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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.

Bridging the Gap: Bringing the Benefits of Paid Family Leave to American Workers #FAMILYAct

by Lindsey Reichlin and Stephanie Román

ImageImageThis blog post was crossposted at MomsRising.

In its founding year, the Institute for Women’s Policy Research (IWPR) analyzed the costs to workers of not having unpaid leave for childbirth, personal health needs, or family caregiving in its inaugural publication, Unnecessary Losses: Costs to Americans of the Lack of Family and Medical Leave. IWPR’s research showed that, by not recognizing the  need for work-life balance, established policies not only failed to support workers and their families, but were costly to taxpayers.

Now 20 years old, the Family and Medical Leave Act (FMLA) has become a cornerstone of U.S. employment law and human resource policy. But the law stopped short of ensuring true protection to workers: the FMLA only guarantees unpaid family and medical leave for employees, complicating the economic security puzzle for many workers in the United States.

Today, most U.S. employees still lack access to paid family leave. While the FMLA requires that employers provide up to 12 weeks of unpaid job-protected care leave for eligible workers, the lack of a paid parental leave statute means the United States is one of only four countries in the world  without publically sponsored paid maternity leave. Paid family leave can bring important benefits to both families and businesses. Yet, many parents with unpaid leave are forced to choose between financial stability and caring for their newborns.

In 2012, only 35 percent of U.S. employees had access to paid family leave to care for newborns, adopted children, or sick family members.[1] The lack of access is even more pronounced for lower income earners: only five percent of the lowest paid workers had this option. Workers with the least financial security, and therefore the least flexibility to go without pay, often do not have access to income when taking time off for caregiving duties. As a result, the burden of unpaid leave can be too much for many women to bear: almost two-thirds of those who needed but did not take unpaid family leave in 2012 were women.

Expanded access to paid leave would mean substantially increasing the amount of time parents take for caregiving. The impact of the Paid Family Leave program in California, available equally to women and men, gives insight into the difference a paid leave statute could make on a larger scale: the program has doubled the length of leave parents–especially low-income parents–take to stay home with their newborns. It has also significantly increased the number of fathers who take advantage of parental leave, even increasing the length of leave they choose to take.

The time parents spend with young children is crucial for their health and development. When that time is paid, the benefits are even greater. Studies show that paid family leave can dramatically decrease mortality rates for infants and children under age 5, a reduction that does not hold for leave that is unpaid or not job-protected. Paid family leave also increases the initiation and duration of breastfeeding, which can reduce children’s risk for serious illnesses, and improve their cognitive development.

Working women, in particular, stand to benefit from paid family leave. Paid leave could help narrow the persistent wage gap that continues to plague working women. Women who take paid maternity leave have seen an increase in wages and depend less on public assistance in the year after giving birth. Paid maternity leave also keeps women in the workforce, which increases the productivity of the labor force overall, and could potentially improve gender equality both in the home and at work.

Paid family leave has the potential to bring important economic benefits to the country as a whole, as well as to individual businesses. Providing paid leave to federal employees, for example, would save the government and taxpayers $50 million dollars per year in turnover costs by improving recruitment and retention of younger employees. Private industry also benefits from the reduction in costs related to recruiting, hiring, and training. Women in California, particularly those in low-wage jobs, were shown to be more likely to return to the same employer following paid maternity leave than those who did not have access to paid leave.

The myriad benefits of paid family leave are clear. And while a handful of states have passed policies that go beyond the federal requirements, there is much to be done to fill the gap left by FMLA and ensure all workers reap the many benefits of paid family leave. The FAMILY Act represents an important opportunity to do just that by instituting family leave insurance for workers. By allowing parents to care for their loved ones without fear of losing their jobs or incomes, the United States would better support the well-being of its workforce, while simultaneously realigning its priorities with the global norm: providing vital paid family leave to its workers.


[1] A variety of data sources measure paid leave coverage rates and some debate exists over which source provides the most accurate picture. This post uses the Department of Labor’s 2012 Family Medical Leave Act survey, which surveys workers and worksites on provision and access to paid leave for parental purposes.

