Economics

Four Things You Don’t Know About the Gender Pay Gap


Tomorrow is National Equal Pay Day. Here’s why it’s even more crucial than you think.



You’ve heard it before: American women make about 78 cents to a man’s dollar, a figure that has barely budged over the last decade. (Cue the face palm.) But that one statistic, bitterly depressing though it is, doesn’t tell the full story of the gender wage gap.

Tomorrow is Equal Pay Day (April 14)—a day chosen to symbolize how long into the new year women have to work to make the same income that men made in the last one. Here are four facts worth knowing.

1. Nope, sorry, the wage gap is not thisclose to extinction.

Every year around this time, a spate of articles (about half of which are authored by Christina Hoff Sommers) proclaim that the gender pay gap is dead, or a myth, or some sort of feminist conspiracy. They say it only reflects the fact that women work fewer hours than men, and sign up for poorly paying jobs. They call the figure of 78 cents “famously false” or “massively discredited.”

The critics are right about one thing: The figure of 78 cents doesn’t tell the whole story. It only reflects the full-time annual median earnings of male and female workers. (If you opt to compare men and women’s median weekly earnings, as the Institute for Women’s Policy Research (IWPR) has done, the pay gap is about 18 cents instead of 22 cents. There, feel better?) “We use [the statistic] because it’s such a long-standing measure. It allows us to look back and see where we’ve been, historically, and how much progress we have made,” says Catherine Hill, vice-president for research for the American Association of University Women (AAUW).

However, and this is important: Just because “78 cents” alone doesn’t convey every nuance of the pay gap issue doesn’t mean there is no pay gap. “There are always people saying it doesn’t exist,” says Katherine Gallagher Robbins, the director of research and policy analysis for the National Women’s Law Center (NWLC). “But even when you control for a lot of factors—education, if you have kids, whether you’re in a union, and so on—there is still a wage gap.” In fact, Hill says, the AUUW did a study in which women and men were surveyed one year after graduating college—no matter their major, chosen occupation, specific university, or other demographic differences—guess what? Women still made less than men, albeit by a smaller percentage.

Critics often cite statistics showing a smaller wage gap between young women and men as a sign that the disparity is going away. But Hill says that younger women have always had a smaller pay gap with younger men. “They’re generally making minimum wage so the gap is not that meaningful, but it still gets wider in their prime earning years.”

There are also deep flaws with the argument that, if women only chose better-paying professions, the wage gap would go away. Some of the most highly compensated lines of work—think: physicians and financial advisors—actually have the largest gender wage gaps, says Ariane Hegewisch, study director at the Institute for Women’s Policy Research (IWPR). For example, female financial advisors make less than 70 percent of what their male peers so. Is some of that gap due to lifestyle choice? Probably. But some is also due to the fact that women still do the brunt of child care and housework; and some is due to men in the financial industry systematically steering top-tier clients to their male peers. If you want to ruin your day, spend some quality time with this U.S. Bureau of Labor Statistics chart, which shows a grand total of two occupations where women made the same or more than men in median weekly earnings last year: Health practitioner support technologists/technicians, and stock clerks/order fillers.

So yes, the pay gap is complicated. It’s also real.

2. The wage gap among women of color is a national outrage.

The pontificators who are so sure that there’s no gender pay gap don’t spend much time talking about the yawning chasm between the earnings of women of color and their white peers, particularly white men. That’s probably because it’s a total horror show.         

In 2013, African-American women earned 64 percent of what White men made (that’s a drop, by the way, from making 69 percent in 2011). American Indian or Alaskan Native women made 59 percent. Latina women fared even worse, making just 54 percent. (Only Asian-American women did better than the overall average, making 79 cents to a man’s dollar.)

Some of this difference can be explained by access to education; African-American women, for example, have lower high school and college graduation rates than their white counterparts. However, noted the AAUW in a 2014 paper, “many women of color tend to be paid less than their White peers even when they have the same educational background … A possible explanation is discrimination, whether overt or implicit.”

3. You’ll pay for becoming a mother.

Being a mother is costly on so many levels: The financial toll of diapers, the insane price of day care, the Sisyphean task of saving for college. Now, add insult to injury: According to a study by the think tank Third Way, there is a 4 percent wage penalty per child for middle- and lower-income women. That translates into an average annual loss of $1,200. (As in all things, high earners barely get dinged.)

Amazingly, men with children get an income boost—they make 6 percent more than non-fathers, even when controlling for other variables.          

4. Lesbians are doing it right.

Most historically disenfranchised groups in the U.S. make less. And as infuriating as that is, it’s not too surprising. But here’s a demographic that has bucked this unsavory trend: A 2014 Ruskin University study found that American lesbians pull in in about 20 percent more in income than straight women. Why? Robbins surmises that “women in different-sex couples may be more likely to take lower-paying jobs; they’re more accustomed to traditional gender roles, whereas same-sex couples may have different expectations, and a more egalitarian partnership.”

 

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