We’ve all heard it.  “Women make 77 cents for every dollar a man does”.  Or 79 cents, or 80 cents; the meme changes slightly each year, but the implication remains.  Women are getting less for doing the same work, and thus we have “Equal Pay Day”, the symbolic day where women are finally done working for free in a rigged marketplace.  This meme is decades old, but has seemed to gain strength in recent years, as President Obama, and presidential candidates Hillary Clinton and Bernie Sanders have repeated it.

It’s a classic case of misleading with statistics, and a closer analysis exposes the gender pay gap myth.

Where Does the Statistic Come From?

The pay gap meme has changed to 80% in 2017.

The 80 cent number (as of 2017) comes from the US Census Bureau report, which averages the earnings of all full-time workers, and finds women earn about 80% of what men do (in previous years it was 77-79%).  In this respect, the stat is true, but as we’ll see it’s misleading and not for “the same work”.  The danger of repeating statistics with no context leads to a likelihood we jump to erroneous conclusions about the cause.  This is often the case with the gender pay gap, as its proponents claim discrimination as the source of the gap.  But what are the real reasons?

Hours Worked

Would you believe the 80% statistic doesn’t ask this simple question: do men and women work the same amount of hours?  It’s such an important and obvious question, but not one taken into account in the meme.  The Bureau of Labor Statistics (BLS) considers full-time employment to be 35 hours or more a week.  This means a lawyer who works 80 hours and a secretary working 35 hours are both counted as a full-time worker.  Clearly, we need a deeper examination.  It turns out there is a difference, and men tend to work longer hours.  According to the BLS, full-time male workers average 8.1 hours/day, while women average 7.3 hours.  (Chart shown below)

When this reality is acknowledged, the gap shrinks considerably.  Pew Research measured hourly wages instead of total earning, a better (but still not sufficient) methodology.  They found the wage gap to be 84 cents to the dollar, but there’s still much more to account for.

Overtime

Men tend to work more overtime, which often pays time-and-a-half.  An older BLS study found that men work twice the amount of overtime as women (15% vs. 7.5%).  More recent studies suggest this hasn’t changed much.

Time Off

UK and Finnish studies found that women average more sick days than men.

A 2013 Pew Research Study found several interesting differences between men and women in the workforce.

• 42% of mothers with work experience have reduced their work hours to care for children or family members compared to 28% of fathers.
• 39% of mothers took a significant time off work for family reasons compared to 24% of men.
• Mothers are 3 times as likely as fathers to quit a job for family reasons.
• Among working parents, mothers spent an average of 14.2 hours per week on housework, compared with fathers’ 8.6 hours, and 10.7 hours per week on child care, compared 7.2 hours for fathers.

On average, women are more willing to sacrifice or delay their careers for family needs.  Some may think this in itself is unfair or sexist, but Pew found that only 22% of working moms thought that a mother working full-time was ideal for young children, while 70% of adults think working full-time is ideal for fathers.  This means both men and women seem to value mothers spending more time with their children.

Whether these different preferences are healthy and a natural biological difference between the sexes, or a result of harmful “gender norms” is a separate question and irrelevant to the pay gap.  The fact remains there is a difference between the sexes in the current workforce, and it’s unfair to blame it on “discrimination” when employers are simply responding to the economic environment.  It’s obvious that workers who take less time off will be more rewarded.  This explains why there are small wage gaps in certain fields like pharmacy, where the penalty is lower for taking time off, while in business occupations the penalty is much larger, and so is the gap.  It also explains why the gender pay gap increases with age.

College Majors

Georgetown University compiled the list of the highest and lowest paid majors, and found men significantly outnumbered women in the highest paying fields, while women dominated the lower paying majors.

Highest Paying:

1. Petroleum Engineering- 87% male
2. Pharmaceutical Sciences and Administration- 52% female
3. Mathematics and Computer Science- 67% male
4. Aerospace Engineering- 88% male
5. Chemical Engineering- 72% male

Lowest Paying:

1. Counseling Psychology- 74% female
2. Early Childhood Education- 97% female
3. Theology and Religious Vocations- 66% male
4. Human Services and Community Organization- 81% female
5. Social Work- 88% female

The difference in pay is dramatic with different majors.  Social Workers average about $45,000/year, while petroleum engineers average $130,000.  Less than 1/5th of all engineering graduates are women, which means many of the higher paying fields are taken by men.  Some blame this on societal factors, like stereotyping and lack of role models, which may or may not be true. For instance, this doesn’t explain why women now dominate certain science areas like veterinary science and biology despite most of the senior faculty being male.  Unlike years past, where women were definitely discriminated against in the sciences, there are no overt barriers anymore.  In fact, there are many programs and initiatives to encourage women into the so-called STEM fields.

It might simply be that men and women might have different preferences for subjects when left free to choose.  Regardless, one can’t fault companies for not hiring women engineers who don’t exist, or paying market wages for different occupations.

Within the Same Profession

One has to ask, if they’re really cheaper, why do greedy corporations hire men at all?