 

Lindsey Reichlin is the Research & Program Coordinator at the Institute for Women’s Policy Research and Stephanie Román is the Mariam K. Chamberlain Fellow at 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.

Living on a Dime: Small Wages and Large Gender Wage Gap in Restaurant Industry, According to Recent Report

By Margaret Kran-Annexstein

If I were to tell you that there are workers in the United States being paid $2.13 per hour, you’d probably tell me that that’s impossible because the minimum wage in this country is $7.25 and anything less is illegal. Well, you’d be right of course, but unfortunately, regulations on the tipped minimum wage have not kept up with the federal minimum wage.

In February, the Restaurant Opportunities Centers United (ROC-United), in conjunction with the Institute for Women’s Policy Research and a number of other organizations, released Tipped Over the Edge: Gender Inequality in the Restaurant Industry. Among its other findings, this report exposes the restaurant business as an industry that has found a way to skirt the federal minimum wage, exacerbate the gender wage gap, and further reduce the economic security of employees by not providing health insurance or paid sick leave to most workers.

In 1991, the tipped minimum wage was 50 percent of the federal minimum wage. However, when the federal minimum wage increased in 1996, the tipped minimum wage remained the same and has not been adjusted. Today, under the Fair Labor Standards Act, the tipped minimum wage remains at $2.13 an hour, less than 30 percent of the generally accepted $7.25 federal minimum wage. Although some states choose to raise that minimum, these regulations allow the restaurant industry to shortchange a vast number of its employees—a disproportionate number of whom are women.

As a student with many female friends working in the restaurant industry to help pay enormous tuition bills, I was disturbed by the findings of this report. The reality is that tipped workers often must rely on the generosity of their customers to make a living. Technically, employers are supposed to pay the difference if a worker does not make the minimum in wages plus tips but this requirement may not always be upheld or enforced. As one woman from Fort Worth, Texas testifies, “I can’t tell you how many times I made less than $20–$40 a day during the lunch rush…LOTS…I don’t understand how restaurants get away with not paying their employees minimum wage…”

Gender Segregation in the Dining Room

The notion that women and men should be paid equal wages is also overlooked due to hiring practices in the restaurant industry that solidify the gender wage gap. Female restaurant workers make on average 79 percent of what men do because women tend to hold the lower-paid positions in the restaurant world.

Women, especially women of color, hold a disproportionate amount of jobs in lower-paying restaurants while men dominate fine dining establishments—where wages can be 24 percent higher than wages in family style restaurants. Women who do obtain positions in fine dining are seldom hired as captains or martre d’s, the higher ranking, cushier positions with more supervising duties and less reliance on tips. One account from Tipped Over the Edge quotes a general manager refusing to hire a qualified women of color saying, “You don’t have the look to be a maître d’, but I can hire you as a hostess.”

There are laws that effectually set in stone wage inequality because these different ranks in restaurants hold different minimum wage requirements (the restaurant industry is one of the only sectors where you can find this discrepancy).

Many restaurant workers simply do not have enough money to support themselves: servers are forced to use food stamps at almost double the rate of the rest of the population. Rather than hold employers accountable to their staff, taxpayers have become responsible for the livelihood of many employed people through the size of their tips and the generosity of state programs.

“Try Not to Get Sick”

Not only do many restaurant workers receive painfully low wages, they often cannot afford to stay home when they get sick. In fact, ninety percent of restaurant workers lack paid sick days. One testimony from Tipped Over the Edge quotes a laughing manager telling a sick employee, who was concerned that if she did not go home she would make others sick, to “try not to cough.” Ninety percent of restaurant employees also lack employer-covered health insurance, making it even more difficult for them to seek medical care. Not only is this a violation of workers’ rights, it doesn’t make me feel very safe when I go out to try the best veggie burgers in DC.

My friends have to work in these unfair conditions but, unlike many restaurant workers, they have health insurance from their parents and are not providing for dependent children. For a single mother supporting a child on her own, Tipped Over the Edge shows that the restaurant industry can be a hostile work environment that lacks adequate living wages. Clearly change needs to come to the restaurant industry.

Margaret Kran-Annexstein is a Communications Intern with the Institute for Women’s Policy Research.

