The Gender Wage Gap Is Real, Complicated and a Problem

What's This?

Image: Mashable composite. iStock, id-work

Bryce Covert for The New Republic 2014-04-30 16:30:25 UTC

TNR-Logo-Main

Conservatives were not at all happy when President Obama issued executive orders to close the gender pay gap earlier this month. And they were particularly angry that Obama justified the change by arguing, famously, “[T]he average full-time working woman earns just $0.77 for every dollar a man earns.”

The figure, according to conservatives, is bunk. And to make their point, they cited an unpredictable source: Claudia Goldin a highly respected Harvard economist whose research on inequalities facing women in the economy has been widely cited by feminist causes. Here, for example, was Kay Hymowitz, from the right-leaning Manhattan Institute, during an appearance on MSNBC’s “All In with Chris Hayes”:

…we hear all the time, we just heard from the president recently that women only make $0.77 on the dollar. Well, those are raw numbers. Its gross averages that don't take into account hours worked. They don't take into account professions and occupations. And when you take all that into accounted and time offing [sic] for having children, absolutely — then the numbers look very similar. And there's a recent paper that was just released by Claudia Golden at Harvard basically saying, yes, we have achieved a kind of parity.

But while Goldin's research says many things, it doesn't say the wage gap is phony. Just ask Goldin herself.

In her research, Goldin found that the wage gap differs over a woman’s lifetime and increases with age. And the biggest reason is a lack of flexibility when it comes to working hours. “The gender gap in pay would be considerably reduced and might even vanish if firms did not have an incentive to disproportionately reward individuals who worked long hours and who worked particular hours,” Goldin writes. If firms could offer workers more options for how much to work and when to work, she thinks, the wage gap between men and women who work the same hours would nearly disappear.

So what does Goldin think of the $0.77 figure? “It’s an accurate statement of what it is,” she said. She compared it to a thermometer: it gives you a reading of the temperature, although it won’t tell you if the weather is going to change or if it’s an abnormal day. In the same way, $0.77 does in fact measure the difference in earnings between all men and women who work full-time, year-round at the median, although it doesn’t reveal all the relevant information — and might obscure some very important details.

There's room for honest disagreement over the precise role that different factors play in causing the gender gap. But, Goldin says, discrimination is clearly part of the story. "There's no question that there is" discrimination, she said. “We see incredible evidence of it in court cases that reach the front pages.” One such case made news just last month, when 16 women filed a class action lawsuit against Sterling Jewelers, which owns Jared and Kay. The suit alleges, among other things, that women were routinely paid less than similar or less qualified men and denied promotions that would have increased their pay. (The suit also alleges severe instances of sexual harassment, some perpetrated on the very women being paid less.)

There’s also research that points to discrimination as a factor in that 23% difference between men’s and women’s earnings. When economists examine the gap and control for all measurable factors, there remains a residual portion they can’t explain. For the Government Accountability Office, that portion was 20%. For economists Francine Blau and Lawrence Kahn, it was 41%. It’s in this unexplainable portion where discrimination may be leaving its mark.

One other reason conservative analysts are misusing Goldin’s paper is that they miss one of its key nuances: Her research focused on a particular subset of people, not the entire country. “It specifically says that I’m only looking at…individuals with incomes greater than $60,000 a year,” she told The New Republic. Part of this is because she has found that “the gender gap is larger in high-income jobs,” she said, “and the gender gap within jobs is phenomenally more important” than the differences between men and women who work in different jobs.

But the gender gap in lower-paying jobs is still very real. Maids make $19,570 a year at the median, for example, while janitors make $22,590. Generally speaking, low-skill jobs that are 75% or more female pay nearly $150 less a week than those dominated by men. It’s worse for high-skill jobs, where women’s fields pay $471 less. On the other hand, men make more when they buck societal expectations and take jobs in these areas. Women are also nearly two-thirds of the country’s minimum wage workers. All of these factors contribute to an earnings gap, and they aren’t all about women’s choices. They’re about how society values work when women do it and what kind of jobs are available to them.

Goldin’s emphasis on the relationship between more flexible working hours and lower wage gaps can fix the gap at the hourly level. It would allow women who put in the same hours as men — no matter when they put them in — to earn the same rate. Of course, flexibility probably wouldn’t have a big impact on the annual wage gap, which reflects the fact that women are much more likely than men to have to interrupt or completely pause their careers to care for children. “You work less, you get less,” she noted. But that doesn’t mean the government is powerless to reduce the annual wage gap. Initiatives like affordable child care and paid family leave can make it easier for caregivers — who, even now, are predominantly women — to pick up the kids from school or take time off for a new baby. It might also encourage more men to do the same things. “There’s no question that they’re complementary,” she said.

As for the solutions that President Obama and Democrats have suggested, there’s no reason they can’t coexist with Goldin’s findings. Obama’s executive order is aimed at increasing wage transparency, as is the Paycheck Fairness Act. And the wage gaps are smaller — and shrinking — in places where information on salaries is widely available, like the federal government or unionized jobs. Simply giving women more information about their pay so that they can address discrimination if and when it does happen is one small piece of the gender wage gap puzzle.