pay Day comes from the Census Bureau and is based on annual wages, a broad measure that captures categories such as bonuses and investment income. But it doesn’t account properly for jobs that only run for part of a calendar year, such as teaching. Teachers, many of them women, may not work in the summer.
Because women generally work fewer hours than men, annual wages is a very poor measure of gender discrimination.
The Bureau of Labor Statistics uses weekly wages, which is a bit better, but it leaves out bonuses and the like. Using this measure, BLS says women’s earnings are 81.2 percent of men’s.
The government also looks at this from an hourly wage standpoint, and here the pay gap shrinks even more: Women make 86 percent of what men make. But with this number, too, there’s a problem: Hourly wages don’t measure pay for salaried workers. And as Kessler notes, “under this metric for people with a college degree, there is virtually no pay gap at all.”
In fact, in some instances, women are making more than men.
Writing in The Wall Street Journal, Carrie Lukas of the conservative Independent Women’s Forum cited a 2010 study by the Reach Advisors research firm, which found that for single, childless urban workers ages 22-30, women’s pay outpaced men’s by 8 percent.
As Lukas remarked, that makes sense, given the greater educational attainment of women and the increase over the years in “knowledge-based” jobs.
Kessler cited a report by the St. Louis Federal Reserve Bank, which looked over the research on this subject and concluded that when women are compared with men in similar circumstances, the actual gender gap is much lower than “the raw wage gap.” Fed researchers cited a Labor Department report, which concluded that when you correct for such differences, the hourly wage gap drops to about 5 cents.
Groups such as the National Committee for Pay Equity are doing a disservice by exaggerating the extent of workplace discrimination, apparently in the hope of generating more resentment and creating pressure for more costly federal regulation.
Workplace discrimination may not have vanished but it’s wrong to suggest women have made so little progress.
Even in a labor market free of discrimination, the pay gap number may never fully close.
Women and men will always make somewhat different choices, with women by and large choosing jobs that offer fewer risks, greater flexibility and more ways to balance work and family life.