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April 12 2016

Equal Pay Day: What's Really Causing The Gender Wage Gap, And How To Fix It

Washington Examiner
featuring Sabrina Schaeffer and Carrie L. Lukas

It's that time of year again when gender activists claim women are discriminated against en masse by employers and paid less than men as a result. These activists will refer to this alleged discrimination as the gender wage gap.

There is a gap between men and women, but it is not a wage gap — it is an earnings gap. Working women earn less on average than working men, but it is not due to some widespread discrimination or the elusive, conniving patriarchy.

Rather, the gap is due to the different choices men and women make during their education years and careers. The current gap — estimating that women earn 79 cents to the dollar that men earn — is a two-cent improvement from when I first started writing about the topic two years ago. But the real issue is not what the number is, but the misleading methods by which it is derived. In order to calculate a 21-cent earnings gap, one must overlook that the average working woman works in a lower-paying field and works fewer hours each week than the average working man.

The gap nearly disappears when you adjust for these factors, and the causes of the much smaller gap that remains cannot conclusively be linked to discrimination, either. The White House knows this, the American Association of University Women knows this, and yet these two groups continue to push the idea that the gap is due to discrimination and suggest solutions based on that assumption.

When it's pointed out that the gap is due to women choosing different occupations, majors and number of hours worked, activists leap to a new argument, bizarrely claiming that women's choices aren't really their own. They try to explain that the reason nine of the top 10 highest paying fields are dominated by men and nine of the top 10 lowest paying fields are dominated by women is due to societal pressure — that women somehow aren't responsible for their own decisions.

It must be a wonderful racket to dominate the media each year with spurious claims that women are helpless victims of society, forced to take teaching jobs not because they love children and teaching, but because "the man" makes them.

The activists make a point of using the widest measure of the gap possible — excluding things like differences in occupation, education, hours worked or time removed from the workforce. Otherwise, their "women as victims" narrative falls apart, as the Manhattan Institute's Diana Furchtgott-Roth points out.

"When women are compared with men in the same jobs, with the same credentials, and the same job tenure, the wage gap practically disappears," she wrote. When controlling for all those differences, there's still a gap of three to six cents. That gap may be due to discrimination or some other factor still not controlled for.

The fact of the matter is that women aren't getting hired for three-quarters of the cost it would take to hire a man. If that were the case, why would employers hire men, when they could just hire women and pay them less?

Nor is the gap the result of women somehow being forced by society into lower-paying fields. I personally believe women are intelligent enough to think for themselves and choose careers that best suit their desires, needs and goals.

Still, there are some things the government can do that would allow employers to get the best out of their employees and allow those employees to enjoy a better work-life balance. Most of these solutions, put forth by the conservative Independent Women's Forum, actually involve getting the government out of the business of micromanaging American businesses.

The report from IWF is characterized as an agenda for improving the lives of women specifically — which will help with marketing in this woman-focused culture — but the suggested policies will help all workers. Many of the solutions are classic Republican requests: Reform the tax code, reduce capital gains taxes and don't increase the minimum wage. But there are also some ideas in here I haven't seen before that would help parents work while raising their children and encourage younger Americans to save for retirement.

One of the big factors contributing to men and women's different earnings is the fact that women tend to take time off of work to have and care for children. IWF proposes helping women who return to the workforce save for retirement by expanding "catch-up" contributions to IRAs and 401(k)s. Americans over 50 are allowed to make larger contributions to their savings accounts as they anticipate retirement. IWF suggests affording a similar opportunity to workers who miss time taken to care for children or other family members.

"This would move away from a system that penalizes caregivers and help people save more so they have their own safety net ready for retirement," IWF wrote in their report.

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Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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