Some gender gap proponents look a little deeper, and claim that even within the same profession women make less.  For instance, the claim that women doctors make 71% of men.  However, this also fails to take into account different choices by the sexes.  Women tend to be more involved in lower paying fields like pediatrics (75%) and family medicine (57%), while men specialize more in the higher paying fields like surgery (59%), anesthesiology (63%) and radiology (73%).  Women doctors also take more time off, as they do in every field.  This is not a criticism, just acknowledging the reality that women tend to sacrifice time at work for time with family.

The best example comes from the popular Glassdoor study, which is often touted in the debate.  They found female pilots made just 84 cents on the dollar.  Aviation is a highly unionized field, where almost all airlines have uniform pay scales and seniority-based (not merit-based) promotions.  In other words, once hired, there is little a pilot can do to get ahead of other pilots at the same company.  Schedules, type of aircraft, captain/first officer, etc. are all based on a seniority-based bidding system.  This means the 16% pay gap is likely due to different choices, not discrimination.  Perhaps women pilots prefer to work less, pick up less overtime, or wait longer to upgrade to captain on average, in exchange for a better schedule.

Different Goals

A Meredith College study that compared female and male valedictorians discovered differences in career goals from even the highest high school achievers.  The careers female valedictorians desired averaged $74,608/year compared to $97,734 for males.  Before they even entered the workforce, the “gender gap” was 76%!  In response to why women picked less lucrative career goals, professor Anne York who conducted the study stated, “The typical reason is that they are worried about combining family and career one day in the future.”

A survey of MBA applicants also found different motivations for men and women in their business careers.

“Men acquiring an MBA aspire to become President or CEO of both public and private companies or to start their own businesses. Women MBAs, however, ranked management consulting, executive level vice-President positions and non-profit executive management high among their career goals.”

The “Real” Gender Pay Gap

If you believe the US gender gap, does that mean Canada and France are even more sexist?

As we’ve seen, there are many variables that go into the gender pay gap, some that would be almost impossible to measure with statistics.  But that doesn’t stop economists from trying!

Even the American Association of University Women (AAUW), an organization biased towards the pay gap, found that the gap among college graduates was 7% when factoring in different choices the sexes make.  After a decade, they claim this increases to 12%.

Other economists find different gaps.  CONSAD prepared a report for the US Department of Labor that put the gap at 5% when the other factors were considered.  This seems to be in line with other estimates in the field (5-8% seems to be common) while virtually no economists take the 79% number in the meme seriously.  So, what’s responsible for the 5% gap?  It’s impossible to say for sure.  There are still other notable differences between the sexes unaccounted for, like women aren’t as effective at pay negotiation, and are likely to ask for fewer and smaller raises.  There’s also the possibility of real discrimination and irrational bias against women in the workplace.

What’s clear, is that the 79 cents on the dollar scare tactic is misleading, and the notion that women spend over 3 months working for free is ridiculous, and a mindset that hinders success.  When given the “real gap”, most people would not be persuaded that there’s a crisis needing government intervention.  Furthermore, the types of laws intended to help could end up hurting not only men, but women too.  Imagine every employer being in fear of a lawsuit if their payroll didn’t “add up”!  They would likely take measures that would be destructive, cause resentment, and even hurt women.  For example, employers would be less likely to give women flexible schedules, time off and reduced hours if this would count against “their number”.  They would be tepid in hiring less qualified, or less credentialed women, as they might drag down their “average”.  Would this really help women?

Other “Gaps”

To see how statistics can be used to trump up all sorts of inequalities, here are some examples.

• The “Young Gap”– Women under 30 without children make 8% more than their male counterparts.  20% more in Atlanta and Memphis, 17% in New York and 12% in Los Angeles.
• The “Death Gap”– Men are 11 times more likely to be killed at work, making up 92% of fatal workplace injuries.
• The “College Gap”– Women receive 57% of bachelor’s degrees, and 60% of master’s degrees.
• The “Part-time Gap”– Women make about 5% more than men in part-time employment.
• The “Lesbian Gap”– Lesbian women make 9% more than straight women.
• The “Asian Gap”– Asian Americans earn more than any race, including white Americans
• The “Japanese Gap”– Japanese Americans earn more than other Asians.
• The “Tax Gap”– Men pay more taxes, and receive less benefits.
• The “Prison Gap”– Men are 9 times as likely to be incarcerated.
• The “Sentencing Gap”– Men receive 63% longer sentences than women for the same crime, and women are twice as likely to avoid prison if convicted.

There are rational explanations for each of these gaps not involving malicious discrimination.  Asking for the government to meddle in attempt to “fix” these gaps would likely be ineffective and counterproductive, not to mention unjust.

White House Pay Gap?

The gender pay gap was found even in the Obama White House, where women staffers earned only 88% of men.  Is the same White House who is so focused on the gender pay gap really sexist and discriminating against women?  Or, could it be explained more accurately, as press secretary Jay Carney was forced to admit:

“…when you look at the aggregate — and this includes everybody from the most senior levels to the lowest levels — you’re averaging all salaries together, which means including the lowest-level salaries, which may or may not be, depending on the institution, filled by more women than men.”

Indeed.