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 has 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 the 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.  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.

Jump Starting Real Wage Growth for Women: Increasing the Minimum Wage and Improving Overtime Laws

By Heidi Hartmann

In the context of a lost decade of wage growth for women, two recent proposals—to increase the federal minimum wage to $10.10 per hour (including increasing the separate minimum wage for tipped workers), and to increase the threshold salary for overtime pay to $50,000 annually—can provide much needed relief to women.  

Increasing the minimum wage requires that the U.S. Congress pass a law. The current minimum wage of $7.25 was set in 2007and went into effect in 2009, but President Obama has already acted by executive order to require firms that hold contracts with the federal government to pay their workers a minimum of $10.10 per hour.  In contrast, increasing the salary threshold for receiving overtime pay, does not require congressional action, but does require action by the Secretary of Labor. President Obama has recently directed Secretary Perez to consider what can be done to ensure that workers are paid fairly for their overtime hours. The Fair Labor Standards Act sets the overtime pay premium at 50 percent more than the regular wage or salary, also known as “time and a half.” Currently the threshold annual salary is set at about $23,000 ($455 per week).  A worker classified as executive, administrative, or professional, who earns more than that annual salary does not currently need to be paid overtime.

Because women earn less than men on average, it is not surprising that women are the majority—64 percent—of those who earn the minimum wage and would thus benefit disproportionately from an increase in the minimum wage.  Economists expect that employers will also increase the pay of workers earning somewhat above the minimum, in keeping with past experience of minimum wage increases.  An EPI analysis shows that 15.3 million women—9.6 million directly and 5.7 million through the spillover effect— would receive a pay increase were the minimum wage to be raised to $10.10 per hour.  EPI also finds that nearly one-third of all working single mothers—or 2.3 million women—would receive a direct or indirect pay increase. Overall 55 percent of workers who would benefit from the increase are women.

A new report from the White House released earlier this morning points out that an even larger proportion of those affected by the tipped minimum wage—which has been stuck at $2.13 per hour since 1991—are women:  72 percent of tipped workers are women in occupations such as hair stylists, restaurant servers, and bartenders.  Employers need pay such workers only $2.13 per hour on the assumption that tips will raise their pay to the required $7.25 per hour.  According the White House report, about 10 percent of workers in these jobs say that does not happen.  The average wages of tipped workers are very low and their likelihood of being in poverty is high.  The White House analysis finds that about half of workers in tipped occupations would benefit from the proposal to increase the tipped minimum wage to $4.90 per hour by 2016. Of those whose wages would increase, 74 percent are women.

Likewise, women are the majority (54 percent) of all supervisory, managerial, and professional workers earning less than the proposed new overtime threshold of $984 per week, meaning that 5.3 million women would be newly covered by a requirement to be paid overtime when they work more than 40 hours per week. Currently, about 1 million of these women typically work more than 40 hours per week and would have to be paid 50 percent more for those additional hours beyond 40.   Furthermore, of all those high-level workers who earn above the new threshold and would not be required to be paid overtime, only 37 percent are women.  (Findings reference an unpublished analysis by EPI’s Heidi Shierholz.)

These two changes—the first by law, the second by regulation, and both administered by the Wages and Hour Division of the U.S. Department of Labor—would help ensure that real wages rise for millions of women, not to mention many men, in the coming decade.  In its new report the White House estimates that the minimum wage change alone would close the wage gap between women and men by more than one percentage point.

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

The Lost Decade of Wage Growth for Women

by Heidi Hartmann

Twice a year, the Institute for Women’s Policy Research (IWPR) updates its fact sheet, “The Gender Wage Gap,” to report the latest data as they become available from the Bureau of Labor Statistics and the Census Bureau.  This year, we noticed something new when we added the latest figure for median weekly earnings for men and women who work full-time—a virtual standstill in women’s real wages for the past ten years. This was true when looking at trends in both usual weekly earnings and annual earnings for those who work full-time, year-round.

