Informing policy. Inspiring change. Improving lives.
1200 18th Street NW, Suite 301
Washington, DC 20036
202 785-5100
iwpr@iwpr.org

6 Things Washington Post’s Glenn Kessler Missed about the Gender Wage Gap

by Heidi Hartmann, Ph.D., Barbara Gault, Ph.D., and Ariane Hegewisch

(This post is in response to Glenn Kessler’s two Pinocchio rating of “President Obama’s persistent ’77-cent’ claim” on April 9, 2014, in the Washington Post.)

Glenn Kessler presents a very one-sided discussion of the wage gap in this April 9th “Fact Checker” post in which he increased President Obama’s rating on his use of wage gap statistics from one Pinocchio (in the 2012 campaign) to two—he should have lowered it from one to zero.  President Obama has correctly used a long standing data series issued every year by the Census Bureau.  The 77 percent wage ratio figure is an accurate measure of the inequality in earnings between U.S. women and men who work full-time, year-round in the labor market.

Here are some other things to keep in mind about that statistic:

1) Kessler claims that President Obama uses the 77 percent wage ratio figure because it shows the biggest wage gap when other data series available from the Bureau of Labor Statistics show slightly smaller gaps.  Leaving aside how Kessler could get inside the President’s head and know why he picked a certain series, everyone who writes about this issue should know that this figure based on median annual earnings is the historical headline figure that allows the longest comparison across time.

2) Kessler claims that the other series—weekly or hourly earnings—are more accurate, but there is simply no basis for saying so.  The 77 percent figure actually includes the broadest range of kinds of earnings; for example annual bonus payments are a big part of remuneration in some fields and are included in the 77 percent figure, but are excluded from the weekly or hourly earnings figures.

3) In his first fact check column (posted online at 6:15 am on April 9, 2014), Kessler failed to note that other measures show a much larger gap than the 23 percent figure President Obama used.  If part-time workers were included, a figure that Statistics Canada uses, the wage ratio would be 71 percent and the gap 29 percent.  The United Kingdom has used life-time earnings ratios.  One IWPR study found that across 15 years (ending in 1998, using the Panel Study of Income Dynamics), the typical American woman earned just 38 percent of the typical man.  The Urban Institute, using Social Security earnings data, finds that the typical wife earns about 50 percent of what her husband does across their working lives. Kessler had updated his column to add mention of these other measures, but fails to alter his conclusion that the President used the biggest wage gap.  In fact, the figure the President used falls in the middle of the range and is the one most commonly used for the past 60 years.

4) Kessler emphasizes that women ‘choose’ different and lower-paying college majors than men and seems to think such differences mean that the wage gap measure is not a good measure of economy-wide wage inequality.  ‘Choice’ is, of course, an unverified assumption. There is considerable evidence of barriers to free choice of professions, ranging from lack of unbiased information about job prospects to actual harassment and discrimination in male dominated jobs. It is highly likely that there are many women who are freely choosing to become social workers, and are making well-informed decisions, and the same is likely to be true for men choosing to be engineers. However, there are no hard facts on how many, or indeed, how many would ‘choose’ otherwise in a world of complete information and nondiscriminatory employment.  For example, in a world where half of engineers were women and half of social workers were men, men and women might ‘choose’ very differently than they do now. We do know that young women and men generally express the same range of desires regarding their future careers in terms of such values as making money and having some flexibility and autonomy at work, as well as time to spend with family members.

5) There are legal cases, as well as social science research studies, that show that, just by the mere fact of being a mother, women’s advancement opportunities shrink, and just by being a father, men’s grow. Yet, there is no proof that being a mother makes a woman less productive on the job.  And why should women who may be decades past the phase of active childrearing still be suffering a wage penalty?  While it is true that women typically take more time away from work for child rearing than do men, that decision often makes economic sense when a wife’s wages are lower than her husband’s—equal pay would likely lead to more equitable sharing of child rearing and to women and men working in the labor market about the same amount over their lifetimes.  Research shows subsidizing the cost of child care and providing paid parental leaves of up to six months would help women and men return to work sooner. While Kessler has said the goal of his Fact Checker column is to provide needed context to what political leaders say, this is a part of the needed context he omitted entirely.

6) It is true, as Kessler notes, that when factors such as occupation and parental or marital status are used as control variables in statistical models aiming to explain what ’causes’ the wage gap, the size of that gap will be reduced, and what is left unexplained is generally thought to possibly be the result of discrimination. But it is just as likely that discrimination affects these ‘control’ variables as well as the size of the remaining gap. Unfortunately, Kessler cites only the literature that ignores the possibility of discrimination affecting the control variables.  He cites economist June O’Neill, well-known in the field for her opposition to government intervention to reduce the size of the wage gap. He also cites a study commissioned by the George W. Bush administration and done by a conservative research firm, CONSAD, which Kessler “camouflages” by saying the St. Louis Federal Reserve Bank cited it.  Kessler fails to cite peer reviewed literature surveys published in mainstream economics journals, including papers by Francine Blau and former Acting Secretary of Commerce Rebecca Blank and co-author Joseph G. Altonji. These latter studies estimate that 25-40 percent of the gross wage gap remains unexplained when factors reasonably thought to affect productivity are included as control variables in the models.

The 77 percent figure covers everyone working full-time, year round and does not reflect only women and men doing exactly the same job in the same firm; however, it does reflect women and men working full-time, year round not earning the same. The wage gap figure reflects a number of different factors: discrimination, lower earnings in occupations mainly done by women, and also the fact that women still tend to be the ones to take more time off work when families have children.  Just because the explanation of the gender wage gap is multi-faceted does not make it a lie.

