New Gender Pay-Gap Studies Are Challenging Conventional Wisdom

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The U.S. is the only nation in the developed world that doesn’t mandate maternity leave with pay.

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  • Using median pay for all workers, women make 21% less than men
  • Adjusted for factors such as hours, gap may be as little as 3%

The number is trotted out so often to make a point that it’s become unambiguous: Women in the U.S. earn about 79 cents for every dollar that men do. But recent studies paint a more nuanced picture of the wage gap.

Taking into account several factors, the difference could be just pennies, the studies, from think tanks on different places on the political spectrum, found. Women may make less because they decide to work fewer hours, or because scarce child-care options give them no choice. Some are blocked out of jobs by physical abilities and education. That’s not to say there isn’t discrimination, the studies noted, though it’s responsible for a small part of the chasm.

Where opinions differ is on whether government should work to bring the genders’ aggregate pay in line, or just focus on rooting out illegal inequities.

“There’s no reason that two groups -- that have different educations and choose different occupations and chose different amounts of time at work -- there’s no reason for them to be paid the same,” said Diana Furchtgott-Roth, a senior fellow at the conservative Manhattan Institute for Policy Research. The institute said in a report in April that after controlling for various circumstances, the gap “practically disappears.”

Third Way, a centrist Democratic public-policy group, issued its report in March, saying that while the 79-cents figure is “real,” it doesn’t fully account for the different types of work women tend to do. At the same time, “there remains a gap that cannot be attributed to observable factors,” Third Way said. “That’s the unexplained gap, and it is the strongest evidence of direct gender discrimination within individual workplaces.”

Disproportionate Limits

The fact that much of the divide can be explained doesn’t make it any less urgent an issue to be addressed, said Emily Liner, the author of the Third Way analysis. Government can play a role, she said, because the difference grows as women advance in their careers, probably due to child-care duties that disproportionately limit their options and thus their pay.

The U.S. is the only nation in the developed world that doesn’t mandate maternity leave with pay. Childcare costs for families with two children exceeds that of rent in 500 of 618 metro areas in the country, according to the Economic Policy Institute, a resource group that advocates for workers.

The most effective way to shrink the gap is for companies to make parental leave more generous and equitable regardless of gender, and for the country to figure out how to make childcare more affordable for single mothers, Liner said. “It is going to take years before we can fully address this.”

EEOC Proposal

California Governor Jerry Brown, a Democrat, signed a law Monday to increase the pay employers must give workers who take time off to care for family members. San Francisco last week became the first U.S. city to require six week of fully paid leave for new parents, and New York state legislators passed a law requiring 12 weeks of partially paid time off.

Earlier this year, President Barack Obama ordered the Equal Opportunity Commission to collect statistics to make it easier to detect illegal pay gaps. The EEOC has proposed requiring companies to report pay data on the EEO-1 forms they file detailing how their workforces break down by race and gender.

“There’s a lack of data about where disparities exist,” Jenny Yang, the agency’s chairman, said in an interview Friday. But the U.S. Chamber of Commerce opposes the proposed rules, arguing that they impose burdens on employers, could compromise confidentiality and might generate “false positives” for discrimination.

Some Progress

Right now, men dominate 26 of the 30 top-earning jobs in the U.S., women 23 of the lowest-earning 30, according to Liner’s research. In many industries, men have long held most of the highest paying executive-level positions, while more women have jobs as secretaries. There’s been progress: A women early in her career makes 90 cents on the dollar, according to the research, up from 68 cents on the dollar 35 years ago.

In finance and insurance today, women earn 59 cents for every dollar a man does, according to data compiled by Bloomberg. Geographically, the gap is widest in the Bridgeport-Stamford-Norwalk metro area, congruent with Fairfield county, Connecticut, where hedge funds are concentrated. Women there earn 44 cents on the dollar.

The National Committee on Pay Equity, the group behind Equal Pay Day, has since 1996 picked a date to mark how long a woman has to work, based on median pay of all employees as calculated by the U.S. Census Bureau, before she matches what a man earned in the previous year. In 2015, the women’s median was $39,621; the men’s was $50,383. MTV is e-mailing women leaders a “79% Work Clock” that will ring at 3:20 p.m. Tuesday, 79 percent into the work day, to raise awareness.

Politicians have proposed fixes. Some Democrats, for instance, back the Paycheck Fairness Act, which would make it easier to penalize companies for disparity and protect employees who disclose their pay. The Manhattan Institutes’s Furchtgott-Roth said that’s the wrong way to go, because it would burden employers without attacking the essential reasons for the disparity. “We have laws against discrimination,” she said. “We don’t have laws saying certain groups should be paid the same amount no matter what.”

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