April 21 2011
Men, Women and Wages
The Supreme Court recently heard arguments about a class-action lawsuit that was filed against the country's largest private employer, Wal-Mart. Justices won't be focusing on any evidence supporting claims that the big-box retailer systematically discriminates against female employees, but rather whether its hundreds of thousands of female employees can be considered a class.
Since Wal-Mart's many women employees had different managers, in different stores, in different locations, anecdotal evidence from individual women about potential discrimination will have little utility. The plaintiffs will have to prove that systematic discrimination exists throughout the corporation. And to prove this, they will surely look to statistics to make their case.
But we must be careful before accepting statistics as smoking-gun evidence of discrimination.
For starters, it isn't just any one company that appears to routinely pay women less. The Department of Labor regularly reports data showing that this is an economy-wide phenomenon. On average, a full-time working woman in the U.S. earns about three-quarters of the wages of a full-time working man. Yet this doesn't mean all of us ladies should be signing up to sue the entire economy for discrimination. Many factors other than discrimination affect how much a worker earns.
Take hours worked: Men tend to spend about 10 percent more time at work on an average day than women. That's one big reason why men end up earning more.
Or take education: While young women now earn the majority of bachelor's and master's degrees, differences in education levels of older men and women still play a role in wage discrepancies.
Family responsibilities also drive wage differences. Many feminist groups view this as inherently unfair - they see the fact that women shoulder the majority of child-rearing responsibilities as itself sexist. Scholars can debate why women continue to carry this role, whether it is their choice or perhaps unfair societal expectations. But it shouldn't be a surprise that someone who spends years out of the work force earns less than co-workers who consistently stay fully engaged in their jobs.
In the case of Wal-Mart, undoubtedly there will be reams of evidence that compares the wages of male and female workers in certain positions. The details will be important and difficult to pin down.
In "Why Men Earn More," author Warren Farrell shows that analyzing the male-female wage gap requires examining the specifics of each situation, since small differences in job type can have a profound impact on wages.
He also shows that favoritism toward women can, ironically, end up looking like discrimination. Companies that have an eye toward increasing the diversity of senior management may promote women with less experience to higher titles. With years less experience, the female executive's pay remains lower, which can end up looking like discrimination against women if all factors aren't taken into account.
Sometimes I wonder how a statistician would assess my situation. I have a bachelor's and a master's degree from Ivy League schools and a work career that, on paper, has been uninterrupted for 15 years. Yet I'm sure my tax returns are far less impressive than those of many of my peers from college and grad school. Is this some evidence of widespread discrimination in my chosen field of public policy research?
Well, I've worked in nonprofits for most of my career. In the past six years, I've had three children. I haven't worked full-time in an office since 2005, when my first daughter was born. I've taken pay cuts in exchange for incredible flexibility, and feel grateful to have had a situation that allows me to continue the work I love while allowing for lots of hands-on time with my kids.
And yet the Department of Labor would likely have a tough time figuring out why this educated woman, working full-time, makes comparatively less than many of her peers in her field.
My story isn't unique. Consider yours for a moment. I bet you'll find that you've always considered more than money when evaluating a job. And for women, this will be especially true, as other issues like proximity to home and flexible hours have likely taken on greater importance.
Statistics can provide useful information, but they also leave out much of the real story. Before concluding that differences in average wages are slam-dunk evidence of discrimination, consider carefully the many factors that affect how much someone earns. There's often a bigger story that statistics miss.