We should note that on occasion, many politicians—including U.S. presidents—journalists, and others present the 77 percent figure as comparing men and women who do the same jobs, and this unfortunate tendency has led to great confusion.  But President Obama was careful in both his recent State of the Union speech and his Equal Pay Day speech to use the figure without that inaccurate qualifier. In his 2008 campaign, his literature often used the phrase ‘unequal pay for an equal day’s work’—that phrase is an accurate way to refer to men and women who both work full-time earning different pay.

Heidi Hartmann, Ph.D., is a MacArthur Fellow and the president and founder of the Institute for Women’s Policy Research.

Barbara Gault, Ph.D., is the vice president and executive director of the Institute for Women’s Policy Research.

Ariane Hegewisch is a study director at the Institute for Women’s Policy Research.

Equal Pay for Women and a Higher Minimum Wage Will Move the Economy Forward

by Heidi Hartmann

This post originally appeared on Working Economics, the blog of the Economic Policy Institute.

Heidi Hartmann,Yesterday morning, I had the honor of participating in a Democratic Steering and Policy Committee hearing, hosted by Leader Nancy Pelosi, in the Cannon House Office Building. Appearing with Lilly Ledbetter—whose story of pay discrimination went all the way to the Supreme Court and ultimately resulted in new legislation in 2009 named after her—and Laura Miu, a psychological counselor, who recently experienced pay discrimination, I was able to share recent research by the Institute for Women’s Policy Research (IWPR), which I lead, and by the Economic Policy Institute (EPI), the think tank that provides the last word on virtually all topics related to American workers. The briefing attracted 20 members of Congress, including Representatives Rosa DeLauro and Robert Andrews, who co-chair the Steering and Policy Committee, and Representatives Donna Edwards and Doris Matsui, who chair and vice-chair, respectively, the Democratic Women’s Working Group. IWPR’s research was originally released in January when it appeared in the latest Shriver Report, A Woman’s Nation Pushes Back from the Brink, produced in partnership with the Center for American Progress. EPI’s research was published as an update in December 2013 of an earlier paper last spring that details the impact of an increase in the minimum wage to $10.10 per hour.

The economic progress women have made in the past five decades is enormous. Women have entered many occupations that had been virtually closed to them, now earn more over their lifetimes, and contribute more to family income and to the economy as a whole than ever before.

But there is still a long way to go. Despite the passage of the Lilly Ledbetter Fair Pay Act of 2009, which makes it easier for women to sue for equal pay—avoiding a similar plight as the bill’s namesake, when she learned she was earning vastly unequal pay near the end of her career—progress toward closing the pay gap has stagnated. Since 2000, the wage ratio has remained around 76.5 percent. If trends of the past five decades are projected forward, it will take almost another five decades—until 2058—for women to reach pay equity.

Our researchers at the Institute for Women’s Policy Research have shown that if women received pay equal to comparable men, the poverty rate of all working women and their families would fall by half, from 8.1 percent to 3.9 percent. The number of women affected is substantial: 42.5 million working women—about 60 percent of all working women—would receive a pay increase, with the average annual pay increase estimated at $6,251 (including $0 amounts for those who got no raise). Moreover, paying women the same as comparable men would have added an additional $448 billion (equivalent to almost 3 percent of GDP) to the economy in 2012, about the equivalent of adding another state the size of Virginia to the nation.

Raising the minimum wage has been estimated to have a similarly dramatic effect on growing the economy and reducing poverty, especially among women. In a recent research paper, David Cooper at EPI calculates that 27.8 million workers—nearly a fifth of working Americans—would be directly and indirectly affected by an increase in the federal minimum wage to $10.10 per hour, across the three years 2014 -2016. These pay increases, Cooper estimated, would result in the GDP increasing by 0.3 percent ($22 billion). Moreover, 85,000 new jobs would be created by the additional spending power of low-wage workers.

Cooper shows that women would constitute 55 percent of the workers affected directly and indirectly by the increase in the federal minimum wage to $10.10 per hour: 15.3 million women would receive a pay increase. The typical minimum wage worker is 35 years of age and provides half her or his family income. Nearly one-fifth of American children have at least one parent whose earnings would be raised by an increase in the federal minimum wage to $10.10 per hour. Moreover, unpublished EPI data shows that 2.3 million single mothers, or nearly one-third of all working single mothers, would be directly and indirectly affected by the increase in the federal minimum wage.

The members present at the hearing were eager to hear about the importance of eliminating the gender pay gap and increasing the minimum wage, but they were also intensely interested in the issue of pay secrecy. Lilly Ledbetter explained that she had been told when hired that if she so much as discussed her pay with anyone she would be immediately let go. The members wanted to know how many other people might be affected by pay secrecy. A survey conducted by IWPR in 2010 was the first and (so far as we know), the only survey to look into pay secrecy. The survey found that, like Ledbetter, many workers do not know what their colleagues are being paid and are unlikely to be able to find out. More than 60 percent (62 percent of women, 60 percent of men) of private-sector workers responded that discussing pay at work is either strongly discouraged or prohibited.  By contrast, only 18 percent of female public-sector workers and 11 percent of male public-sector workers reported being discouraged from discussing pay rates or fearing penalties for doing so, and the gender wage gap is much smaller in the public-sector than in the private-sector.

Public policies can combat both unequal pay and low minimum wages. More than half of the states have made pay adjustments in their civil service systems that raise the pay of female-dominated jobs. Firms that contract with local and state governments and the federal government to provide goods and services can be required to meet standards, such as non-retaliation toward workers who share pay information or a higher minimum wage (as President Obama said in the State of the Union speech that he would require of federal contractors), or report their gender wage ratios within job categories, as has been done in New Mexico for state contractors.

The stall in the economic progress of women in the past decade, coupled with the large number of women and families who would benefit from increases in women’s earnings resulting from stronger equal pay remedies and a higher federal minimum wage, make the case that implementing new laws and public policies is urgent. Paying women equally and raising the minimum wage would significantly reduce poverty and boost the growth of the U.S. economy.

