The Truth About the Pay Gap

Does gender discrimination hurt women's salaries?

Editor's Note: Steve Chapman is on vacation. The following column was originally published in April 2007.

New Year's Day is called that because it begins a new year, and Thanksgiving has that name because it's an occasion for expressing gratitude. But Equal Pay Day is named for something that, we are told, doesn't exist—equal pay for men and women.

The National Committee on Pay Equity used the occasion to announce that among full-time workers, women make only 77 cents for every dollar paid to men. The three leading Democratic presidential candidates have all endorsed legislation to fix the problem.

And the effort got new fuel from a report by the American Association of University Women (AAUW) Educational Foundation, which says women are paid less starting with their first jobs out of college, and that the deficit only grows with time. Pay discrimination, says AAUW, is still "a serious problem for women in the work force."

In reality, that's not clear at all. What we know from an array of evidence, including this report, is that most if not all of the discrepancy can be traced to factors other than sexism. When it comes to pay equity, we really have come a long way.

On its face, the evidence in the AAUW study looks damning. "One year out of college," it says, "women working full-time earn only 80 percent as much as their male colleagues earn. Ten years after graduation, women fall farther behind, earning only 69 percent as much as men earn."

But read more, and you learn things that don't get much notice on Equal Pay Day. As the report acknowledges, women with college degrees tend to go into fields like education, psychology, and the humanities, which typically pay less than the sectors preferred by men, such as engineering, math, and business. They are also more likely than men to work for nonprofit groups and local governments, which do not offer salaries that Alex Rodriguez would envy.

As they get older, many women elect to work less so they can spend time with their children. A decade after graduation, 39 percent of women are out of the work force or working part time—compared with only 3 percent of men. When these mothers return to full-time jobs, they naturally earn less than they would have if they had never left.

Even before they have kids, men and women often do different things that may affect earnings. A year out of college, notes AAUW, women in full-time jobs work an average of 42 hours a week, compared to 45 for men. Men are also far more likely to work more than 50 hours a week.

Buried in the report is a startling admission: "After accounting for all factors known to affect wages, about one-quarter of the gap remains unexplained and may be attributed to discrimination" (my emphasis). Another way to put it is that three-quarters of the gap clearly has innocent causes—and that we actually don't know whether discrimination accounts for the rest.

I asked Harvard economist Claudia Goldin if there is sufficient evidence to conclude that women experience systematic pay discrimination. "No," she replied. There are certainly instances of discrimination, she says, but most of the gap is the result of different choices. Other hard-to-measure factors, Goldin thinks, largely account for the remaining gap—"probably not all, but most of it."

The divergent career paths of men and women may reflect a basic unfairness in what's expected of them. It could be that a lot of mothers, if they had their way, would rather pursue careers but have to stay home with the kids because their husbands insist. Or it may be that for one reason or another, many mothers prefer to take on the lion's share of childrearing. In any case, the pay disparity caused by these choices can't be blamed on piggish employers.

June O'Neill, an economist at Baruch College and former director of the Congressional Budget Office, has uncovered something that debunks the discrimination thesis. Take out the effects of marriage and childrearing, and the difference between the genders suddenly vanishes. "For men and women who never marry and never have children, there is no earnings gap," she said in an interview.

That's a fact you won't hear from AAUW or the Democratic presidential candidates. The prevailing impulse on Equal Pay Day was to lament how far we are from the goal. The true revelation, though, is how close.

COPYRIGHT 2010 CREATORS SYNDICATE, INC.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Suki||

    Good morning reason.

  • Suki||

    In reality, that's not clear at all.

    If you just look around it is pretty damn clear. My gender-peers taking off every time they turn around to have kids or take care of their kids? I manage women much older than me and men around my age mostly because of that maternal issue. You even get to that later in your article. This was "settled science" in the 1990's by anybody who studied census data.

    Compare sexes by time in the workforce and women make out pretty good.

  • yep||

    I was just thinking about this the other day. As an hourly employee, I have a lower pay rate than many of the women I work with (who've been with the company longer). But I put in 60 hours a week, volunteer for weekend shifts, on-call shifts, etc. while the women do not (due to family and other commitments). Net result is I make more, even with a lower pay rate. No discrimination, just life-style choices.

