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April 4 2018

Why Didn't President Obama Close The Wage Gap?

via Forbes
by Carrie L. Lukas

Organizers of next week's “Equal Pay Day”—the day created to signify when women have finally earned enough to make up for last year's wage gap—want the public to believe that the gap between men and women's earnings would be erased if only we had political leaders fully committed to women's equality and the right laws and regulations on the books.

But if that's true, then why didn't the wage gap disappear under President Obama?

Undoubtedly, Equal Pay Day champions—and groups that creation petitions and send out memes under the title “The Resistance” —are relieved to be able to use this occasion to bash their favorite nemesis, President Trump. But the public ought to wonder why the date of Equal Pay Day and the size of the wage gap didn't budge during President Obama's eight-year term, when he was supposedly a staunch advocate for women's equality and signing legislation that they all claimed would advance the cause of equal pay and reduce the wage gap.

The truth is the causes of differences between men's and women's earnings are much more complicated than Equal Pay Day organizers would have people believe. The vast majority of this statistical difference isn't caused by discrimination, but rather is the result of the different choices that men and women make about work.

Consider just this one factor: According to the Bureau of Labor Statistics Time Use Survey, full-time working men worked 8.4 hours on an average work day while full-time working women worked 7.8 hours. It is hardly surprising that someone who works an extra 3 hours a week earns more than someone who doesn't. In fact, that one factor alone explains about a third of the wage gap.

Women and men also differ in their choices of industry and specialty, on how much time to take away from the labor force, and on what kinds of hours and shifts to work. Clearly, differences in the amount of time the average man or woman spends taking care of children plays a driving role. Women often choose lower paying jobs that are closer to home and have better, more flexible hours, while men earn more by working night shifts and commuting farther. Society can consider why women and men make these different choices, but it is no surprise or evidence of workplace discrimination that these different choices impact workers' paychecks and on aggregate statistics like the wage gap.

The public perception that the wage gap is driven by discrimination isn't just wrong, it's also harmful. It discourages young women (and men) from considering how their decisions will impact their long-term earnings potential. And some of the policies pushed under the guise of closing the wage gap also have the potential to backfire.

For example, the National Women's Law Center is currently pushing for the resurrection of a rule that would have required companies to provide new data related to compensation, sex, race, and other demographic factors. Such efforts sound promising and are sold under the banner of transparency but miss how these forms and how businesses work in practice. As Independent Women’s Forum explained our concerns with the proposed rule in a letter to the EEOC:

...the EEO-1 report overlooks that general job flexibility (e.g., telework, predictable scheduling) is something highly valued by women. Many women, particularly those with children, are often willing to trade additional salary for a more customized work environment that suits their individual and family needs…. Employers will be less likely to accommodate requests for flexible or alternative work schedules or positions if they are concerned that government officials will be examining these data points and statistics without this important context, and passing judgment on their compensation practices.

Overwhelmingly, businesses make staffing decisions that they think are in the best interests of their company and bottom line. Increasingly, they are working to reward employees by increasing wages and benefits. Of course, there are some bad bosses, and we all want to make sure that workplaces are free of discrimination, and that people are treated fairly and rewarded for their work and job performance. That's why we have laws on the books outlawing discrimination and people can and do take their employers to court for wrong doing.

Yet the public shouldn't be encouraged to assume that companies are routinely short-changing their female employees. Statistics like the wage gap have been misused for too long by those seeking to advance their own political agenda. Rather than taking the bait, people should consider their own experiences and how the people they know have approached matters of work and family life. They will likely see that maximizing earnings hasn't topped everyone's agenda, and that men and women sometimes have different priorities. And that's not something that Donald Trump—or Barrack Obama—can or should try to change. 

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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