Heidi Hartmann, Ph.D., is the president and founder of the Institute for Women’s Policy Research.

Shining a Light on the Wage Gap

HHFifty years after the Equal Pay Act, employment discrimination persists but is harder to see.

By Dr. Heidi Hartmann

When the Equal Pay Act (EPA) was passed 50 years ago, discrimination was, in many ways, openly accepted in the workplace and women were expected to earn less than men in the same jobs. The EPA signed by President John F. Kennedy on June 10, 1963, helped to reduce this type of blatant employment discrimination, but it is still present and the wage gap persists.

The Institute for Women’s Policy Research (IWPR) was founded 25 years ago, at the end of the 1980s, the decade which saw the most sustained narrowing of the gender wage gap since passage of the EPA. Between 1981 and 1990, the gender wage gap closed by more than ten percentage points. In the most recent decade, progress has stalled and the gap narrowed by no more than one percentage point.

There is no single cause for the pay gap. Jobs dominated by women pay less than jobs dominated by men. Over their lifetimes, women still take off more time from paid work for family care than men. Women also still face subtle—and not so subtle—discrimination when they do the similar work to men. Direct discrimination is still estimated to account for between one quarter and 40 percent of the wage gap, according to several reviews of social science research.

Employers can no longer advertise jobs at different rates for men and women. But paying women less for similar performance, giving women less access to career-enhancing opportunities, and making it harder for women to get promoted are practices that continue to hinder progress towards equal pay.

Tackling those types of employment discrimination is surprisingly difficult because employees may still be fired simply for discussing their earnings with a colleague or coworker. In an age when information sharing has become widespread and hearing about a major life event over social networking is not uncommon, exchanging pay information remains frowned upon by many employers. Pay secrecy allows disparities, discrimination, and unequal pay to hide under the rug.

President Kennedy hands out pens at the White House signing of the Equal Pay Act on June 10, 1963.  Image by © Bettmann/CORBIS

President John F. Kennedy hands out pens at the White House signing of the Equal Pay Act on June 10, 1963. Image by © Bettmann/CORBIS

According to an IWPR/Rockefeller survey, half of all workers (51 percent of women and 47 percent of men) report that the discussion of wage and salary information is either discouraged or prohibited and/or could lead to punishment. The Equal Pay Act does not protect workers against retaliation for sharing salary information with their co-workers. In the public sector, where pay information is publicly available, a smaller pay gap exists compared to the private sector.

The 2009 Lily Ledbetter Act provides that every paycheck that pays a woman less than a male colleague for equal or similar work can be challenged in court, but the act did not address pay secrecy. Ledbetter worked for a company that prohibited the discussion of one’s salary. After 18 years on the job, Ledbetter sued when, in an anonymous note from a coworker, she received evidence that she was being paid unfairly. The Paycheck Fairness Act was introduced in the last Congress, but failed to pass to a vote in the Senate. This bill would have protected workers against retaliation for sharing pay information.

Women don’t have the time to wait to earn the same as men because their families need the money now. According to the most recent estimate from IWPR, however, the wage gap is not expected to close until 2057. Many women working today will never see equal pay, harming their long-term earnings and leaving them with lower retirement income.

In an age where women in the United States are almost half the workforce, are more likely to gain higher levels of education than men, and increasingly are the main or co-breadwinner in families, we cannot wait for another 44 years for the gender wage gap to be finally relegated to the history books.

Dr. Heidi Hartmann is President of the Institute for Women’s Policy Research. 

Obama is Right About His Wage Gap Statistics

By Heidi Hartmann

Despite recent criticism from “The Fact Checker” blog on The Washington Post, there is nothing at all misleading or biased about President Obama’s use of the 77 percent figure as a measure of wage inequality between women and men in the United States. Women’s median earnings for year round, full-time work in 2010 of $36,931 amounted to 77.4 percent of what men’s median earnings for year-round, full-time work were in the same year ($47,715). These numbers come from the Current Population Survey’s Annual Social and Economic Supplement (ASEC) and include the non-institutionalized civilian population who are either self-employed or work for wages or salary and are 15 years of age or older. These data are reported on an annual basis each year in August or September by the Census Bureau based on a household survey they conduct. This particular earnings series—annual median earnings for full-time, year-round workers—has the longest history, most likely explaining why it is the most frequently cited data series. It is the series on which NOW’s famous pin saying simply 59¢ was based, as that represented the wage ratio back in the late 1960s when NOW was founded. Because this data series has the longest history, its wage ratio serves as a well-known index to measure trends over time.

A Variety of Wage Gap Numbers

There are a range of numbers given for the wage ratio or gender wage gap (generally the gap is 100 percent minus the ratio, so with a ratio of 77 percent the gap is 23 percent), stemming from different data sets or different ways of analyzing the data. Each can be correct, depending on what the analyst wants to study. Each data set and methodology yields estimated pay gaps. Each is based on a survey, generally of a sample of all households, though wage data can also be gathered from samples of employers or of administrative records such as unemployment insurance or Social Security earnings records. Generally no data set is complete; all are subject to both sampling and non-sampling errors. Furthermore, different researchers may choose to extract different elements of data. For example, some researchers may restrict the age range of workers to prime age adults, those aged 25 to 54, in order to compare those for whom education is generally complete but who have not yet reached retirement age. To illustrate the burden of inequality faced by women of color, some researchers might compare the earnings of minority women to white men; others restrict the comparison of the earnings of minority women to those of minority men. Both ways can be correct depending on what one wants to illustrate.

In the United States, researchers generally restrict the comparisons to those who work full-time, whether on a weekly basis or an annual basis, but in other countries, for example Canada, total earnings of all workers (both those who work full time year-round and those who work part time or part year) might be compared in a gender wage ratio. If we do that in the United States we get a wage ratio of 72.4 percent and a larger gap of 27.6 percent. Although the Post‘s fact checker claimed that President Obama picked the wage ratio that made gender inequality look the worst, he clearly did not—he could have picked this one.

