June 10 2013

US News & World Report: In Wage Gap Debate, a Fight Over 77 Cents

US News & World Report

In Wage Gap Debate, a Fight Over 77 Cents
Even hard data on pay equity lead different groups to vastly different conclusions
By DANIELLE KURTZLEBEN

Oprah says she made $22,000 in 1980 while her male co-anchor made $50,000.

In the pay gap debate, 77 is perhaps the most controversial number.

On one side, people who say men unfairly out-earn women often point to stats that show women make $0.77 for every dollar a man makes.

But others argue the figure comes from fuzzy math, saying the so-called "wage gap" is a myth. And as the 50th anniversary of the Equal Pay Act, a law intended to prohibit gender-based wage discrimination, dawned on Capitol Hill today, the debate over pay fairness was no closer to resolution.

Statistics do show U.S. women on average make less money than men. The 77-cent figure comes from government numbers and measures how much full-time working women earn compared to full-time working men. The disagreement is over how meaningful that 77 percent figure is. Exactly what that figure means could dictate how that gap is closed.

"The 77 cents ... that statistic is a myth," says Sabrina Schaeffer, director of the Independent Women's Forum, a right-leaning women's advocacy group. "It doesn't give us a very accurate view of what's happening in the workplace."

Those who consider the 23-percent gap to be a myth often claim it's a function of education and career choices. Women more often choose low-wage occupations like social work, for example, while men more often become engineers. Likewise, women also often work fewer hours or even leave work altogether for a time to raise children, which derails their earnings trajectory. Several studies have shown that these sorts of choices account for a large chunk of the wage gap.

A recent study from the American Association of University Women, for example, suggested that career choices account for a large chunk of the wage gap. It found that among recent college graduates, women earned 82 percent of what men did. However, after controlling for factors like college major and career choice, the gap shrank from 18 percent to around 6.6 percent.

Many of those recent graduates, of course, did not have children. Leaving the workforce – or even cutting back on hours – in order to raise children can also derail a woman's career and earning potential. Another 2009 study prepared for the Labor Department found that the wage gap after taking into account factors like motherhood was somewhere between 4.8 and 7.1 percent.

While the AAUW found a smaller wage gap after controlling for various factors, that group still believes the 77-cent figure is an important statistic.

"It's just what's going on. Those women are raising families, they pay rent, they're paying mortgages, and they have the same expenses that men do," says Christianne Corbett, senior researcher at the AAUW.

And it's not just about earning as much as the guy in the next office, says one expert.

"Men are more likely to be concentrated in higher-paying jobs. Women are more likely to be concentrated in lower-paying jobs," says Fatima Goss Graves, vice president for education and employment at the National Women's Law Center. She points out that women make up nearly two-thirds of all minimum-wage workers. The 77 percent figure is meaningful, she says, because it reflects this "occupational segregation."

Describing the 77-cent figure as a "myth" may be a matter of semantics, but there is evidence that a very real, albeit smaller, wage gap persists. A gap around 6 percent was found in the above studies, and another 2007 analysis found a 9 percent gulf between men and women's earnings. Schaeffer acknowledges that this small gap could stem from discrimination. Another explanation might be that women do not negotiate for higher salaries as much as men do.

Different groups differ not only over how big the gulf is but also over how to close it. AAUW advocates for the Paycheck Fairness Act, a bill currently in congress that would require employers to prove that pay differences have nothing to do with gender. It would also protect workers who discuss their salaries with each other.

The Independent Women's Forum, meanwhile, believes that, via the Paycheck Fairness Act, the 77-cent statistic "is being used to try to heighten government intervention in the workplace," according to Schaeffer.

Closing the pay gap would have massive financial implications for American women, but a broader discussion of pay equity may be as much about a society's philosophy as it is about bank accounts.

"Sure, teachers are paid less than engineers, for example, and women are more likely to be teachers," says Corbett. "It tends to be paid less, but is it actually less valuable? That's an important lesson we haven't really dealt with."

 

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