For several decades, as new Fed chair Janet Yellen notes, women have been the success story in the economy. Women increasingly pursued higher education, eventually surpassing men in college graduation rates. Women also joined the labor force in larger numbers, worked more throughout their lives, and entered a variety of occupations that had been formerly virtually closed to them, becoming  bus drivers, mail carriers, fire fighters, police officers, bankers, lawyers, doctors, and many others.

These gains in education and work experience (what economists call human capital) contributed to narrowing the wage gap, and the equal opportunity legislation of the 1960s and 1970s helped too. The gender wage gap closed from 40 percent in 1960 to 23 percent in 2012 (in terms of annual earnings). Women’s real earnings—meaning wages adjusted for inflation—grew as well, from $22,418 in 1960 to $28,496 in 1970, $30,136 in 1980, $34,247 in 1990, $37,146 in 2000, and $38,345 in 2012.

In contrast, men’s real earnings have not grown since about 1975, although men’s real earnings have remained higher than women’s. In that year, men’s earnings were $50,093 (in 2013 dollars) and in 2012, they were $50,122.  In other words, men have had nearly four decades of stagnant wages.  Explanations for this are many, but the most persuasive in my view is that, for a variety of reasons stemming from institutional and policy changes, the productivity gains that the U.S. economy has enjoyed have simply not been passed on to workers (except those at the very top). Ordinarily, we economists expect workers’ wages to grow along with GDP growth and productivity growth (more output per hour worked).   In the modern economy, men’s real wages have simply failed to thrive.

Women’s real earnings, however, did grow, until about 2002 when they too caught “real wages failure to thrive” disease. What caused this stagnation for women? Economists Francine Blau and Lawrence Kahn from Cornell University have described women’s success in the labor market as “swimming upstream.” Women were able, for several decades, to overcome the forces that have been generating increased economic inequality in America. By increasing their human capital and gaining access to new, better paid  occupations, firms, and industries, women were able to achieve a significant degree of equality with men, despite trends pushing the top and the bottom further apart.

Now it seems as if the current is finally overpowering women, making it increasingly difficult for them to swim upstream. This is not to say that discrimination is any worse than it has been in the past, but progress in reducing discrimination is no longer being made.  As IWPR’s fact sheet shows, women’s annual earnings in 2012 are slightly less than they were in 2001, at $38,438.  Women’s weekly earnings at $706 in 2013 are about the same as they were in 2004, at $707.

What is to be done?  I believe only a major policy shift, similar to what occurred in the 1960s and 1970s, with the Equal Pay Act (1963), the Civil Rights Act (1964), and Title IX (1972), will be able to get women’s wages back on track.  The changes needed fall into four areas:  1) better enforcement of existing equal employment opportunity (EEO) laws and new legislation to fill the gaps in current law; 2) policies that help bring up the bottom of the labor market, which can jump start real wage growth; 3) policies that address the family needs of workers; and 4) policies that address the power of women.

Starting with the last first, encouraging collective bargaining for workers, encouraging women to take leadership positions in labor unions, encouraging women to run for public office (public funding for elections would help!), and ensuring that more women serve on corporate boards of directors would all increase women’s power.  Policies that address such work-family issues as child care and paid family leave are sorely lacking in the United States, compared with other wealthy nations, and it’s high time we caught up—these policies are likely to increase women’s wages in the long run as they help equalize caregiving between women and men and lead women to invest more in their careers.  Policies that especially bring up the bottom of the labor market have also fallen behind their historic norms:  the minimum wage in real dollars is below where it was in the 1960s.  The current proposal to increase the minimum wage to $10.10 per hour and raise the minimum wage for tipped workers to $4.90 per hour (it has been stuck at $2.13 per hour since 1991) is estimated by the White House to narrow the gender wage gap by more than one percentage point. The Obama Administration is also working on increasing the likelihood that those supervisory workers who earn  modest salaries (for example, less than $50,000 per year, 54 percent of whom are women) will be paid  time and a half for their hours worked beyond 40 per week.  Stronger enforcement of the EEO laws we have goes without saying, so that women continue to be able to enter jobs that are currently done mostly by men (men’s jobs).  We could also strengthen the law by making it illegal for employers to retaliate against workers who share pay information and requiring employers to pay comparable men’s and women’s jobs equally.