Another even smaller wage ratio (and larger wage gap) was generated by IWPR in our report entitled Still a Man’s Labor Market (February 2004), where based on a different data set, the Panel Study of Income Dynamics, on a survey of households conducted by the University of Michigan, we calculated that across 15 years, prime age women earned just 38 percent of what prime age men earned, for a staggering gender gap of 62 percent. This ratio is just as valid and just as accurate as others. It is telling us that across a 15-year period the typical woman in the United States earns only 38 percent of what the typical man earns. As the study points out, the reason women earn so much less across 15 years is that they spend more time out of the labor market; women typically work both fewer years and fewer hours per year than do men. No one would take this measure as a measure of discrimination by employers, but as a measure of women’s economic independence or lack of it or of what women contribute to family income across 15 years, this is an excellent measure. This type of life-time measure was used by the United Kingdom under the Labor government.

A larger wage ratio and smaller wage gap is generated by the Bureau of Labor Statistics from the Current Population Survey by looking at median weekly earnings for full-time workers each week of the calendar year and then combining those medians to get an annual median weekly earnings figure. Currently this ratio is a bit higher than the annual ratio released by the Census Bureau, standing at 82.2 percent for 2011. As an IWPR fact sheet shows, in some years, these two ratios are virtually identical, yet the Post fact checker made a big deal of how President Obama chose the lower ratio. Not so, President Obama just chose the most commonly used wage ratio. And, contrary to the fact checker’s claim, there is nothing superior about the weekly measure. It is not, for example, more inclusive: on the one hand it includes some workers who work full-time but not all year, but on the other hand it excludes the self-employed. It also underestimates earnings from annual bonuses—a substantial part of income in some high paying professional jobs and a source of income where a number of law cases show that women lose out.

In many countries an hourly wage ratio is used to avoid the measurement problem of full-time male workers working slightly more time than full-time female workers. Since, in the United States, some workers are paid on an hourly basis and others on a weekly basis, using either measure requires calculating a consistent wage measure, and the BLS does not routinely generate an hourly wage rate for all workers.

Response to Criticisms of the Wage Gap Measure

The most frequent criticism I hear of the wage gap is that it is comparing apples and oranges—it’s not comparing women and men in the same jobs or women and men who have the same education or same college major or whatever, and therefore the whole gap cannot be considered the result of pay discrimination. Interestingly, I don’t know of any individual or group who claims the whole pay gap is due to discrimination, so I don’t know why so much hot air is spent saying that it isn’t all due to discrimination. Many economists, sociologists, and other researchers have spent years trying to identify how much of the gap can be explained by factors that might reasonably affect wages, such as work experience, education, and so on. Generally in these analyses what cannot be explained by reasonable factors is considered possibly or likely the result of discrimination. Several comprehensive literature reviews that have been published in peer reviewed scholarly journals conclude that about 25 to 40 percent of the wage gap remains unexplained. But most of these studies do not assess whether some of the differences observed between women and men that might help explain the gender wage gap, like college major, are themselves the result of discrimination or of limited choice sets faced by women and men. In a world where most social workers are women and most engineers are men, few women and men may consider training for occupations that are nontraditional for their gender.

Much is also made of women’s choice to bear children and to spend some time out of the labor market as a result. But is that just a woman’s choice, or is it also a societal necessity? Years after that labor market absence should women still be suffering a wage penalty for that societal necessity? Or should society try to equalize the playing field by providing paid parental leave, encouraging fathers to share equally in child rearing, and providing subsidized, high quality child care to facilitate both parents’ return to the labor market?

The Case for Government Action

As Rachel Maddow recently pointed out on her news show, the existence of the wage gap should not be in dispute—the gap is there as measured in all the data sets released by federal government agencies. What is being argued about is whether that gap is meaningful; whether, if we can explain it by several reasonable factors, we don’t have to worry about it; whether we can pretend it isn’t really there. Conservatives, as she pointed out, tend to argue there is no gap, at least no gap that can be attributed to employer discrimination and therefore no gap that government policy needs to address. Liberals, in contrast, tend to argue there still is employer discrimination (with several horrendous cases of it coming to light each year as women bring legal actions against a wide variety of employers, despite the difficulty of doing so), and that, furthermore, a case can also be made for minimizing the negative economic effects of child bearing, particularly on women.

If we generally believe that women and men are equally talented and work equally hard on the job, that they tend to value the same things about work (such as making money and having some flexibility on the job), then they ought to be able to find opportunities in the labor market that pay them about the same. Yet while the evidence suggests that women and men generally do have equal ability and work equally hard and have equal value preferences, the evidence also suggests that they do not find labor market opportunities that tend to pay them about the same. In my view, this makes the case for government intervention.

The gender wage gap is a good measure of the lack of equal earnings between women and men in the labor market. Many women and men believe the gap should be smaller, that such a large gap as we have in the United States is unfair and reflects an unfair tendency for women to get paid less for what they do than men get paid for what they do. Moreover, such unequal pay inevitably leads to the misallocation of our human resources and a general reduction in U.S. productivity. Not only do women and their families suffer from unequal pay, but our society as a whole suffers as well, a circumstance that furthers the case for government intervention.

Heidi Hartmann is the President of the Institute for Women’s Policy Research.