  • -||

    "Gender peers"?

  • Suki||

    Age peers would be the same age as me. Sexual peers are the same sex. Sorry if the words I use are too big for you dash.

  • -||

    What's wrong with "women"?

  • Suki||

    "the other women my age in my line of work" is so wordy compared to "my gender peers"

  • waffles||

    Weird, I thought Suki was a dude? Either a dude or a mild to moderate Asperger's Syndrome. But queer.

  • phryxian houndmaster||

    Suki's posts have a low density of information transfer. For example, "Good morning reason." Suki might conceivably be an Aspie, but a far from typical one.

  • mad libertarian guy||

    Which pales in simplicity and elegance to "the women I work with".

  • The Angry Optimist||

    Suki is not a real woman. "She" is a weird fantasy character of John Tagliaferro.

  • Pedant||

    So Suki's "gender peers" are middle aged white guys with strange fantasy lives as asian women? That's gotta be a small peer group. Hey Suki - how could you possibly have gender peers at the office?

  • ||

    It is a fictional office.

  • DLM||

    What's wrong with "women"?

    I've been asking myself that for years. :)

  • Jim||

    In the Garden of Eden, God told Adam that he would provide him a companion meet for him, after taking a leg away. Adam pondered this, and replied, "what can I get for a rib?"

  • ||

    Good point about your gender-peers. I am literally the only man I know who left the work-force to care for a new child.

  • mad libertarian guy||

    Welcome to the Mr. Mom brotherhood.

  • Knoss||

    I think the one problem with the wage gap debate is families. When two people get married (or more), then have children you have a family with two adults. In most families the tasks of caring for the home the children,earning money are divided and often by tradition. If a man works full time and his wife works part time while carring for children chances are that they put all thier income in a joint bank account, have one home mortgae, share a credit card, decide together what to give the children for an allowance etc. The woman and man in this family have equal income and equal say in major financial decisions.

  • Slap the Enlightened!||

    Have you hugged your mosque today?

  • Suki||

    Good thing Chapman is on vacation again and we got this rerun. Otherwise it would be another mosque story about nothing libertarian.

    Apparently there is no real libertarian issue going on with that mosque, beyond the social bigotry of everybody who does not work at Reason, Slate, The New Republic and MSNBC.

    Imam gets State department money for his fund raising tour. Nope, nothing a libertarian should object to there, unless they are a bigot.

    How about zipping through the Port Authority bureaucracy just because it is a mosque? Only racists would have a problem there.

    Sorry, did I just do that? There is your alternate view mosque story :)

  • -||

    Now, now, John. Calm down. Don't make me send over some gender peers to slap you around.

  • Atanarjuat||

    Typically Reason focuses on issues that are neglected by the rest of the press.

  • Nancy Pelosi||

    Alright. That's it, you are officially under investigation!

  • towel head||

    When you hear the call to prayer at the site of the World Trade Center will will have won!

    Mwah-hahahahahaaaa!

    You Americans are soooo stupid!

  • Fist of Etiquette||

    This article talks as though Bush was still in the White House.

  • Jen||

    You must have missed the Editor's note at the top of the page.

  • Alan Vanneman||

    Actually, Steve Chapman is not on vacation. He's just completely out of it, and Reason is trying to cover for him.

  • Spiny Norman||

    Just like Konstantin Chernenko...

  • TheOtherSomeGuy||

    If women really did do the same work for less pay, then the market would force employers to hire all the women, something which is clearly not the case.

    Same idea as outsourcing work to China. A Union worker won't do the job for $60 per hour and a ridiculous benny package, the Chinese guy will do the job for two bowls of rice, guess who gets the job.

  • #||

    this is a key point. In malaysia where the minimum wage for women is lower than for men, all the electronics factories are 90 percent women. If an employer could truely get the same output from a woman as a man for only 77 percent of the wage, why would any company ever hire a man?

  • DLM||

    ...why would any company ever hire a man?

    Um... to do the jobs women won't do?

  • cynical||

    Perfect comeback to this whiny bullshit.

    Have you ever heard someone complain "they gave my job to an illegal, because they work for less"?
    Have you ever heard someone complain, "They outsourced my job to India, because they work for less"?
    Have you ever heard someone complain, "they gave my job to some non-union guy, because they work for less"?
    Now, have you ever heard someone say "They gave my job to a woman, because they work for less"?