Heidi Hartmann, PhD, is founder and president of 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.

Top 8 IWPR Findings of 2013

1.       If current trends continue, it will take almost another five decades—until 2058—for women to reach pay equity.

Based on an IWPR analysis that projects recent trends forward, most women working today will not see equal pay during their working lives. Furthermore, 2012 Earnings figures released by the U.S. Census Bureau show that real earnings have failed to grow, and the gender wage gap has stayed essentially unchanged since 2001.

2.       Black women, Latinas, and Native American women make up just two percent of STEM faculty at US colleges and universities.

In 2010, underrepresented minority (URM) women (blacks, Hispanics, Native Americans and those who identify as more than one race) were just 2.1 percent of STEM faculty at U.S. 4-year colleges and universities, while comprising 13 percent of the US working aged population. In contrast, white men held 58 percent of these positions, while making up 35 percent of the working age population. The highest level of representation for URM women faculty is in the life sciences and the lowest is in computer science and mathematics.

3.       Of all African American college students in the United States, nearly four in ten are parents. 

Despite the centrality of parenthood to the college experiences of many students of color (including nearly four in ten of African American students, one in three of Native American students, and one in four of Latino students), too few postsecondary institutions directly address their needs or experiences as student-parents, or even know how many parents they have on campus. In fact, campus child care serves less than five percent of the child care needs of college students, and the proportion of public postsecondary institutions with on-campus child care is declining.

4.      In the recovery from the recent recession, women have regained all the jobs they lost, whereas men have regained only 75 percent of the jobs they lost.

In fact, more women are working today than ever before. Despite gains, neither men nor women have regained their pre-recession labor force participation rate, with women’s labor force participation rate peaking in 2000. If the number of jobs had grown as fast as the working age population since the start of the recession, women would hold 3.8 million more jobs in November 2013 and men would hold an additional 5.4 million. Were it not for women’s strong presence in a few growing industries, however, women would have fared much worse than they did in the recovery, as women have either lost proportionately more jobs or gained proportionately fewer jobs than men within each industry—meaning that men’s rate of employment growth has been higher than women’s in every industry.

5.       Expanding paid sick days to newly covered workers in Washington, DC, will save DC employers approximately $2 million per year. Paid sick days also passed in a number of new jurisdictions in 2013.

While DC was among the first cities to pass citywide paid sick days legislation in 2008, the law excluded a number of workers—including most tipped workers—and started coverage only after workers have been employed by a particular employer for more than one year and 1,000 hours. The recently passed amendment to DC’s existing policy, not only expands protections to even more workers in DC. IWPR analysis shows that employers can expect to see the cost of implementing this new policy offset by increased employee productivity, reduced worker absences associated with less contagion of communicable diseases in the workplace, and reduced employee turnover. IWPR’s analyses also helped advocates and policymakers pass new paid sick days laws in New York City and Portland, and inform proposed legislation in Newark, Philadelphia, and proposed statewide legislation in Oregon, Vermont, and Maryland.

6.       Four of the 20 most common occupations for women pay poverty wages.

Occupations that are common to women provide lower earnings: Four of the 20 most common occupations for women—‘maids and housekeeping cleaners,’ ‘waitresses,’ ‘cashiers,’ and ‘retail sales persons’—have median earnings for a full-time week of work that are insufficient to lift a family of four out of poverty. An additional two of the most common occupations for women pay near poverty wages, meaning that six of the 20 occupations common to women pay at or near poverty wages. In fact, male poverty has significantly declined since 2010, while women’s poverty levels have stayed steady, leading to a growing gender poverty gap.