The Wage Gap: Myths vs. Realities

By Heidi Hartmann

We owe a debt of gratitude to MSNBC host Rachel Maddow for pointing out the differing perceptions people have about the gender wage gap. In April, she invited me on her show to set the facts straight on the wage gap and I hope that I helped her to do that

By now, most Americans are likely familiar with the 77 percent figure, meaning that, at the median, women’s wages equal only 77 percent of men’s wages both for full-time, year-round work (in 2010, the most recent year for which data are available). This figure, provided annually by the U.S. Census Bureau, has come under criticism from conservative economists and others for a variety of reasons for the past several decades—so much so, that this simple and accurate figure is now viewed by many media outlets as suspect. One New York City newspaper even refused to allow an op-ed writer to include a number such as this provided by IWPR based upon government data.

On an April 30 broadcast of  the Sunday morning television show, Meet the Press, Ms. Maddow pointed out that another guest on the show, conservative-leaning CNN commentator Alex Castellanos, seemed to deny that men’s and women’s wages are unequal. After first countering that wages were equal, Mr. Castellanos said they were unequal but that was due to good reasons such as women working in fields like science or math, or women taking time off to have children, and so on. Mr. Castellanos was echoing justifications provided by conservative economists over the years to ignore the size of the wage gap by imagining that it is really much smaller than the data show, or that it may reflect women’s preferences—therefore, no government action to end discrimination is necessary.

While often those on opposite sides of an issue agree on facts but disagree on solutions, Ms. Maddow’s point is that, in terms of the wage gap, there exists a major difference in belief about the facts. In such circumstances, it is impossible to come to a compromise and agree upon a solution. Just as conservatives have spent decades challenging the role of government in regulating pollution, banks, or big business, they have spent decades challenging the popular wage gap number, and for a similar reason—to avoid policy changes. Let’s review what conservative economists have been saying.

Some economists challenge the 77 percent figure by pointing out it does not compare women’s and men’s earnings in the same jobs: in other words, the figure implicitly compares truck drivers, who are mostly male, with secretaries, who are mostly female, for example. Yes, the figure does compare women and men across the whole economy, but do we believe women should receive lower pay because they are any less talented, competent, or hard working than men? Given their equal competency, shouldn’t both women and men be able to find jobs in the economy that pay them what they’re worth?

When citing the wage gap, it may be more accurate to say, as President Obama often does, that women earn only 77 percent of what men earn for an equal day’s work (rather than for equal work).

A second set of reasons economists give for challenging the 77 percent figure is that the women and men being compared are not identical. More women than men have likely taken at least a year off from work in the past to take care of children, even if they are working full-time, year-round now. Also, more working women than working men are single parents. More married working fathers than married working mothers have stay-at-home spouses, allowing them to focus on full-time paid work.

Critics who cite these issues suggest it would be more accurate to compare single workers without children in restricted age ranges, where time spent working and work life careers are presumably more similar. But does it make sense to consider only subsets of workers? Shouldn’t women and men expect equal earnings when they provide equal effort and skill on the job whatever their age, marital, or parental status?

Yet another set of economists’ favorite reasons revolves around women’s choices. Perhaps women chose more family-friendly jobs that pay less, for example, because they provide more flexibility in exchange for the lower wages. Interestingly, data about the nature of jobs held by women and men cannot confirm this hypothesis. According to a recent survey IWPR conducted, single mothers have the least flexible jobs and college-educated white men the most flexible jobs.

Ms. Maddow was correct to point out that Mr. Castellanos is denying a reality that many women experience every day, lower pay than they deserve for the work they do. Many economists have been denying this reality for a long time. Let’s hope women’s voices and women’s votes in this election season make it clear that women’s lower wages must be addressed by stronger public policies.

Dr. Heidi Hartmann is the President of the Institute for Women’s Policy Research.

Facing the Wage Gap as a Female College Grad

IWPR Research Intern Vanessa Harbin

by Vanessa Harbin

As someone who considers herself to be pretty plugged in to gender issues, I have often heard the statistic about the ratio of women’s and men’s earnings, and figured I knew most of the story. The past few months I have been going merrily along pursuing job leads in preparation for graduation from my master’s program next month, without even considering how I personally might be affected by the wage gap. Surely, as a young woman with a graduate degree, my salary will be right up there with my male peers, right? Since I haven’t seen much difference in the jobs being pursued by and offered to my female and male classmates, isn’t it a given that we’ll be getting paid equally?

Then I began helping with the research at the Institute for Women’s Policy Research (IWPR) looking at trends in women’s earnings and labor force participation over the past few decades. First, I was surprised to learn that it wasn’t until 1984 that college-educated women earned as much as men with a high school diploma, and it took another seven years until they earned as much as men with some college education or an associate’s degree. Then, I saw the wage gap between men and women with at least a college degree—it’s the biggest gap between men and women at any level of education. And even though the gap for all workers in my age group (age 25 to 44) is the lowest in 30 years, it’s still almost 14 percent (according to IWPR’s micro data analysis of the Current Population Survey). Even when women get into highly-paid and fast growing sectors like science, technology, engineering, math (STEM) fields, they are paid 14 percent less than men—a much narrower gender gap than many other professions, but a gap nonetheless.

Yet, I know that I’m extremely lucky to be where I am. Women with low education and skill levels can not only expect to earn less than their male counterparts, but often struggle to make a livable salary. Men with poor literacy skills have substantially higher earnings than women with the same abilities. And even with higher literacy levels, women still face a wage gap.

Learning the statistics has shown me that the wage gap does indeed exist and impacts women’s earnings—even highly educated women.  It is important to be aware that the playing field might not be even and to inform policymakers about this persistent discrepancy in earnings. IWPR will be releasing an analysis of the latest data from the Bureau of Labor Statistics (BLS) on the wage gap with occupations.  Our research on pay equity will be discussed at an Equal Pay Day congressional briefing April 17 organized by the Fair Pay Coalition. If you can’t make the briefing, you can still stay informed on this issue by visiting our website.

Vanessa Harbin is a Research Intern with the Institute for Women’s Policy Research. She is currently completing her master’s degree in public policy at Georgetown University.