Literacy, Women, and the Workforce Investment Act

This blog was originally posted on the Workforce Innovation Team blog. In honor of March being Women’s History Month 2012, the Workforce Innovation Team has reached out to their partners who specialize in women’s needs and promoting positive public policy. 

By Jane Henrici

The Institute of Women’s Policy Research (IWPR) released in February our fact sheet showing our gendered analysis of the most recent (2003) National Assessment of Adult Literacy (NAAL) data. We find that low levels of literacy tend to hurt women’s earning levels more than those of men: “…women need higher levels of literacy than men to earn wages that are comparable with men’s.”

To address this issue, IWPR recommends that educational policies and programs take gender into account and consider adult education and literacy classes as of particular help to women, especially those with dependent children. IWPR research on women’s educational levels, workforce participation, and immigration integration, also finds a need for improved and targeted remedial and bridge opportunities, English language classes, and job training that will help women get better jobs and careers—including those at the highest levels of wages, in STEM fields. Like others with whom IWPR is partnered, particularly in our research on student parents as part of IWPR’s Student Parent Success Initiative, we see reauthorization of the Workforce Investment Act (WIA) as an opportunity for learning and training that responds to the needs across the different states to help prepare women workers for employment demands.

To get out of poverty, women must be able to earn enough to take care of themselves and their families and, to do that, women need to have the skills to begin careers and then move up in fields where jobs are growing, including those in the health and care work occupations. At a minimum, women are going to need to be able to read and, increasingly, they are going to need a postsecondary education and possibly a postsecondary degree. A number of public as well as private efforts, including WIA programming, can help women to get started.

Do you think WIA programming is key to addressing the inequality gap that women still face in today’s workforce?

Jane Henrici is a Study Director with the Institute for Women’s Policy Research.

Women Workers in a Post-Walmart World

By Katherine Kimpel

Last week, the Supreme Court issued a decision that makes it harder for women in the workplace to protect their rights to be free from discrimination.  In reaching their decision in Dukes v. Walmart, the Justices—the five men who wrote the majority opinion, notably overruling the objections of all three women on the court— assumed that discrimination in the workplace just doesn’t really happen that much anymore. But Supreme Court Justice Antonin Scalia and the other men on the court didn’t cite any evidence, didn’t refer to any studies, or even bother to tell any anecdote to back up that claim. They didn’t bother to contend with the fact that individuals and government agencies continually litigate, prove, and then settle or win employment discrimination cases—cases that show that discrimination is, alas, alive and well.

For example, just last year a jury in New York federal court delivered a unanimous verdict against Novartis Pharmaceuticals Corporation, finding that the corporation had discriminated against female employees in pay and promotions, and had discriminated against pregnant employees. Although the over $250 million dollars resulting from that verdict was significant, even more important were the 23 pages of changes to policies and procedures that the company later agreed to in order to settle the case.

You see, the brave women who stood up to Novartis to bring that lawsuit helped more than themselves.  They helped the other women at Novartis, by getting the company to change. They helped other women working in the pharmaceutical industry, by sending a message to employers that discrimination will not be tolerated and that litigation can result in just and heavy penalties. And they helped the government, by holding a global corporation accountable to our federal civil rights laws.

Congress knew, when drafting the civil rights laws, that we could never expect the government to shoulder enforcement by itself. They created a system where individual Americans could stand up and act as private attorneys general—essentially privatizing, in part, the enforcement of equal opportunity. However, had last week’s Supreme Court decision in Dukes v. Walmart been the law of the land in 2010 when Novartis was decided, the brave plaintiffs in the case may not have been successful, and the changes at Novartis may never have happened.

For women workers in a post-Walmart world, it is undeniable that the scales are weighted more heavily in favor of corporations, scaling back the progress for which our mothers, grandmothers, and great grandmothers fought so valiantly. That sad fact does not relieve us of responsibility; instead, it simply means that we will all have to fight harder and with more determination than before.

