5 Points to Bring Up to Win an Argument about the Gender Wage Gap

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

The 79 percent wage ratio figure, the most commonly used figure to measure the gender wage gap in the United States, is often derided as misleading, a myth, or worst of all, a lie. In this blog, we argue that the figure is an accurate measure of the inequality in earnings between women and men who work full-time, year-round in the labor market and reflects a number of different factors: discrimination in pay, recruitment, job assignment, and promotion; lower earnings in occupations mainly done by women; and  women’s disproportionate share of time spent on family care, including that they—rather than fathers—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.

When a phenomenon, such as the wage gap, can be explained by various factors, it does not mean the phenomenon doesn’t exist.  In fact, those explanations are the exact factors to look at when identifying interventions to solve the problem. Take another phenomenon for example: poverty. Black and Hispanic populations in the United States have higher poverty rates than the white population. When analyses control for education, place of residence, type of job, and many other factors, the remaining differences in poverty rates are smaller but not gone. It is not a myth or a lie, then, to say that black and Hispanic Americans are disproportionately more likely to live in poverty. Indeed, they are.

Here are five key facts to remember about the gender wage gap:

1) Other data series on weekly or hourly earnings are not necessarily more accurate than the annual figure.

Some claim that proponents of equal pay use the 79 percent annual wage ratio figure because it shows the biggest wage gap, 21 percent, when other data series on weekly and hourly earnings available from the Bureau of Labor Statistics (BLS) show slightly smaller gaps. There is no basis for the claim that weekly or hourly data are a more accurate representation of inequality in pay between men and women. The 79 percent annual wage ratio figure is the historical headline figure, likely because it allows the longest comparison across time and includes the broadest range of different kinds of earnings, including self-employment income. Annual bonus payments, for example, are a big part of remuneration in some fields and are included in the 79 percent figure, but are excluded from the weekly or hourly earnings figures. Both the weekly and annual earnings ratios are for full-time workers only; if part-time and part-year workers were included, the ratios of women’s to men’s earnings would be even lower, as women are more likely than men to work reduced schedules, often in order to manage unpaid childrearing and other caregiving work.

2) The annual wage ratio of 79 percent is actually a moderate estimate of gender pay inequality.

If part-time workers were included, a figure that Statistics Canada uses, the wage ratio would be 69.9, a gap of 30.1 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. In fact, the 79 percent figure falls in the middle of the range of these other estimates.

3) Women’s ‘choices’ are not necessarily choices.

Wage gap skeptics emphasize that women ‘choose’ different and lower-paying college majors than men, implying 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 occupations, ranging from lack of unbiased information about job prospects to actual harassment and discrimination in male-dominated jobs. For instance, a library assistant may choose to go to school for 6 more years to become a librarian, or she may choose to go to school for half that and become an IT support specialist, if she knew that librarians and IT support specialists were paid roughly the same per year. In a world where half of IT support specialists were women and half of librarians 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 autonomy and flexibility at work, as well as time to spend with family.

4) There is no proof that being a mother makes a woman less productive on the job.

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. 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. In fact, women’s human capital (generally measured as years of education plus years on the job and in the job market) are increasingly equal for women and men.  Furthermore, research shows subsidizing the cost of child care and providing paid parental leaves of up to six months would help women return to work sooner, and would help men to more equally share care.

5) Discrimination is still a factor—a big one—in the gender wage gap.

It is true 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 is 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. Peer reviewed literature surveys published in mainstream economics journals, including a recent study by Francine Blau and Lawrence Khan estimate that 38 percent of the gross wage gap remains unexplained when factors reasonably thought to affect productivity are included as control variables in the models. Blau and Kahn estimate that occupational segregation—where women work in lower paid jobs, typically done by women, and men work in higher paying jobs typically done by men— along with segregation by industry and firm, are now responsible for half the wage gap.  While some occupational differences result from differences in preparation for the labor market by women and men, others result from different job assignments by employers when women and men first participate in the labor market.

It is important to look at the 79 percent figure as a baseline to understand the true magnitude of the problem, so we can intervene on factors such as employer bias, career preparation, and time spent on family care. When we look at the control variables, the findings do not indicate that the wage gap is actually a smaller problem than we thought. The findings indicate that women need more information and opportunity to pursue certain lucrative careers, like those in STEM, where the largest employers are only now providing paid family leaves that can encourage the more equal division between women and men. Redressing the US lag in providing paid family leave and subsidized child care can help, but so can improved information about pay and stronger enforcement of our equal opportunity laws.

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

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.

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.

Where’s My 20?

By Sara Manzano-Díaz, Director of the U.S. Department of Labor’s Women’s Bureau

This is a guest blog post on the important theme of Equal Pay Day. The struggle to gain equality in pay for women is ongoing, and affects women and their families.


As the economy of the United States slowly recovers, one faction of the population is still struggling for wage equality—women. The American workforce today is more female and more diverse. Women account for nearly half of our nation’s workers. Yet, women on average still earn 20 percent less than their male counterparts.

Since passage of the landmark Equal Pay Act in 1963, the pay gap has steadily narrowed by just one-half a cent each year. Over the past five decades the landscape of pay equity for women has remained one of “haves” and “have nots.” This is particularly true for women of color. Data indicates that the wages of women of color significantly lag that of whites.

According to recent reports by the U. S. Department of Labor’s Bureau of Labor Statistics, women who were full-time wage and salary workers had median weekly earnings of $657 compared to $819 for men. When you look at the wages of African American and Hispanic women, however, the wage gap widens.

For example, African American women earn about 70 cents and Latinas about 60 cents of every dollar paid to all men. These aren’t simply statistics, they’re real numbers that affect the pocketbooks of women who face the day-to-day bread and butter issues of taking care of their families.

So, why does the pay gap matter? The pay gap shines a bright light on the disparity of income available to maintain the households of American families, particularly those of single women and women of color. For millions of working women, the gap means 20 percent less income to pay for housing, gas to get to work, utilities, food, college education for children, and retirement savings.

Over a 40-year career, a woman cumulatively loses nearly $380,000 in earnings. For the average working woman that is almost $150 a week in lost household income to sustain their families. Equal pay is not just a woman’s issue—it’s a family issue.

As a woman and a public servant, I am proud of the Labor Department’s role in advocating for issues that positively improve equal pay for women and their families. And, we want to assure women that this administration will continue to enforce the laws that protect wages, to level the playing field for employers who play by the rules, and to work toward fixing policies that impact women in the workplace.

And as a working woman, I know what my missing 20 percent has cost me over my lifetime. What has that 20 percent cost your family?

More information on the impact of the pay gap is available at http://www.dol.gov/wb/equal-pay-toolkit-20110412.htm.

Sara Manzano-Díaz is Director of the U. S. Department of Labor’s Women’s Bureau.

A College Student’s Take on the Gender Wage Gap

By Lauren Hepler

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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