The Economist reports on an interesting new study undertaken on differences in gender pay:
According to data for 8.7m employees worldwide gathered by Korn Ferry, a consultancy, women in Britain make just 1% less than men who have the same function and level at the same employer. In most European countries, the discrepancy is similarly small. These numbers do not show that the labour market is free of sex discrimination. However, they do suggest that the main problem today is not unequal pay for equal work, but whatever it is that leads women to be in lower‐ranking jobs at lower‐paying organisations.
The figures for Britain in the study break down as follows. The “raw” gender pay gap between all men and women is 28.6 percent. This falls to 9.3 percent once one controls for people being in the same level job. This falls further to 2.6 percent for the same level job at the same company, and to just 0.8 percent for the same level job at the same company with the same function. In other words, as free market economists have long explained, there is little to no evidence of overt company discrimination once one controls for observable factors (and beyond those here, things such as educational attainment, or years of continuous work experience).
Confronted with studies such as these, some commentators, and even some libertarians, pivot. They suggest that this kind of research attacks a straw man. Few people think it’s overt wage discrimination at an employer level that’s the problem, they say. The aggregate statistics though, which show women on average earn 82 percent of men’s median hourly earnings, are said to reflect other types of structural societal discrimination – in the subjects that young women are encouraged to study, hiring processes at firms, the nature of wage negotiation and much else besides.
The starting point that we would expect an aggregated pay gap of zero even in a world in which no overt or covert societal pressures exist is questionable. When free to choose, it’s unlikely gendered populations will make equal choices. And to the extent these commentators are right, it is unclear what the policy implications should be.
Nevertheless, most evidence suggests this is explicitly not what the public hear when they see talk about the gender pay gap. A recent YouGov survey in the U.K. asked the public what they thought when they heard of the term. Just 30 percent said that they thought it was about women, on aggregate, being paid less than men. A whopping 64 percent thought that it was about women being paid less than men for the same job. To be clear: the latter is not what the commonly cited aggregated statistics on the gender pay gap are about.
Politicians appear to misunderstand this too, and it leads to bad policy. After all, in developed countries one policy that they have pushed for is company‐level disclosures– something that makes little sense if you are worried about society level structural problems.
It’s little surprise that the public interpret the term in this way then. Though in pure language terms both definitions might be acceptable, pay gap stories of the aggregate variety reported in the media regularly include irresponsible lines implying discrimination, such as “from this day onward, women work for free” or describe companies that have the largest gaps as “the worst offenders.”
In this environment of misinformation, it is important and worthwhile to continuously highlight what the pay gap shows, and what it doesn’t. The structuralists might have a point about broader drivers, but it’s not one helped by a raw measure that is used misleadingly and to advance policy positions which do not make sense according to the structuralist concern.
Read more on the gender pay gap here, here, and here.
Two experiments in a new working paper find some evidence that some drivers using popular ride-hailing platforms discriminate against riders. In some cases African-American riders faced longer wait times or higher probabilities of having a driver cancel on them. To some extent, these findings should temper hopes that these new technologies and platforms would succeed in quickly rooting out these forms of discrimination. It is important to note, however, that this study examined whether there was discrimination within these platforms, it did not compare ride-hailing platforms and traditional taxi companies. These new platforms do offer some advantages over the status quo when it comes to identifying the channels of discrimination through richer data, while the rating system gives riders some recourse to penalize discriminating drivers and an incentive for drivers to maintain a high rating.
In the study the researchers undertook two large-scale experiments to try to determine whether there was a pattern of discrimination for riders using these ride-hailing platforms.
If federal statutory law expressly commands that all covered federal employees shall be “free from any discrimination based on … race,” does that forbid the federal government from adopting race-based affirmative action plans? That is one of the important—and seemingly obvious—questions posed by Shea v. Kerry, a case brought by our friends at the Pacific Legal Foundation. William Shea is a white State Department Foreign Service Officer. In 1990, he applied for his Foreign Service Officer position and began working in 1992 at a junior-level post. At the time, the State Department operated a voluntary affirmative action plan (read: voluntary as “mandated by Congress”) whereby minorities were able to bypass the junior levels and enter the mid-level service. The State Department attempted to justify its racial plan by noting that there were statistical imbalances at the senior Foreign Service levels, even though the path to the senior levels is unrelated to service at the lower levels.
In 2001, Shea filed an administrative complaint against the State Department for its disparate treatment of white applicants under its 1990-92 hiring plan, complaining that he did not enter at as high a grade as he may have and that the discrimination cost him in both advancement opportunities and earnings. After exhausting administrative remedies, Shea took his complaint to the courts, resulting in this case. The Cato Institute has joined with the Southeastern Legal Foundation, the Center for Equal Opportunity, and the National Association of Scholars to file an amici curiae brief calling for the Supreme Court to take up the case and reverse the federal appellate court below.
In fairness to the court below, Title VII jurisprudence, as it stands, is both unclear and unworkable. The text of Title VII expressly prohibits discrimination on the basis of race—what’s called “disparate treatment.” Indeed, in the specific provisions on federal hiring, Title VII employs very expansive language to ensure that disparate treatment is not permitted. But such a “literal construction” of the Title VII statute was eschewed by Justice William Brennan in 1979, writing for the Court in United Steelworkers v. Weber. Relying on cherry-picked statutory history, Brennan found that Title VII’s plain text did not prohibit collectively bargained, voluntary affirmative action programs that attempt to remedy disparate impact—statistical imbalances in the racial composition of employment groups—even if such plans used quota systems. Later, in Johnson v. Transportation Agency, Santa Clara County, Cal. (1987), the Court exacerbated the issue by extending the Weber rule from purely private hiring to municipal hiring. In Shea, the U.S. Court of Appeals for the D.C. Circuit extended the rule from Johnson and Weber to federal hiring, not just municipal and private employment.
