Commentary: Women's Pay: Why The Gap Remains A Chasm
During the heyday of the women's movement more than 30 years ago, "59 cents on the dollar" was an oft-heard rallying cry, referring to how little women earned compared with men. Those concerns seem outdated today, when it's easy to find female doctors, lawyers, pop stars, even Presidential advisers. The progress toward equality in the workplace also shows up in government data on wages, which pegs women's average pay at 77% of men's compensation today.
But there's new evidence that women's advances may not be quite so robust after all. When you look at how much the typical woman actually earns over much of her career, the true figure is more like 44% of what the average man makes. That's the conclusion of a new study by Stephen J. Rose, an economist at Macro International Inc., a consulting firm, and Heidi I. Hartmann, President of the Institute for Women's Policy Research in Washington.
Why the big discrepancy? The Bureau of Labor Statistics (BLS) numbers, published every year, are accurate as far as they go. But they only measure the earnings of those who work full-time for an entire year. Only one-quarter of women, though, achieve this level of participation consistently throughout their working lives. So Rose and Hartmann looked at the pay of all men and women over 15 years, including those who worked part-time and dipped in and out of the labor force to care for children or elderly parents. This long-term perspective still shows an arc of progress: The 44%, based on average earnings between 1983 and 1998, jumped from 29% in the prior 15 years. But the more comprehensive view gives a less rosy picture of women's position in the work world.
Outright discrimination against women probably accounts for only about 10 percentage points of the pay gap, according to numerous studies. The bulk of the problem, then, lies with the conflicting needs and norms of society and employers. A majority of men and women still work in largely sex-segregated occupations, Rose and Hartmann's study shows, leaving many women stuck in lower-paying jobs such as cashiers and maids.
Family responsibilities, too, typically still fall more heavily on women, and neither society nor employers have found good ways to mesh those with job demands. Rose and Hartmann's data show that women can get equal treatment today -- but mostly when they behave like traditional men and leave the primary family responsibilities at home. For the majority who can't or won't do that, the work world remains much less accommodating. Of course, many women choose to take time off or to work part-time to be with their children rather than stay on the job. Yet that choice itself is constrained by the widespread lack of day care and flexible job options, Hartmann argues. "The 44% gap we found shows that there are still tremendous differences in how the labor market treats men and women," she says.
Hartmann and Rose came to their results by examining long-term earnings trends. The 77% figure comes from the BLS's 2002 earnings survey and looks at how much full-time, year-round workers make in a given year. By contrast, Rose and Hartmann used a University of Michigan survey that has tracked a sample of randomly chosen people and their children since 1968. They looked at how much each person made between 1983 and 1998 in every year from age 26 to 59 (to exclude students and retirees).
One surprise was just how many women work most of their adult lives. Fully 96% of these prime-age women worked at least one of those 15 years, and they clocked an average of 12 years on the job. In other words, few women these days drop out altogether once they have kids.
But those few years out of the labor market carry a stiff penalty. More than half of all women spent at least a year out of the labor force, the study found, and they earned an average of $21,363 a year over the years they worked, after inflation adjustments, vs. nearly $30,000 for women who stuck with it for all 15 years. Indeed, anyone who drops out risks derailing their career and permanently slashing their pay. Just one year off cuts a woman's total earnings over 15 years by 32%, while two years slice it by 46% and three by 56%, according to Hartmann and Rose. The work world penalizes men nearly as much; their average pay drops by 25% if they take off a year. Fewer than 8% of men did so, however. "Our economic system is still based on a family division of labor, and women pay the price," says Rose.
Women also take a big hit for going part-time. On average, they work a lot less than men: 1,498 hours a year, vs. 2,219 worked by the typical man. The fewer hours women work account for about half of the total pay gap between the sexes, Rose and Hartmann concluded. Some women have turned to self-employment as a way to fit work and family together. But they often must accept lower pay in the process. Brita Bergland, a Windsor (Vt.) resident, found it difficult to manage her sales job at a printing company while she also cared for her aging mother and her daughter. So she struck out on her own six years ago and has managed the work-life balance much better ever since. The cost: about a $15,000 cut in annual earnings, down from the $55,000 to $60,000 she made as an employee. "These are the choices women make because society doesn't help them to support children and parents," says Bergland, who's now 50.
And while many women have made great strides in some highly visible professions such as law and medicine, historical patterns of sex segregation remain strong across much of the economy. Overall, just 15% of women work in jobs typically held by men, such as engineer, stockbroker, and judge, while fewer than 8% of men hold female-dominated jobs such as nurse, teacher, or sales clerk. These findings were reiterated in a detailed BLS analysis released on June 2 that uses the 2000 census to look at the jobs men and women hold.
Such a sex-segregated economy leaves women with some startling disadvantages. Overall, they earn less than men with the same education at all levels. Incredibly, male dropouts pulled down an average of $36,000 a year between 1983 and 1998, after inflation adjustments, while women with a bachelor's degree made $35,000. Women with a graduate degree averaged $42,000, but men got nearly $77,000.
The good news is that the pay gap continues to narrow no matter how it's measured. That's likely to continue; female college graduation rates surpass those of men, and they're catching up in grad school, too, so they're likely to gain from an economy that rewards skill. Women also should benefit from the ongoing shift to services, where they're more likely to work, and lose less than men from the decline of factory jobs.
Still, speedier progress probably won't happen without more employers making work sites family-friendly and revamping jobs to accommodate women and men as they seek to balance work and family demands. "The workplace needs to change to match the workforce," says Ellen Bravo, national director of 9to5, National Association of Working Women. Until that happens, a woman's labor will continue to be worth a fraction of a man's.
By Aaron Bernstein