Life-Time Self-Sufficiency: Eight Things Every Young Woman Should Know

By Minjon Tholen and Heidi Reynolds-Stenson

An Institute for Women’s Policy Research study analyzing men and women’s earnings over a 15-year span found that women in the prime working ages of 26 to 59 made only 38 percent of what prime working-age men made during the same time span. This major gap is due to occupational segregation, discrimination, caregiving obligations, and other factors, and creates a critical obstacle for women’s economic security throughout their working years and into retirement. Depending on a woman’s socioeconomic status and race/ethnicity, this gap may be even larger. Here are eight things all young women need to know now to be self-sufficient later.

1. Education

Education levels are strongly associated with earnings. The median weekly earnings of bachelor’s degree holders are 65.8 percent higher than those with only a high school degree. Women increasingly recognize the need to further their education and now outnumber men among those graduating with bachelor’s degrees, yet women still earn less than men at every level of educational attainment.  Postsecondary education is therefore an important tool for young women to increase economic security over their lifetime.

2. Reproductive Choice

Since educational attainment is a major determining factor of one’s income levels throughout life, and completing high school or college is difficult to combine with child-rearing responsibilities, a woman’s ability to control her own reproductive life is crucial for her economic security. If you are in school and have children, familiarize yourself with and use the student parent support services available in your school and/or community, and advocate for more such services.

3. Occupational Segregation

Many women work in occupations that are traditionally female-dominated and are undervalued and underpaid compared to male-dominated occupations. As of the 1990s, after decades during which occupations increasingly became more ‘mixed’, further gender integration stalled. There are now proportionately fewer women in Information Technology occupations, which are generally well-paid, than there were 15 years ago. As a young woman choosing a career, explore non-traditional career options and keep in mind the implications your career choice may have for your ability to support yourself into the future.

4. Wage Gap

Women also earn less than men within nearly every occupation, indicating that occupational segregation is only part of the story. The gender wage gap begins early (with young women starting off at lower salaries than young men with comparable qualifications in comparable positions), widens over time, and can be larger or smaller depending on one’s race/ethnicity.  Part of the problem may be that young women are less likely than young men to negotiate for a higher starting salary or a raise.  Also, many employers work to keep pay information confidential; nearly half of all workers say they are either contractually forbidden or strongly discouraged from discussing their pay with their co-workers. Knowledge is power. So, talk to your co-workers, do research on average pay in your industry, and negotiate your salary. Know what you’re worth and ask for it.

5. Discrimination and Harassment

Research indicates that a significant portion of the wage gap within occupations cannot be fully explained by known factors—such as education or experience—suggesting that gender discrimination is still a significant barrier to women’s economic progress. Everyone has a right to a workplace free of discrimination and harassment based on gender or race/ethnicity. Know your rights under the law, familiarize yourself with the policies and protections at your workplace, and speak up when you feel these rights are violated.

6. Work/life balance

Although the majority of women are active in the workforce, they remain the primary caregivers to children and other dependents. Balancing work and personal life can be a struggle for many women and taking time out of work can have a long-term impact on your earnings and job security. Find out whether your employer offers flexible work arrangements and is subject to the Family and Medical Leave Act, in order to know your rights and responsibilities when balancing your work life and personal life.

7. Social Security

Compared to men, women rely on Social Security for a longer period of time (because they live longer) and depend on Social Security for a greater share of their income.  Yet, women receive, on average, significantly lower Social Security benefits due to a lifetime of lower wages and periods of decreased employment due to caregiving responsibilities for children, parents, or others. As a young woman, be aware that there is strong likelihood that you will live alone for at least part of your retirement. Educate yourself on how to maximize your Social Security benefits, strive towards ensuring other sources of income in retirement, and work to protect this program which is so vital to so many women and men.

8. Assets, Savings, and Pension Plans

Women face specific barriers to acquiring assets, building up savings, and investing in a pension plan. Women’s lifelong lower earnings due to occupational segregation, the wage gap, and caregiving responsibilities make it difficult to accumulate assets and savings. Women are also significantly less likely than men to have access to and participate in employer-sponsored retirement or pension plans. On top of these factors, women who do receive income from their own pensions receive on average less than half as much as men. To offset reliance on Social Security, start thinking about other ways to supplement your income in retirement early in your life and career.

Be cognizant of how gender inequality impacts your ability to be economically secure.  These inequalities are reflected in policies, institutions, and attitudes that affect all of us on a daily basis.  Know you have the ability to change this by educating yourself and others, and advocating for women-friendly policies. For in-depth studies on the issues described above and many others, visit the Institute for Women’s Policy Research research portal.

Minjon Tholen and Heidi Reynolds-Stenson are Research Interns at the Institute for Women’s Policy Research

Top 5 Recent IWPR Findings

By Jennifer Clark

When IWPR posted a “Top 5” list of our most revealing research findings in December, we were so encouraged by the level of interest our readers showed in the post, that we decided to turn it into a regular roundup. Although intending to compile another “Top 5” list, the first four months of 2011 were so action-packed that we couldn’t limit ourselves to just five. From Social Security to employment discrimination, here are the top IWPR findings from 2011 (so far):

1.       Without access to Social Security, 58 percent of women and 48 percent of men above the age of 75 would be living below the poverty line.  If you watch cable news, read reputable newspapers, or even tune in to late night television, you would get the impression that the Social Security system, which helped keep 14 million Americans over the age of 65 out of poverty in 2009, is broken. Social Security does not contribute to the deficit and is forbidden by law to borrow money to pay for benefits.  In fact, Social Security is actually running a surplus—a big one—at $2.6 trillion, an amount that is projected to increase to $4.2 trillion by 2025.

