America’s working women get paid less than men, to the tune of 77 cents on the dollar. Or maybe it’s actually more like 95 cents on the dollar. (Stay tuned, we’ll try to shed some light on this.)
The pay gap burst back into news headlines this week, not because of anything instigated by President Obama or Congress, but because an actress spoke out about it at the Academy Awards.
“To every woman who gave birth, to every tax payer and citizen of this nation: We have fought for everybody else’s equal rights. It’s our time to have wage equality once and for all and equal rights for women in the United States of America,” Patricia Arquette said when receiving the best supporting actress award for her role as a mom in the film, “Boyhood.”
Meryl Streep was among those in the ceremony audience who cheered this line, and many American women and men used social media to join the chorus of support for addressing the issue. The US Labor Department also came out in support of Ms. Arquette's speech on Twitter.
So, how big is the pay gap, really? Democrats have cited “77 cents” (per dollar earned by men) in endorsing new legislation. Many Republicans argue the issue is largely a statistical sham and that liberals are just playing a politically motivated “gender card” with female voters.
The facts are complex, though, in contrast to either of those summaries.
Some prominent researchers on the issue say the 77-cents figure is very misleading, but that concern about pay discrimination can’t be brushed entirely aside, even though America has had an Equal Pay Act on the books since President Kennedy signed it in 1963.
Key facts behind this debate include:
The 77-cents starting point. The Obama administration publicizes the statistic that a typical woman’s pay is 77 or 78 percent of a man’s pay. This is a raw average of what full-time working women make, compared with full-time working men. Critics say this number makes no effort to adjust for whether people are working in similar occupations, have similar responsibilities, or have similar levels of experience. Proponents of new legislation say this number, while admittedly a simplistic view, is still meaningful symbol of the need for action.
The alternative ‘reality.’ Some researchers have concluded the pay gap is more like 95 cents on the dollar, if you compare women with men who have similar occupations, similar levels of education and work experience, and similar “attachment” to the workplace (factoring in career interruptions and hours worked). That figure comes from a 2009 report prepared for the US Labor Department by CONSAD Research Corp. in Pittsburgh. Another 1990s analysis tried to take total compensation into account (including not just wages but also benefits including parental leave and employer-paid child care), and saw the gender gap being smaller still – on the order of 3.6 percent at that time.
The alternative reality, debated. If the gender gap is really more like 5 percent, or less, then it might not be viewed as a cause worthy of an impassioned Oscar-night appeal. It would become hard to say how much of the residual difference stems from illegal discrimination, and how much relates to other factors. “There may be nothing to correct,” a Labor Department official wrote in a preface to the 2009 CONSAD report. But lots of people say this view is also too simplistic.
Betsey Stevenson, a labor-market expert serving on the White House Council of Economic Advisors, agreed in a 2014 MSNBC interview that “77 cents on the dollar is not all due to discrimination.”
But then she added: “When people come out and say that’s not a fair number, well, what really is a fair number? You brought up ‘women’s choices.’ Well, some women’s choices come about because they’re being discriminated against. Some of women’s choices come because they experience sexism. Some of women’s choices come because they are disproportionately balancing the needs of work and family. Which of these choices should we consider legitimate choices, and which of them should we consider things that we have a societal obligation to try to mitigate, to alleviate some of these constraints so that they can make different choices? A lot of people will say things like, let’s control for occupational choices. But the research is showing us that women are choosing occupations which penalize them the least for taking time out of work.”
A summary of the pay-gap issue by analysts at the Federal Reserve Bank of St. Louis carried the title, “Gender Wage Gap May Be Much Smaller Than Most Think.” But the 2011 analysis also took note of how many women end up working in relatively lower-paid occupations:
“There are still significantly fewer women in highly paid occupations,” Natalia Kolesnikova and Yang Liu wrote. “Men are more likely to be lawyers, doctors and business executives, while women are more likely to be teachers, nurses and office clerks. This gender occupational segregation might be a primary factor behind the wage gap.”
Ms. Stevenson argues that workplaces with less discrimination and policies that more actively welcome women would change that segregation pattern. More women would choose different occupations – and that would affect the “77-cents-on-the-dollar” gap in pay.
Progress, so far. Women have made progress on the pay front in recent decades. A White House chart shows the pay gap was about 65 cents on the dollar in 1987.
Young women entering the work force in 2012 were paid hourly wages 93 percent as large as men’s, up from 67 percent in 1980, according to government data compiled by the Pew Research Center.
And today, women emerging from their college years are also outperforming men in educational attainment, which can be a harbinger of higher earning power to come.
Yet the progress doesn’t remove the questions surrounding wage fairness.
The share of women who say society favors men was still a majority (53 percent) as of 2013. Although that’s smaller than the 71 percent of women who said that in 1993, the pace of pay gains for women (relative to men) has been slow since then.
Women who become mothers remain far likelier to have career interruptions than men. Women also continue to do a larger share of household work, a sign of the challenges of work-life balance they face.
Democrats including Mr. Obama have called for Congress to pass a Paycheck Fairness Act to enhance the protections of the Equal Pay Act by ramping up penalties and closing loopholes that can allow employers to maintain unequal practices. This might help women fight discrimination in court and also nudge employers toward greater wage transparency, some analysts say.
But many policy analysts call for additional steps to address gender inequities in the workplace. Policy experts at the left-leaning Center for American Progress, for example, urge government investment in making child care and early education more accessible, coupled with steps to widen the availability of paid sick leave and paid family leave for workers.