The Independent Institute

 
        

The Gender Wage Gap—A Myth that Just Won’t Die



gender wageThis past year I was on the academic job market, applying for faculty positions at a variety of colleges and universities. As a woman making a critical career move, I’ve been up to my eyeballs in cover letters, resumes, statistics about cost of living, state income taxes, health insurance, and, of course, salary information.

Chances are you’ve heard the statistic on numerous occasions, “women earn 77 cents for every dollar a man earns—for exactly the same work.” I certainly heard this several times throughout my job search in various contexts. This issue of the supposed “gender wage gap” came up again recently during the 2015 Oscars when actress Patricia Arquette used the platform to call for wage equality stating,

To every woman who gave birth, to every taxpayer and citizen of this nation, we have fought for everybody else’s equal rights. It’s time to have wage equality once and for all. And equal rights for women in the United States of America.

Social media exploded. Bloggers, politicians, and others applauded Arquette for her statements. The familiar and rallying cry of “equal pay for equal work” was everywhere. While few would disagree with the sentiment that men and women should receive the same compensation for the same services, the position espoused by Arquette and others that women are systematically underpaid is just plain wrong. Of the many economic-related fallacies to be cited as gospel on a regular basis, this one drives me positively insane.

Let’s take a look a closer look at this statistic.

The first thing to notice is that the “77 cents on the dollar” metric isn’t comparing apples to apples. It is a comparison of gross income. That is, it compares the income of all women to that of all men. It fails to take into account important factors—like education, experience, or even just comparing people in the same career. You wouldn’t compare the incomes of elementary school teachers with Bachelor’s degrees to those of individuals with PhDs in physics and complain that there is a “teacher-physicist wage gap”—but this is precisely what this statistic does.

When you take these characteristics into account, the purported “gap” all but disappears.

One important variable to consider is the type of careers men and women select. Simply put, men and women tend to choose different jobs. Looking at data from 2010 on undergraduate majors in the U.S., one sees certain fields are heavily dominated by men and vice versa.

Consumer and human science majors, for example, are about 88 percent female. Eighty-seven percent of library science majors are women. Women also heavily dominate healthcare majors and educational fields, with females representing 80 percent or more of these majors.

By contrast, other disciplines are largely populated by men. Males comprise some 96 percent of military and applied science majors. Eighty-three percent of engineering students are men. Eighty-two percent of computer science majors are male, as are 70 percent of economics majors.

In addition to selecting different jobs, women and men also differ in the number of hours they choose to work. Men are much more likely to work full-time hours or more a week (40+ hours). Women are much more likely to work part-time (less than 35 hours per week). Not surprisingly, people who work part-time jobs tend to earn less than people who work full-time jobs.

(Note: women actually tend to earn more than men with the same part-time jobs.)

When women do find themselves in male-dominant fields, they actually tend to do better than their male counterparts in terms of finding a job. Take, for example, academic jobs. One study from 2010 looked specifically at applications for tenure-track jobs in electrical engineering and physics. They found that while women comprised only 11 percent of engineering applicants and 12 percent of physics applicants, they were much more likely to receive job offers. In fact, the study found that 32 and 20 percent of job offers went to female candidates in engineering and physics, respectively.

The gender wage gap falls completely apart if one thinks of it from the perspective of an employer. Suppose you own an accounting firm. Further suppose that the gender wage gap is real—women and men do the exact same work, but you can pay the women in your firm 77 cents for every $1 you pay your male employees.

You need to hire five new accountants. What are your options?

A. You can hire male CPAs at a price of $50,000 each, per year ($250,000 per year for all five),

Or

B. You can hire female CPAs at a price of $38,500 each (77% of the male wage), per year ($192,500 per year for all five).

What would you do? Hire the women, of course! In fact, you’d be foolish to hire any men at all! You’d get the same work from either group of employees, but by hiring women you’d save $57,500 every year.

The same goes for other businesses. If men and women were truly providing “equal work,” but women were systematically paid less than their male counterparts, entrepreneurial business leaders could make a killing hiring women. The fact that we don’t observe this is yet another indication that the statistic is seriously flawed.

Now, some will point to the statistics on the careers men and women tend to choose and say that women aren’t really “free” to choose their careers. This is not only incredibly patronizing, but it ignores the fact that women in the U.S. are not only well-educated, but also well-informed when it comes to selecting careers. It’s not as if women are unaware that social workers and schoolteachers tend to earn less than engineers. We choose careers just as men do. We consider what we think is most important when selecting a career, look at our options, and make the best choices we can.

When it comes to issues of gender equality, there are a variety of issues to discuss. When having these discussions, however, it’s important for women and men to discuss the facts and present correct information. Otherwise, we not only perpetuate incorrect information, but we ultimately fail to advance these issues in any meaningful way.

Enjoy The Beacon? Help us inspire ideas on liberty with a tax-deductible contribution!
Comments
We invite your civil and thoughtful comments. The use of profanity or derogatory language may result in a ban on your ability to comment again in the future.

  • MyGovCost.org
  • FDAReview.org
  • OnPower.org
  • elindependent.org