On a day-to-day basis, this fight takes shape in advocating for yourselves in negotiating starting salaries, demanding rightful raises, and pushing aggressively for promotions. This fight takes shape in developing trusted coworkers who will help you benchmark your compensation and better understand the ladders to success. This fight takes shape in keeping detailed records of all of this and of your employers responses, good or bad, so that if the day comes when you or they need to get outside help, you’re ready. This fight takes shape in refusing to be silent when you or a coworker is underpaid, passed over for promotion, subjected to harassment, or disproportionately disciplined.

All of those things are necessary and good, but they are not enough. Women workers— indeed, all workers—in a post-Walmart world need to be proactive about this affront to our fundamental right to equal opportunity. Educate family and friends, write letters to your local paper, and contact your elected representatives to let them know you’re paying attention, you’re concerned, and you expect the Supreme Court’s over-reaching on behalf of corporations to be corrected.

Justice Scalia and the four other men of the majority got it wrong when they assumed that our world is a better place than it is, when they assumed that discrimination doesn’t happen anymore. They got it wrong when they decided that protecting corporations was more important than protecting individual Americans, be they men or women of any race. But the underlying faith in people wasn’t entirely misplaced. Every day, I work with men and women whose bravery to stand up for what is right inspires me. The moment now calls for the rest of us to also stand up to a Supreme Court that has gone too far.

Katherine M. Kimpel is a Partner of Sanford Wittels & Heisler, LLP, a national law firm with offices in Washington, D.C., New York, and California.  Ms. Kimpel received her law degree from Yale Law School in 2006. She served as class counsel in the Velez v. Novartis gender discrimination case and authored the amicus brief on behalf of the U.S. Women’s Chamber of Commerce in Dukes v. Walmart. Before joining Sanford Wittels & Heisler in 2007, Ms. Kimpel served as Special Counsel to Senator Russell Feingold on the Senate Judiciary Committee, where she handled criminal justice and other civil rights issues for the Senator.

Healthy Families Act Hearing

HFA Hearing Photo
Dr. Jody Heymann, Heidi Hartmann, Dr. Rajiv Bhatia and Mr. G. Roger King (Photo by Michelle Schafer)

On Tuesday February 13th, experts and Senators alike braved the wintry District weather to attend a hearing on the Healthy Families Act. Senator Kennedy, Chairman of the Health, Education, Labor, and Pensions Committee sponsored a hearing to discuss the need for the Healthy Families Act. Dr. Heidi Hartmann, IWPR’s President, was among those invited to testify. One of her strongest arguments for paid sick days for families included a study done by IWPR that found employers would save an estimated 9 billion dollars in turnover costs. The logic behind this figure is that workers with paid sick days will be more likely to retain jobs therefore lowering the cost of rehiring for their positions by 43%. IWPR’s research provides the best reasoning for why the Healthy Families Act actually benefits businesses, an issue that Senators Enzi (WY), Isakson (GA), Allard (CO) seemed to be most concerned with.
Dr. Hartmann also reminded Senator Enzi and the committee that passing the Healthy Families Act would actually have a positive effect on wage inequity between men and women. Achieving pay equity has been a goal of Senator Enzi’s and of other committee members in other legislation, the Workforce Investment Act among others. Dr. Hartmann emphasized the importance of family leave for women who are often the primary care givers of children and the elderly. With seven paid sick and family care days to be provided by their employers, women would be more able to take a day to care for themselves or a family member without the fear of losing their jobs, a change that will help them retain their jobs and become eligible for seniority-based wage increases and promotions, thus leading to wage increases and contributing to narrowing the wage gap.
Dr. Jody Heymann argued for the Healthy Families Act through an analysis of international competitiveness. Her statistics showed interestingly enough that although the US is among the top 20 most competitive economies in the world, we are the only one without paid family leave. She said that 145 countries provide such leave and that 100 of them provide a month or more for employees. Senator Sanders (VT) seemed most impressed with the international comparison data, while Senator Brown (OH) asked about the data on cost savings.
The hearing was well attended by Acorn members and representatives of various women’s groups. All the Senators and witnesses spoke in favor of paid sick days (it’s hard to be against them), but one witness and several Senators expressed concern that it would cost too much and drive away business. The record was left open so that further questions could be addressed by the witnesses.
- Elisabeth Crum

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