Gender Pay Gap a Myth

At first, the link I followed told me this story was from CBS.  I found it astonishing that a major news network would challenge a previously agreed on Obama Administration narrative, and sure enough I found that this was not actually from the people at CBS who are paid to write the news (they are too busy reprinting White House talking points) and is actually from one of their financial bloggers.

Never-the-less, it is a great post that gets at why every serious academic study tends to debunk the 77% gender pay gap myth.   All of it is good but the consistently most powerful point that I tend to use if I am only given time in an argument to make one point is this one:

Despite all of the above, unmarried women who've never had a child actually earn more than unmarried men, according to Nemko and data compiled from the Census Bureau.

Women business owners make less than half of what male business owners make, which, since they have no boss, means it's independent of discrimination. The reason for the disparity, according to a Rochester Institute of Technology study, is that money is the primary motivator for 76% of men versus only 29% of women. Women place a higher premium on shorter work weeks, proximity to home, fulfillment, autonomy, and safety, according to Nemko.

It's hard to argue with Nemko's position which, simply put, is this: When women make the same career choices as men, they earn the same amount as men.

One would think that this quote from Obama's own Department of Labor would be enough to kill this meme:

"This study leads to the unambiguous conclusion that the differences in the compensation of men and women are the result of a multitude of factors and that the raw wage gap should not be used as the basis to justify corrective action. Indeed, there may be nothing to correct. The differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers."

  • Mike Powers

    Obviously we need the government to make it mandatory that female-owned businesses get paid twice as much for the same work that male-owned businesses do.

  • Jim P

    Great post, Warren. One minor correction: the "CONSAD" report which you reference in the final paragraph was issued about one week prior to Obama's (first) inauguration. It was commissioned by the Bush DOL. Shockingly, after Obama took over, DOL pulled the report and has been trying ever since to deny the existence of the report.

  • joe

    I was at a neighborhood xmas party where the discussion of equal/unequal pay for women was brought up (by a group of moderately strong leftist women) . I pointed out a number of factors that account for the difference, one significant item is the ability of one of the spouses to work the extra 10-30 minutes to actually finish a project before going home vs having to go pick up the kids then taking 45-60 minutes to finish the project the next day. In my industry, there are a number of objective ways to measure employee productivity which is reflected in compensation. Fortunately, since it was a neighborhood party, the conversation was congenial, and they actually acknowledged that an employer has a unique vantage point to judge the appropriate compensation based on productivity (as opposed to the leftist talking points).

    They may have also acknowledged that there isnt two different sets of the laws of supply and demand - one for male employment and a second for female employee.

  • irandom419

    Clearly, customers are sexist and only pay half has much as they should.

  • Harry

    Coyote, I think there is more going on here than the argument over equal pay for equal work and sex discrimination, both of which are illegal. As the father of my successful daughter, I am sensitive to anything illegal happening to her. This, unlike Al Gore's fantasies, are a settled item few would challenge.

    Rather, the question is over the idea of "comparable worth" that has various philosophical roots, but trace to Marx's labor theory of value. (I can see it going all the way back to Plato, where the Philosopher King, who best appreciates (almost) the Platonic forms is the one best equipped to do the just thing.

    The doctrine of comparable worth attempts to do justice, especially payroll justice, for effort and good ethical intention. Thus, a person with a Masters in sociology, after ten years of toiling in a soup kitchen should be paid the same, or perhaps more, than an MBA with ten years experience in selling salty potato chips. This does not mean that each should wallow in luxury; both should be able to afford fuel-efficient cars and live in a three-bedroom house not exceeding the square footage allowed for that pay grade. Doctors of Medicine and Philosophy get paid more, and Orthopaedists get paid the same as famous Economics Professors, and if they belong to a labor union, might get extra.

    At the top of this pyramid is the U.S Secretary of Labor, who administers the apparatus of people who make the decisions about what is comparable to what. It is here that this whole idea suffers a Hayekian epistemological breakdown. Even if there were not the epistemological problem, there is the Fascist problem, where everybody loses their freedom to trade their time and skills for good money freely earned.

    Since Equal Pay for Equal Work is the law, these people hollering for equal treatment must be talking about something else, perhaps Comparable Worth; unfortunately, most of the time "their" complaints are half-baked appeals short on specifics. Only in universities does one find Marx discussed seriously, and I doubt that actress at the Oscars was taking sides on the difference between Plato and Aristotle, but perhaps she wishes her agent would negotiate in her next project to be paid better than the median average male star.

  • obloodyhell
  • obloodyhell

    Lucky you. I had a friend who was dating an ardent feminist at one point (she regularly wrote articles for Tri-State area feminist rags)... she was at some party where this guy said some thing she found offensive. She dumped a plate of spaghetti on his head.

    Now, you may ask, "what's the big deal?" -- Simple: She was being a total hypocrite, and depending on her getting special protections as a woman.

    Go out there and ask 100 guys the following question: "If a guy dumps a plate of spaghetti over another guy's head, is there a significant chance that a physical altercation -- a fight -- will ensue?" and "If so, who would everyone say started the fight?"

    I'm going to go Waaaaaaaay out on a limb, here, and say the answers are, for the most part, "Yes", and "The spaghetti guy, of course..."

    I'll even lay you good odds that even the full gender reversal -- "If a woman dumps a plate of spaghetti over another woman's head, is there a significant chance that a physical altercation -- a fight -- will ensue?" has the same two answers.

    But you can damned well bet that, if the guy whose head she dumped the sphaghetti on had struck her in any way -- including a slap or a hard shove that knocked her down, two things would have happened: 1 -- she would have shouted in amazement (and probably something along the lines of "How DARE you strike a woman!!"), and 2 -- HE would have been the one in the wrong for doing so.

    Don't get me wrong, here, I'm not advocating for striking women at all -- I'm just saying, if you want EQUAL RIGHTS then you need them all the way around -- if a female is ready to TAKE things to a physical level, then she needs to be ready to HANDLE things on a physical level. And not hide behind: "But I'm a WOMAN!!!"

    And this is significant, in that it restrains men with one another -- in any given situation of possible offense, EVERY guy is conscious of the significance of the very real RISKS of taking things to a physical level with another guy -- you might get your ass kicked. So we often don't, even in the face of significant provocation. If women want equality (they don't, they want all the benefits of being men, at the same time as they keep all the benefits of being a woman), then they need to be prepared to handle things no differently in any situation than a man is expected to.

  • marque2

    When I was in college in 1992, some group did a study of Business Majors, and found that women who graduated who got the same job as a man - so the comparison was apples to apples, earned an average of 8% on the first job out of college. This was attributed to the fact that women on average had better GPA's.

    There are also some flaws in long term surveys. Gogetter women used to get fast tracked. Salaries are based on position and experience, so fast tracked women would be earning much more than their piers who graduated at the same time, so they were actually doing much better. But the surveys would compare a woman in second tier management and 5 years experience with a man in second tier management with 15 years experience, and then conclude the woman was being robbed.

  • marque2

    Heck even Hillary only got 67% for her memoirs of what Bill got for his. With women getting an average of 78% of men, she is setting women back!