Tag: gender pay inequality

What the Data Say About Equal Pay Day

This week saw the passing of “Equal Pay Day,” which marks the culmination of the roughly three extra months that an average female employee had to work in 2019 to match the amount of money made by an average male worker in 2018. Many people see the pay gap as unjust, but is it really a result of rampant sexism in the workplace as the critics allege?

A survey unveiled on Tuesday by CNBC and Survey Monkey suggests that, actually, both men and women are equally pleased with their employment situations and the earnings gap can largely be explained by women being more likely on average to choose part-time work.

“Men have a Workplace Happiness Index score of 72 and women a score of 70, close enough to lack a statistically meaningful difference,” according to the newly released data. That fits with earlier polling that was conducted by Cato’s Dr. Emily Ekins, which found that in the United States, the vast majority of women “believe their own employers treat men and women equally.” Fully 86 percent of women polled believed that their employer pays women equally.

There is still a pay gap between men and women who work full-time, but that may be partly due to men and women opting to work in different fields. Dangerous jobs in fields like mining and fishing, for example, tend to attract men. Those jobs also tend to be relatively well-remunerated. (As HumanProgress.org advisory board member Mark Perry points out, the gender gap in workplace deaths far exceeds the gap in pay).

Even so, among full-time workers, the “pay gap” is rapidly narrowing. Data from the OECD shows that the gender wage gap in median earnings of full-time employees is declining in practically all countries for which there are data. In the United States, highlighted in blue in the graph below, the wage gap has fallen dramatically since the 1970s. In 1975, the U.S. gender wage gap was 38 percent. By 2015, it had shrunk to 18 percent.

That 18 percentage point difference does not take into account important characteristics like “age, education, years of experience, job title, employer, and location,” according to my Cato colleague Vanessa Calder. A recent study, which controlled for those characteristics, concluded that the U.S. gender pay gap is only around five percent, meaning that Equal Pay Day should actually be in January.

Of course, if any of that small remaining five percent gap is the result of sexist discrimination—rather than additional mitigating factors that the study failed to control for—then that is unacceptable. We should denounce all forms of inequitable treatment, wherever it persists. We should also take a clear-eyed view of the data and recognize the remarkable gains women have made in the workplace—and how labor market participation has transformed women’s lives for the better.

Five Graphs Celebrating Women’s Progress

Harriet Tubman’s forthcoming placement on the U.S. twenty dollar bill is being hailed as a symbolic win for women. Tubman certainly deserves the honor, and Cato’s Doug Bandow called for putting Tubman on “the twenty” a year ago. In celebration of the soon-to-be-redesigned twenty dollar bill, here are 5 graphs showcasing the incredible progress that women have made in the realms of work, education, health, etc.

1. The gender wage gap, which is largely the result of divergent career choices between men and women rather than overt sexism, is narrowing in the United States and in other developed countries. Part of this trend may be explained by more women entering highly paid fields previously dominated by men. For example, there are more women inventors and researchers in developed countries.label 

2. Around the world, girls in their teens have fewer children and are more likely to complete secondary education. As a smaller share of teenaged girls become mothers, many are better able to pursue education. The gender gap in youth literacyprimary school completion, and secondary school completion are all shrinking, even in many poor areas. Today, there are actually more women than men pursuing tertiary education and earning college degrees.label  

3. In the United States, domestic violence against women has fallen considerably since the 1990s. And the very worst kind of domestic violence—homicide of an intimate partner—has also become rarer in the United States, both for male and female victims. Police also recorded fourteen thousand fewer cases of rape in the United States in 2013 than in 2003—in spite of a population increase. In fact, both rapes and sexual assaults against women have declined significantly in the United States since the 1990s. Evolving attitudes about the acceptability of violence against women may be partially to thank.

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“… this only applies to big business …”

The union- and trial-lawyer-backed Paycheck Fairness Act, which would greatly expand the scope of lawsuits against private employers alleging gender pay inequality, has run into considerable resistance in Congress. The Bangor Daily News, for example, notes that middle-of-the-road Maine Sens. Olympia Snowe and Susan Collins, known for their willingness to support some Democratic initiatives, have criticized the PFA as “broad,” “unprecedented,” and costly to employers (Snowe) and as likely to “impose excessive litigation on the small-business community” (Collins).

Democratic Rep. Chellie Pingree (D-Maine), on the other hand, is impatient with all such objections:

“If there is litigation in the future, that is minor compared to making sure that people get fair pay for the work that they do,” Pingree said. “It is also important to say that this only applies to big business, this does not apply to the sandwich shop around the corner.”

What do you think she means by “only applies to big business” and not “the sandwich shop around the corner”? Keith Smith at ShopFloor checked out the language of the bill, which by its own terms would affect employers subject to the federal Fair Labor Standards Act of 1938. Does the FLSA apply “only … to big business”? No; according to the U.S. Department of Labor, it covers “almost every employee working in the United States.” To begin with, the law covers all employers that have two or more employees and do at least $500,000 a year in business. But that’s just the start, as Smith explains:

Even if a business meets these thresholds, the only employees who would not be covered by the FLSA would be the ones who do not produce goods for interstate commerce, or closely-related process or occupation directly essential to such production, who are not involved in domestic service and are not engaged in interstate commerce. So that means if an employee makes a phone call to another state, sends mail to another state, travels to other states or even processes credit card transaction [he or she] is engaged in “interstate commerce”.

It sounds as if Rep. Pingree has a distinctive, not to say eccentric, understanding of what constitutes “only … big business”.