  • jester||

    Steve is in rehab. He admitted his problem and the law requires Reason to keep him employed.

    He is helping to equalize the equal pay for equal work disparity that was formerly caused by pregnancy and child care leaves.

  • Johnny Longtorso||

    Steve is a dead man. Miss him. Miss him.

  • ||

    Missing the whole point. Time at your job, ability to do the job well, experience, willingness to work long hours and type of work done should have nothing to do with your compensation. Every job should pay the same in the name of the revolution, er, I mean equity, fairness, justice and a whole lot of other words that mean whatever I want them to mean.

  • Johnny Longtorso||

    We can only solve this problem by eliminating money and having the government issue you what you need directly.

  • Jeffersonian||

    I realize your tongue was firmly in your cheek here, but that raises the question: Where will the government get the things it issues directly to me?

  • #||

    and thats one of the major problems with marxism. I hate when people say "well it is a good idea on paper." No its not! Even if you get past the whole individual rights thing, and the fact the fact that you cant reshape human nature, there is still no practical way to actually allocate productive inputs in order to make the things you want to hand out.

    This is why in the Soviet Union, despuite huge increases in capital formation over its lifespan, the standard of living didnt go anywhere. Resources were increadably inneficiently allocated. You always had shortages of one thing and excess of another.

  • DLM||

    I think Communism and related -isms are good from bringing up a place from dirt poor to moderately poor, but it's a terrible idea to maintain a functioning society. Let societies evolve without forcing a ont-size-fits-all straightjacket on everyone.

  • Jim||

    They are actually the worst possible way to raise a society from being dirt poor. Instead, socialism/communism will simply cause that society to starve to death. This was demonstrated by the pilgrims of the Mayflower. They had to renounce their communal style of farming in favor of privately owned plots of land as they were on the verge of starvation.

  • Spiny Norman||

    That will be addressed in the next five-year plan.

  • ||

    The only other person in my system-wide position description is an idiot, doesn't have a graduate degree in the field and does far less than half the work I do and gets paid 25% more. Guess what gender she is.

  • -||

    Sometimes it's necessary to address past injustices with present injustices. Whenever you see the President about to make a speech, surrounded by ugly women, be afraid.

  • ||

    Oh, I am. I am.

  • Elena Kagan||

    Wait...what are you saying here?

  • Fiscal Meth||

    Don't worry Elena. Nobody said anything about trannies.

  • It's always 4:20!||

    Only white heterosexual males can be fired for gross incompetence.

    Anyone else gets a raise because it's cheaper than the inevitable lawsuit that happens when a member of a protected class gets the sack.

  • Gilbert Martin||

    "That's a fact you won't hear from AAUW or the Democratic presidential candidates. The prevailing impulse on Equal Pay Day was to lament how far we are from the goal."

    And why would anyone expect to hear the truth from them?

    Just as the NAACP, the Congressional Black Caucus and other assorted groups are in the business of race hustling for fun and profit, the AAUW and other assorted groups are in the business of gender hustling for the same reasons.

    It is counter productive to their "business model" to admit there is no actual problem that requires forcible redistirbution of other people's wealth to themselves.

  • Barry Loberfeld||

  • Law Student||

    Women are also receiving degrees at all levels in all non-science/engineering degrees at a higher level than men now. And in those engineering departments? Well I'm pretty sure my girlfriend's "diversity fellowship" isn't for her being a ginger.

  • Brett L||

    Adding biomedical engineering to my college's chemical engineering department greatly improved the gender distribution. Of course, BME was 75% female and ChemE was still 75% male, but mix them together and it was only about 9 females per 11 males.

  • Jeffersonian||

    Biomedical at my university was under the Electrical Engineering department and was largely male (but that was 30 years ago, too).

  • ||

    there is no need to worry about women. They will outstrip men in education and in the workplace. Their triumph will last for two hot minutes, however.

    First women lack the creative genuis of men and the kind of energy and will it takes to make the kind of economy that we expect to have. so we will be poor.