After the Supreme Court blocked Hawaii’s race‐based election pending appeal, its organizers—a government contractor named Na’i Aupuni—canceled it and decided instead to seat all the candidates as delegates to a special constitutional convention for the purported new nation of “native Hawaiians.” The plaintiffs have asked the Supreme Court to find the election/convention organizers in contempt of its earlier order. Meanwhile, the appeal of the district court’s earlier denial of an injunction proceeds in the U.S. Court of Appeals for the Ninth Circuit. Cato has joined the American Civil Rights Union on a brief supporting the challengers. We point out that this is the second time that Hawaii has attempted to conduct a discriminatory voter‐registration procedure to facilitate a racially exclusionary election. The first time this occurred, the Supreme Court held that such elections violate the Constitution. Rice v. Cayetano (2000). Things are no different this time. The voter qualification requirements here again make eligibility contingent on ancestry and bloodlines, which are nothing more than proxies for race. (There’s a further requirement that voters affirm a belief in the “unrelinquished sovereignty of the Native Hawaiian people,” which is an ahistorical assertion.) Such a discriminatory scheme is per se unconstitutional under the Fifteenth Amendment.
The scouts are fully within their rights to maintain that exclusive policy—private groups should be able to discriminate on whatever basis they wish—but it’s a shame that many Americans associate scouting with that constitutionally protected policy instead of the organization’s valuable core mission of providing a unique space where boys can grow and develop into honorable men.
The editors thus changed the title of my piece to “Free to Discriminate,” which is only one part of what I said, but in any event should get more people to click on my piece in anger. Read the whole thing.
At Compensation Cafe, Stephanie Thomas explores some of the “nonsensical implications” of a misnamed bill that’s a high Obama administration priority in the lame duck session:
Let’s assume that John and Jane have identical characteristics (education, work experience, etc.) except for gender. ABC Company makes offers of employment to John and Jane on the same day, for the same position, for the same starting salary: $45,000. Jane accepts the offer, but John negotiates the salary, and ends up with $50,000. Under the current equal pay laws, there’s no problem; John is earning more because he negotiated and Jane did not. Makes sense, right? Under the Paycheck Fairness Act, ABC Company would be guilty of gender discrimination.
Here’s another example. Assume that Sam and Sally have the same education, work experience, etc., and are both hired by WidgetCo on the same day. WidgetCo sets Sam and Sally’s starting salary at $2,500 more than they were making at their previous job. Sam was earning $37,500 at his previous job, and Sally was earning $36,000; their starting salaries at WidgetCo are $40,000 and $38,500. Seems reasonable, doesn’t it? Under the Paycheck Fairness Act, WidgetCo would be guilty of gender discrimination.
One final example. Assume that Brad and Bridget both work for Alpha Inc., have the same job title, same level of responsibility, etc., and they are both earning $100,000 per year. Brad asks for a 5% raise, but Bridget doesn’t ask for a raise. Brad gets the raise and ends up earning more than Bridget. Again, no problems here, right? Wrong — under the Paycheck Fairness Act, Alpha Inc. would be guilty of gender discrimination.
“Making matters worse, under the new law, damage awards would be uncapped, and class‐action procedures loosened. Bring on the trial lawyers,” notes a Chicago Tribune editorial. For more on this very bad bill, check out the papers and presentations from a panel last week put on by our friends at the Hudson Institute. Earlier here and, at Overlawyered, here, here, etc.
Some leaders within the Republican Party seem to have fixed on a useful club with which to bludgeon the president and his fellow Democrats -- Cordoba House, aka the "Ground Zero" Mosque. Over the weekend, Republican strategist Ed Rollins explained how the party would use the issue in the coming months:
ROLLINS: Intellectually, the president may be right, but this is an emotional issue, and people who lost kids, brothers, sisters, fathers, what have you, do not want that mosque in New York, and it's going to be a big, big issue for Democrats across this country.
"Face the Nation" Host Bob SCHIEFFER: So you see it as an issue that's going to continue?
ROLLINS: Absolutely. No question about it. Every candidate -- every candidate who's in the challenge districts are going to be asked, how do you feel about building the mosque on the Ground Zero sites?
This strategy, exploiting still-raw emotion and implicitly demonizing Muslims, threatens to trade short-term political gain for medium-term political harm to the party. And it most certainly will translate into long-term harm for the country at large.
Opposing the construction of a mosque near the Ground Zero site plays into al Qaeda's narrative that the United States is engaged in a war with Islam, that bin Laden and his tiny band of followers represent something more than a pitiful group of murderers and thugs, and that all American Muslims are an incipient Fifth Column that must be either converted to Christianity or driven out of the country, else they will undermine American society from within.
It isn't a political slam-dunk, either. Though 64 percent of Americans think a mosque near Ground Zero is "inappropriate", 60 percent of all respondents in the same survey, including 57 percent of Republicans, believe that the organizers have a right to build in that location, and presumably would not favor a government prohibition on this activity. (h/t Nate Silver at fivethirtyeight) If anyone were to show evidence that the parties building the center were in any way linked to the 9/11 terrorists, or funded by or funding these same terrorists, then the issues at stake would change. But they haven’t done so, and are unlikely to do so. In the meantime, those GOP leaders who oppose the mosque betray a basic inability to discern public attitudes, even as they propel this country on a ruinous course, headlong into a civilizational war which pits all Americans against all Muslims.