7.       While women hold about half all jobs in the country, they hold only three out of ten jobs in the growing green economy, and are especially underrepresented in the green jobs that are expected to grow the most.

In 33 states, women in green jobs earn at least $1,000 more per year for full-time year-round work than women in the overall economy. However, women are missing from the fastest growing green occupations. For example, many new jobs are expected to be added for heating, ventilation, and air conditioning (HVAC) technicians, but fewer than two percent of HVAC technicians in the United States are women.

8.       90 percent of in-home health care workers are women, 56 percent are from a minority racial or ethnic group, and 28 percent are immigrants.

As the Baby Boom generation ages (every 8 seconds another American turns 65), women immigrant in-home care workers are filling a gap in home care labor for the elderly.  By 2018, the direct care workforce is expected to number more than 4 million positions, an expansion of 1.1 million workers since 2008. The occupations of home health aides and personal care aides are expected to grow at the fastest rates. Immigrants make up a disproportionate share of the in-home health care workforce at 28 percent, and one in five immigrant direct care workers is undocumented. Lack of legal immigration status leaves many vulnerable to low wages and poor working conditions.

This post was compiled by Jennifer Clark, the Communications Manager for 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. 

Celebrating Title IX: On Track for Equality, Beyond the Sports Field

By Ann DeMeulenaere Weedon

This week marks forty years since the passage of Title IX, an amendment that forbids discrimination on the basis of sex in public education or in any educational program or activity receiving federal funding. Also known as the Patsy T. Mink Equal Opportunity in Education Act, Title IX has a long history of being associated with women’s access to sports programs but the law has much wider, perhaps less visible, applications for gender equity in education.

At a congressional briefing on Wednesday, June 20, the National Coalition for Women & Girls in Education (NCWGE), of which IWPR is a proud member,  presented their newly released report Title IX: Working to Ensure Gender Equity in Education with findings on how Title IX is impacting areas such as access to education for pregnant and parenting students, sexual harassment in schools and colleges, single-sex education, and education in STEM (science, technology, engineering and math) fields and career and technical education. Congresswoman Gwen Moore addressed the significant milestone of the fortieth anniversary, but also cautioned that there is still much work to be done to achieve equality in educational programs. Even with successful women as role models some young girls still hold very limited ideas about what careers are right for them. “This ought to be a point at which we can break through,” said Moore of the fortieth anniversary.

According to the panelists at the briefing, the biggest hurdle to advancing equality in education is low awareness of what Title IX entails, such as lesser-known requirements aimed at improving access to education for pregnant or parenting students. Even though Title IX clearly makes this illegal, some schools still use pregnancy or motherhood as a reason for excluding girls from school.

A lack of awareness about Title IX requirements affects how sexual harassment and same-sex education programs are addressed in schools. Catherine Hill, Director of Research at AAUW, framed the sexual harassment problem as a need to make administrators understand that the law requires simply providing the same protections from harassment to students as to faculty and staff. “We want schools to not just react but to prevent sexual harassment,” said Hill.

Galen Sherwin of the American Civil Liberties Union (ACLU) spoke about the growing trend of sex-segregated educational initiatives. Limited research has been done in this area yet—because anecdotal evidence suggests they work—educators are implementing these programs in direct violation of Title IX requirements. These types of programs sometimes teach girls by using examples involving makeup and wedding dresses, while teaching boys with themes from sports and hunting. According to Sherwin, most often these programs are small-scale and go unnoticed by school district authorities. When an individual program is discovered, actions are taken but such a reactive response is unlikely stop such practices nationally.

Panelist Betty Shanahan, Executive Director and CEO of the Society of Women Engineers, emphasized the need to open up STEM fields to women and people of color and “leverage our nation’s strength—our diversity.” Shanahan said, since women who leave engineering programs tend to have higher GPAs than the men who choose to stay in these programs, “we don’t need to fix the women, we need to fix the environments.” A recent IWPR briefing paper, cited in the report, uncovered an alarming trend of a decline of women studying STEM fields at community colleges within the last decade.