    Second, men will react by becoming unciviilzed. Basically, the whole country will become like the black ghetto, only worse because more people are involved, and because white men will be even more enraged than black men are now. A new group of unsocialized males, equating civilization and education and especially liberal democracy with female domination, unruly, hating all laws and rules, yet at the same time wishing for the strong father. For the first time, fascism will become a real possibility here. That will be the result of the feminist triumph in jobs and education.

    the myth is that american men are mean and oppressive. If that were true, feminism could never have happened to begin with. the american or rather the western man is the softest man on earth. But everything has its limits.

  • Jeffersonian||

    You know, there are limits to what you're saying here, but honestly I think we're beginning to see this phenomenon occurring even now.

  • zoltan||

    This is quite moronic as women and men are not huge blocks of the same people.

    That being said, treating men like shit the way many Jezebel-ists want to will create a society in which men are unhappy (perhaps just as unhappy as women are about the way they are treated by society).

  • DLM||

    That being said, treating men like shit the way many Jezebel-ists want to will create a society in which men are unhappy (perhaps just as unhappy as women are about the way they are treated by society).

    Nah. We'll just marry those hot Latinas or Asians instead. Then when they cuss us out we won't understand what they are saying anyway.

  • Fiscal Meth||

    "It could be that a lot of mothers, if they had their way, would rather pursue careers but have to stay home with the kids because their husbands insist."

    I wouldn't be surprised to find out that this happens enough to affect the numbers.

  • Sarah||

    Well, I'm not gonna speculate about whether there are enough of them to affect the numbers.

    But, anecdotally, I personally know of more people who would like to spend more time with their kids, at least when they're young, than there are people pining to work outside the home while their kids are young.

    The author mentions women expected to be the at-home parent, but says nothing of men who are expected to be the bread-winner.

  • Fiscal Meth||

    Good point. I guess I was just projecting my bread preference.

  • Sarah||

    I'm assuming we would agree that at least some of the different choices we make are genuine -- i.e., some portion of the more women staying at home than men reflect both partners' genuine preferences.

    But, let's assume that at least some of the discrepancy reflects social expectations interfering with first preferences.

    In that case, the wage numbers for women might go up if, freed from social expecations, some portion of women changed course and began to put career before family.

    However, we would also expect to see the wage numbers for men go down, as some portion of them, freed from social expectations, became free to choose family over career.

    My point is just that, which is the bigger injustice here? A man who is not given the option of spending more time with his kids? Or a woman not given the option of spending more time working?

    If we're going to lament the fact that gender expectations make women's wages artificially lower than they would otherwise be, shouldn't we also lament the fact that men's time with family is artificially lower than it would otherwise be?

    More than 90% of men either are, have been married or want to be married. Those men share their higher incomes with their families. A stay-at-home wife shares the benefit of that income. But does a working man share the benefits of being with his children every day?

  • High-School Dropout||

    +1

    This.

  • Chad||

    One difficult to measure factor that I have never seen accounted for in any study is the length of one's job commute. I remember reading one time that men spend on average eight more minutes commuting per day than women. This adds up to 40 minutes per week, or about 1.5% of the time men spend working. Men wouldn't be tolerating these longer commutes if they were not compensated for them.

    Part of the pay gap probably occurs because a few more men choose the longer commute for higher pay than women do when offered the same choice.

  • Leigh||

    Not only that, a family will more likely re-locate to an area where the husband gets a job, whereas, the working wife will generally get a job in the same area, not maximizing their potential earnings.

  • DesigNate||

    Statistics are bullshit. Anyone can manipulate numbers to make things seem bad...or good.

  • phryxian houndmaster||

    And anyone who understands statistics and bothers to ask for the original data can detect that manipulation.

  • Fiscal Meth||

    Nonsense. Studies show(with a 3% margin of error) that 97% of statistical studies are unbiased and take all factors into consideration.

  • phryxian houndmaster||

    A few years ago I came across a study that took the available data and struck out non-salaried positions from consideration. Then controlled for education and experience. The pay gap not only disappeared, it reversed. (although the difference was no longer statistically significant) Apparently most of the difference was because of personality factors that led male entrepreneurs to spend more time at work than their female counterparts. Now I really wish I could find that damn study again. I'd swear it wasn't a hallucination.

