The Gender Gap: Both Sides Are Wrong

Today is Equal Pay Day and thus a great opportunity to talk about an issue on which the mainstream Left and the mainstream Right get things wrong (though there are so many such issues you could easily write about it everyday… But I digress.) April 12th is the day that women “catch up” to men’s earnings from the year before, according to the off-cited statistic that “women make 77 cents on the dollar of what men make.”

Democrats, including President Barack Obama, and the Left in general use this statistic to argue that there is widespread workplace discrimination, which of course means we need stronger anti-discrimination laws to punish those nasty employers who are stuck in the 1950’s paying women less for doing the same work as men. The problem? Pay discrimination based on gender is already illegal both federally and in nearly every state. Furthermore, the “77%” statistic is pretty much pure myth.

That first point should probably give Democrats pause (will making something more illegal-er finally fix the problem? Maybe they should ask Hilary Clinton, who is currently being roasted by the Left for supporting mandatory minimums for drug sentencing…but I’m getting off topic again). The second point is really critical, both because correctly diagnosing the cause of a problem is a necessary prerequisite to fixing it and because the statistic has become so mythologized that the left has a hard time parting with it despite irrefutable evidence.

Speaking of evidence, it should be easy enough for you to find. You can take your pick of sources, both in journalism and academia. For example:

PolitiFact

FactCheck.Org

The Wallstreet Journal

But if none of those sources can convince you, perhaps you’ll believe Barack Obama’s economic adviser, Betsey Stephenson, who was forced to retreat from her innaccurate claim that women make 77% of what men make “working side by side doing identical work”.

“If I said 77 cents was equal pay for equal work, then I completely misspoke. So let me just apologize and say that I certainly wouldn’t have meant to say that.

“Seventy-seven cents captures the annual earnings of full-time, full-year women divided by the annual earnings of full-time, full-year men,” Stevenson clarified. “There are a lot of things that go into that 77-cents figure, there are a lot of things that contribute and no one’s trying to say that it’s all about discrimination, but I don’t think there’s a better figure.”

Her clarification gets it right. When looking at all women compared to all men in the United States economy, women only make 77% of what men make. But that fails to account for any of the multitude of differences that affect a persons’ salary, so it definitely is not for “the same work.”

The fact of the matter is the gender pay gap is due primarily to the following factors:

  1. Fewer women choose to enter dangerous occupations such as construction, logging, or oil drilling, which pay higher wages. As a result, men are much more likely to be killed or injured on the job.
  2. Women choose majors in college which lead to lower paying jobs, such as drama or counseling, while men are more likely to enter STEM fields.
  3. Women work fewer hours than men and take more time off to spend with family or on childcare.

When you account for these factors, the gender pay gap closes or even reverses. In studies were a gap remains (usually no more than 2%), the gap can be attributed to the fact that women are less likely to negotiate their salary and more likely to accept an initial offer (Harvard Business Review).

And when you think about it, it wouldn’t make any sense for employers to pay women less than they pay men. If they were able to get away with that, wouldn’t the entire labor force be women? Aren’t capitalists all greedy profit maximizing bottom line chasers, according to the Left? Any employer with a brain wouldn’t hire a man if he could get a woman to do the same job at a 23% discount.

The fact that Democrats and Leftist media organizations repeat this figure anyway is all the proof you should need that their repeated attempts at passing more “Equal Pay” restrictions on businesses is about politics, not economics. Getting Republicans to vote against those bills is a great way to push the narrative that the Right is engaged in a “war on women.”

The problem of course is that this legislation would add needed regulatory costs and additional lawsuits to already overburdened US businesses, and that it does nothing solve what is actually a real problem in the US economy.

And this is where the Right gets it wrong.

People on the Right often conclude that because the 77% statistic is a myth, and more specifically that there’s no sign of employer discrimination, the there is no Gender Gap problem. This is wrong.

Julie Borrowski recently wrote an article for the Libertarian Republic titled “Women Choose to Make Less Money Than Men–And That’s Okay.” She’s right that women “choose” to make less, in the sense that the wage gap is a result of individual actions, but she’s wrong to say that’s okay. Similarly dismissive articles can be found from Conservative groups like the American Enterprise Institute.

First of all, the Gender Gap has very real negative economic effects. According to the McKinsey Global Institute, women make up half the population but comprise only 46% of the labor force and contribute only 40% of the US GDP. Achieving full gender pay parity would increase the nation’s GDP by $4.3 trillion in 2025 and a more attainable goal of merely narrowing the gap would add $2.1 trillion.

Second, and this is the root of the problem, the gender gap is not the result of true choice. Sure, in some cases it is. Julie Borrowski for example seems to have made a conscious decision to forgo law school in favor of a lower paying but more personally satisfying career. In cases like that, people can hardly argue there’s a problem.

However, what the Right often misses is that the gender gap is the result of a systemic problem. No, it’s not systemic discrimination by employers. Rather, it is the subtle ways society guides girls into certain career and education paths or let’s men off the hook for childcare. And this isn’t to say that we need a centralized nation program either.

Not every solution to every problem comes from the federal government. Much of the solution will likely be found in social change, rather than political change, and to the extent the government is involved, it should be at the local level. Parents, teachers, and co-workers need to encourage women to fulfill their professional potential, enter fields that will make them rich, and not be afraid to negotiate for what they are worth.

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Phil King

Phil King

I am an avid reader and believer in free markets and individual liberty. I have management experience in both government and on political campaigns. I am a critic of politicians on both sides of the aisle, many of whom are badly failing the American people.