The panel participants agreed that Title IX was crucially important legislation and, in the past forty years, women have made great strides in education. The biggest take away from the briefing was that most people are not even aware of what Title IX covers. Panelists emphasized the need to both encourage and insist on compliance in a carrot and stick approach. Suggestions for improving compliance with Title IX included requiring the Office for Civil Rights at the U.S. Department of Education to conduct compliance reviews and encouraging school districts to conduct their own self-evaluations.

Ann DeMeulenaere Weedon is Communications Intern with 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.

STEM Report Points to a Means of Economic Security for Low-Income Women

By Margaret Kran-Annexstein

Job opportunities in science, technology, engineering, and math (STEM) are some of the fastest-growing industries in the country yet women’s presence in STEM education at the community college level is dropping. Between 2000–2001 and 2008–2009, the number of women earning associate’s degrees in STEM fields decreased by 25.7 percent. Meanwhile, jobs in STEM fields are expected to nearly double by 2018.

A new IWPR report, Increasing Opportunities for Low-Income Women and Student Parents in Science, Technology, Engineering, and Math at Community Colleges, proposes solutions for bridging this training and jobs gap for women. The report addresses obstacles faced by women in STEM fields, and how educational institutions and organizations can help women to overcome these challenges.

It is important to encourage all women, but particularly low-income women and student parents, to pursue STEM fields. STEM degrees can be a link to better economic security because they lead to jobs in fields with better pay and narrower wage gaps—a 14 percent wage gap exists in STEM jobs versus 21 percent in non-STEM jobs.

From the report:

Women at the community college level are more likely than men to enroll in educational fields and training for jobs in traditionally female occupations—such as child care workers, health aids, or administrative assistants—with low starting pay, flat wage trajectories, and poor benefits (Hegewisch et al. 2010; Negrey et al. 2001). By contrast, women who train for science, technology, engineering, and math (STEM) fields—fields typically dominated by men—see strong economic returns.

I always liked math and science in elementary and high school. However, somewhere along the way, I abandoned STEM education, just like many other women and girls. In this difficult economy, why do so many women steer away from fields that offer so many job opportunities? During the release event for the STEM report, Roberto Rodriguez, a member of the White House Domestic Policy Council, said that women and girls drop out or avoid STEM education because of a “lack of role models, gender stereotyping, and less family-friendly flexibility that exists in STEM fields.”

Sara Manzano-Díaz, who also spoke at the report release event, focuses a lot of her attention on the encouragement of young girls in her role as director of the Women’s Bureau in the U.S. Department of Labor. She sees that “education is the great equalizer” and by becoming role models and mentors for girls, we can encourage them to pursue STEM degrees and pave their way to fulfilling careers.

The report outlines steps that community colleges could be taking in order to recruit and retain women, especially mothers who face more challenges in completing their degrees and need flexibility in their study schedules. Increasing the number of student parents studying STEM fields can have lasting effects—not only on the quality of life of a graduate once they leave school, but also on their children. According to her research, author of the report Cynthia Costello found that children whose mothers pursue postsecondary education are more likely to receive college degrees themselves.

Women have made such huge leaps in education equality and this makes their minority presence in STEM fields of study all the more shocking.

The reality that women are highly underrepresented in STEM fields is distressing because those fields are in need of skilled workers in a shifting economy. It is also a missed opportunity to incorporate diverse perspectives in a growing industry.

“We need… more girls who believe they can grow up to invent and to discover,” said Rodriguez at the release event. “Invention and discovery in engineering and science is creative act. It benefits from a multitude of viewpoint…So without diversity we are paying inherently an opportunity cost here because that’s a cost in products not built, in designs not considered, ultimately in constraints that are not understood.”

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

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.