2.       Although many groups advocate for immigrant rights at the local, state, or national levels, very few advocate specifically for the rights of immigrant women. A new IWPR report, Organizations Working with Latina Immigrants: Resources and Strategies for Change, on the challenges facing Latina immigrants in the United States, explores the specific challenges faced by immigrant women—higher poverty rates than their male counterparts and greater risk of sexual, domestic, and workplace violence—and spotlights the organizations that are trying to help.

3.       The gender wage gap has narrowed only 13 percentage points in the last 55 years. With the ratio of women’s to men’s earnings stagnating at 77 percent in recent years, IWPR projected that, if current trends continue, the gender wage gap will finally close in 2056—45 years from now. In terms of how the gender wage gap breaks down by occupation, IWPR also found that women earn less than men in 107 out of 111 occupational categories, including female-dominated professions like teaching and nursing.

4.       Women’s career and life choices do not completely explain  the gender wage gap. IWPR’s new report, Ending Sex and Race Discrimination in the Workplace: Legal Interventions That Push the Envelope—a review of over 500 sex and race discrimination settlements –offers distressing evidence of the factors that keep women’s median earnings lower than men and keep women out of better paid jobs. These include discrimination in hiring, sexual harassment of women trying to work in male-dominated jobs, preventing women from getting the training that is required for promotion (or only requiring that training of women), and paying women less for the same work than men. The report finds that ensuring transparency in hiring, compensation, and promotion decisions is the most effective means for addressing discrimination.

5.       On-campus child care centers meet only five percent of the child care needs of student parents. IWPR’s report, Improving Child Care Access to Promote Postsecondary Success Among Low-Income Parents, explores the challenges facing 3.9 million student-parents, 57 percent of whom are also low-income adults, enrolled in colleges across the U.S. Costly off-campus care centers—in many states the cost exceeds median income—are unrealistic for many, leaving some student parents devoting up to ing 70 hours per  week to jobs and caregiving, leaving little time for classes or studying. Postsecondary education provides a path to firmer economic stability for low-income families, but without child care on campus, the path often seems more like an uphill climb.

6.       Both businesses and employees in San Francisco are generally in support of paid sick days, as the nation’s first paid sick days legislation sees benefits four years after passage. San Francisco’s Paid Sick Leave Ordinance (PSLO) went into effect in 2007.  Four years later, IWPR analyzed the effects of the ordinance in the new report, San Francisco’s Paid Sick Leave Ordinance: Outcomes for Employers and Employees, which surveyed over 700 employers and nearly 1,200 employees.  Despite claims from opposing groups that this kind of legislation is bad for small businesses, IWPR’s survey found that two-thirds of employers in San Francisco support the law, including over 60 percent of employers in the hotel and food service industry.

Jennifer Clark is the Development Coordinator with the Institute for Women’s Policy Research.

A Partial Fix for Closing the Wage Gap: End Segregation in the Labor Market

by Barbara Gault

So, the wage gap is still going strong, even though women have surpassed men in terms of number of higher degrees received. Women are now more likely than men to get bachelors’ degrees, master’s degrees, and Ph.D.’s. Is it just a matter of needing time to catch up?

According to recent IWPR statistics, at the current rate of change it will take until 2056, or 45 more years, until we see equality. How do we accelerate change? One method is to equalize access to high paying jobs.

As IWPR’s new fact sheet, shows, the most common jobs for men and women are quite different. Of the ten most common jobs for men and women, there is overlap in only one. The best paid professions which are more common to  men are Chief Executive Officer (CEO), computer software engineer, and manager; the best paid professions more common for women are accountants, registered nurses, and elementary and middle school teachers. In the ten lowest paid occupations, close to two-thirds of workers are women, and in the highest paid occupations, two-thirds of workers are men. The proportion of women who are machinists, carpenters, and electricians hovered at below 10 percent between 1972 and 2009. Fewer than 10 percent of civil engineers were women in 2009.

And sex segregation is not improving. The index of dissimilarity, a tool that economists use to measure the degree of sex segregation overall in the labor market, found that in the 37 year period between 1972 and 2009 we saw progress in this area for the first 25 years, and then progress essentially dropped off starting in 1996 and continues to stagnate.

Women’s representation in some high paying fields, notably computer science, has actually gotten worse. Segregation in the labor force is a natural by-product of sex segregation in educational focus. Whereas in 1989 women were more than 30.2 percent of computer science bachelor degree recipients, in 2008 they were only 17.6 percent. Similarly, the proportion of math bachelor degree recipients that were women dropped in that same time period, from 46 to 43 percent. Engineering bachelor degrees increased, but only slightly, from 15.2 to 18.5 percent. On the other hand, women receive more than 70 percent of psychology degrees, and they are also the vast majority of degree holders in education.

We see the same gendered patterns in receipt of associates’ degrees. The percentage of women receiving associates degrees in computer and information sciences, engineering and engineering technology, and math and science, all dropped between 1997 and 2007.

An analysis released by IWPR yesterday found that of 111 occupations for which we had sufficient data, women earned less than men in 107 of them. These within-occupation wage gaps do reflect pure discrimination, but sex segregation can of course occur even within occupations. One of the largest wage gaps we found was in retail sales, where women only earn 64.7 percent of what men earn. 

In the Walmart vs. Betty Dukes case currently before the Supreme Court we hear stories of differential retail sales assignments being used as a justification for paying men more (men work in the tools department, which pays more, and women work in the cosmetics department, which pays less).