  • zoltan||

    Thomas Sowell did something similar--controlling for time out of the workforce for pregnancy and other factors. He found that older, white women are the highest paid subset. I believe this was from the book Economic Facts and Fallacies.

    A lot of the women complaining about this are humanities-degreed whiners who can't find a non-service job and want to use their position as a victim as an excuse not to take responsibility for their unhappiness in the job market.

  • mad libertarian guy||

    I've heard the gender gap argument is all seriousness from 2 people:

    1. A feminist in 20th century American lit studies who is on the "I'll likely never actually finish my PhD" track, yet I'll wonder, out loud, why I cant find a good paying job.

    2. An accountant who made more than both her husband and everyone else at her job who was of the same position.

  • DLM||

    Since a husband and wife can file a joint tax return, shouldn't the statistics on pay add up the income of both and divide it between the two equally?

  • ||

    As the report acknowledges, women with college degrees tend to go into fields like education, psychology, and the humanities, which typically pay less than the sectors preferred by men, such as engineering, math, and business

    They don't go into engineering and math because those schools (and fields) are male-dominated and want to keep it that way.
    This is the same argument made 30 years ago about women not earning as much because they weren't going to law and medical school. (Or blacks 40 years ago.) It's not because they didn't want to go into those fields...it's because those fields didn't want them.

    I'm not saying the other points about the pay discrepancy are wrong; merely that this one is inconclusive.

  • ||

    Ridiculous unsubstantiated b.s.

    Women don't go into engineering and math as much as men due to a lack of interest and/or aptitude not due to discrimination. Anybody who has been on the planet for a few decades and known enough people of both genders can tell you this. Larry Summers, as the President of Harvard, commented accurately on the lack of qualified top female mathematicians and was canned for telling the truth.

    This politically correct b.s. is f'ing obscene.

    Women and men are not the same.

    Period.

  • ||

    Now, just stop all the nonsensical excuses! Middle-aged white men discriminate against women in pay, perks, office spaces ... everything! There! Done. Now excuse me, I have just found a new ethnic group and must decide whether to simply oppress them for seven or eight centuries - after first forcing Christianity upon them - or just outright enslave them all. Later.

  • DLM||

    I'd go straight to enslavement. They'll view anything else as a step up after that.

  • ||

    Surprisingly, nobody mentioned the biggest factor: welfare and "child" support. When men have children, they have to earn a living to support them. When women have children, the children often ARE the source of support!

    (OK, granted, it wasn't mentioned directly.)

    Feminists griping that women earn less on a dollar than "similar" men is like Marie Antoinette griping that peasants are enjoying more exercise in the fields... It's astonishing hyper chivalrous entitlement!

    The notion of feminine "oppression" can only exist in a culture of virgin-Mary worshipping momma's boys bending over backwards to please them. Truly oppressed groups don't have hourly updates in the media about how oppressed they are.

    Anyways, the greatest oppression for modern women is... true equality. Back in the 90's, it was hilarious that career women flirted briefly with buying their own diamond rings when "traditional, but modern" guys didn't show up to buy them for her while complimenting her on all the money she made (for herself, of course.)

    A woman flashing diamonds she bought for herself is like a man bragging about staying home alone watching adult PPV...

    Next, as the supply of patriarchal breadwinners dried up and women had a choice of real equality or, who are we kidding? Most never will choose real equality. So there is a small subset of women unable to find a stupid guy to get them preggo in a one night stand and need to, get this, pay for sperm. The new movie, Switch, features the rejected Jennifer Anniston (ideal pick!) to portray an aging middle class woman who gets an anonymous sperm donor to knock her up and she pays for the kid all by herself.

    Doesn't that sound fun?

    Yeah, exactly.

  • ||

    My sister worked in a chain restaurant, where she and 2 other women did the work that usually would be done by 4 or 5 people. The stupid manager hired a man who got in the way, and even worse, paid him more. These women didn't need government to fix things. They marched into the manager's office and asked why he got paid substantially more.

    Manager: "I couldn't insult him. A man wouldn't take the job for that amount."
    My sister: "So it's OK to insult us, just because we don't have a pecker? I want the pecker differential. I'll strap one on."

    After adding that all 3 would walk, before lunch rush, and have a job within hours at any of the restaurants nearby, their pay was lifted to the same level.