To end occupational segregation and the wage gap, there are clear steps that employers, policymakers, and even teachers and parents can take:

  • Education: Encourage girls and women to go into nontraditional, higher paying jobs.   The National Girls Collaborative provides access to an array of programs encouraging girls to pursue careers in fields of Science, Technology, Engineering and Math (STEM).
  • Unionization: Improve access to unions.  Unionized jobs have lower wage gaps.
  • Enforcement: Address issues contributing to hostile work environments through Department of Labor and Equal Employment Opportunity Commission (EEOC) interventions in order to eradicate this problem. Investigate common occupations with the highest sex segregation, and those with most profound wage gaps, as these are likely to be hotbeds of harassment and hostility.
  • Awareness: Address the unequal division of caregiving work.  The recent White House Women in America report found that women still do more housework and child care work, allowing men to spend more time at paid work and leisure.  IWPR’s research found that even teen girls shoulder an unfair burden of care for siblings and housework, while boys spend more time at leisure.
  • Support: Build greater family supports for workers and learners, including expanding support for student parents, who make up roughly a quarter of students at colleges and universities.
  • Development: Think of ending inequality as a key component of sustainable community development by working to make communities family friendly: include child care as a part of city and state economic development plans, and co-locate child care with public transportation and housing.  For ideas like these, check out the Cornell University’s website on child care and economic development with useful tools including those for assessing the economic development importance of child care to communities.
  • Advocacy: We need a whole new wave of kitchen table advocacy and consciousness-raising on the pervasiveness of sex discrimination.   Some argue that Walmart shouldn’t be held responsible for sex discrimination because the problem is too widespread throughout the whole society.  We somehow managed to desegregate schools and universities even though segregation was widespread at one point in our history. We need to approach unequal pay the same way.
  • Communication: The Paycheck Fairness Act was not passed this year, which would have outlawed retribution for sharing salary information – but we can use the anonymity of the Internet to share such information with one another through discussion forums, blogs and social media.  Also, women need to join forces to address the unequal distribution of labor within the home.
  • Negotiation: And we do need to negotiate, but not because it will make us any allies in the short term, but as a form of advocacy.  When women negotiate like men, it is not always met with a warm reception.  Negotiate as an act of solidarity, so that  we’ll all get used to it, and gradually shift our stereotypes of how nice women workers are supposed to act.

Barbara Gault is the Executive Director and Vice President of the Institute for Women’s Policy Research.

A College Student’s Take on the Gender Wage Gap

By Lauren Hepler

In honor of Equal Pay Day, IWPR intern Lauren Hepler observes the impact of the gender wage gap as she looks to start a career after college.

In this economy, it is very scary to be a college student getting ready to graduate in just one short year. And with media profits tanking, it is even more daunting to be a journalism major set to graduate in 2012. Sadly, it is worse to be a female journalism student set to graduate knowing that women still only make an average of 77 percent of men’s yearly salaries (according to median yearly earnings in 2009).

Family friends of college grads, professors, and anyone who knows one—or follows one on Facebook— are curious about where we will land our first real jobs. With unemployment among people age 20-24 at 15.4 percent and showing no signs of easing, I would imagine that many other college students share my unsentimental notions on the issue. I will work wherever I can get a job.

This anxiety about finding any job at all often obscures the reality that we are still confronted with: Women make only make 77 percent of men’s median yearly salaries.

For a student used to living on a shoestring budget, the potential financial impact of the gender wage gap is daunting. On average, monetary losses due to the wage gap over a lifetime add up to $700,000 for a high school graduate, $1.2 million for a college graduate, and $2 million for a professional school graduate.

That is not chump change. That is money that could be spent paying back overwhelming student loans, financing homes or generally saving for the future—all things young people are constantly told to do but often can’t because of budget constraints.

Unfortunately, it appears this cash will not be materializing anytime soon. According to new IWPR research, if progress continues at the current rate, it will be 45 more years (or the year 2056) when men’s and women’s wages finally balance out.

In fact, one of the most alarming facts about the gender wage gap is that the rate of progress is actually slowing down (despite a small gain in the number of women in management positions). From 1980 to 1993, the gender wage gap narrowed by 12.9 percent. But in the 16 years from 1993 to 2009 the gap narrowed a meager 3.1 percent.

College history classes often hark back to the 1960s as the tipping point for gender discrimination, praising the shattering of the glass ceiling for women in the workforce. Now, half a century later, how far have we really come?

The Gender Earnings Ration 1955-2010 (click to enlarge)

In 1960, women, on average, earned only 60 percent of men’s wages for a year of full-time work. In 2009 that number had risen to 77 percent, with women still making almost a quarter less than their male counterparts.

And that’s just the national average. The numbers are even more jarring when comparing state-to-state, or across racial and ethnic categories.

In Wyoming, for instance, women still make just 64 percent of what men earn in a year. West Virginia and Louisiana are only slightly better, at 67 percent, which is roughly equivalent to the national average in the late 1980s.

As a percentage of white men’s yearly earnings Asian women average 82.3 percent, while white women average 75 percent, black women 61.9 percent, and Hispanic women just 52.9 percent of what a man earns.

Despite the bleak outlook for the immediate future, actions are being pursued to correct the imbalance in the gender wage gap, with the Supreme Court last week hearing arguments on the Dukes v. Wal-Mart gender discrimination case.

And there is a need for urgency on the issue.  A report by the American Association of University Women (AAUW) Educational Foundation shows that the gender wage gap starts early in a career and then widens dramatically. Just one year out of college, female graduates on average make only 80 percent of their male counterparts’ salaries. Ten years down the road, the report found that the gap widened, with women receiving just 69 percent of men’s earnings by that point in their careers.

This phenomenon is even more counterintuitive considering that in the last decade women have consistently outnumbered men at American colleges, with women averaging about 57 percent of enrollment. Despite making huge gains in education and being better prepared than ever to enter the workforce, complacency on the gender wage gap continues to hamper the careers of American women.

As a student preparing to go on the job hunt, I know I am not exempt from this problem. However, I certainly don’t want to wait until I reach retirement age (I will be 66 in the year 2056) to get the same pay as men in my field.

Lauren Hepler is the Communications Intern at the Institute for Women’s Policy Research. She is majoring in journalism and women’s studies at George Washington University.

Go to Home Page