    Women frequently get lower pay because we don't ask for it. I know that I've been naive that way, as I heard a boss say "I had to pay him more. I couldn't insult him." about a new hire who took my former job. The other MEN with far more experience and far more responsibility who were not paid adequately more were equally steamed. We fumed instead of taking action, which is our own fault.

    Women often choose to work places that pay less because these workplaces have other traits we prefer, such as flexibility or a pleasant work environment.

    We women can improve our lot by taking ourselves and our pay more seriously. If government steps in and demands equal pay, even if women do work fewer hours, then smart companies won't hire women, period. It's a very slippery slope.

  • ||

    Pegleg Kitty, the same applies for men as you observed. There are men who "steam" and just get paid less or are less aggressive about moving up the ladder.

    At the same time, amusingly, I have found that a lot of the times it's the butt-kissing men who aren't the best performers but know how to please their boss (and his boss) and then turn in their co-workers who get ahead. This observation belongs on Reason because libertarians like to claim how the free market is so efficient, blah blah blah, but corporate waste due to kickbacks and buddy deals happen all the time. Perhaps it just turns out that government is even more inefficient that this problem is not noticed and addressed.

    A feminist blustered that men shouldn't be angry at them for problems due to affirmative action because of "outsourcing" and evil corporations sending manufacturing jobs overseas. Of course, they fail to notice and admit that those jobs flew off because they weren't government and environmentalists didn't mind seeing them go. So places that hire women at an equal, or higher pay, tend to be government positions or filler jobs in corporations with comfortable niches such as Microsoft where people are willing to pay twice as much for the latest buggy release because EVERYONE uses it. Microsoft could put dog-doo in a box and pay 10 women $200K a year to package it and it would still sell.

  • ||

    Here's another issue besides children and occupation.
    Remember the gulf explosion and resulting oil spill? Now around 10-15 people died on the rig. Even without doing research on this, we all know the gender of all if them, right (ok, besides 1 or 2)? That's right, men. What's the most dangerous local government job? Not police, but sanitation workers. What percentage of them are women? Alaskan fishing boats, miners, construction, the list goes on. Men by far do the work the entails the greatest degree of death, injury, or early mortality. I don't how know to quantify the amount generally, but there is certainly an amount of extra compensation for taking on the risks. Perhaps one can explain this as discrimination to women entering such fields, but how many of you know of women pining to enter the sanitation workforce?

    It doesn't stop there. Beyond getting killed, there are quality of life issues. I once worked at Intel at a 24 hour manufacturing site. They had day and night shifts with about a 20% pay differential at night. I did a stint at night and remember quite well when stumbling bleary-eyed into the sunlight to come home, the 2000 worker site magically transformed from a 95:1 male at night to about 60:40 site during the day. Also Intel was and is heavily into "diversity" recruiting/promotion/retention, so there's none of the discrimination garbage going on, unless you mean AGAINST men. No, this was clearest first-hand proof that women by CHOICE turn down extra pay in exchange for lifestyle choices. Go into a cushy office environment, you see heels and makeup. Go to a place that's dangerous, unpleasant, smelly, or gives a tough lifestyle, then it's dominated by men. Women, if you make the trade-off, fine, but stop the whining. Can't have it both ways.

  • ||

    John G said (in part): " ... Women, if you make the trade-off, fine, but stop the whining." Problem is that most women are physically unable to perform the physically dangerous jobs men do. Besides that, women choose not to do the things men do to make more money: the hours, third shift work, multiple shifts, etc. Hell, some of them think they can get off work by claiming that their period came on - rather like the M.A.S.H. character whose grandmother died six times in one year, some of these girls think we can't remember from one week to the next and claim it two or three times a month - or that they're single parents and their kids are sick or need something. But, you see, that is the fault of men, as well!!

    Now, where was I? Oh, yes: enslave immediately or merely oppress for seven or eight centuries. Immediate gratification versus higher profits. I understand Jack Benny more and more.

  • bags||

    There are many uses for biological species (food, medicine, etc) so they obviously can be seen as a resource that is beneficial to mankind. We are fortunate to have such a biodiversity to mine for our uses, and future generations deserve that opportunity also. So to destroy species is a harm to future humans, and (IMO) should be strongly avoided.

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