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.

IWPR Survey Finds Construction Trades Offer Good Wages for Women Workers, but Harassment and Discrimination Still Common

by Ariane Hegewisch

During the past 40 years, many previously male-dominated occupations have become integrated, but women’s share of construction trades jobs has remained below five percent. Despite this, because the construction industry is so large, more women work in the construction trades than work as dental hygienists, pharmacists, or veterinarians. As the construction industry continues to add jobs in the recovery following the Great Recession, and as the U.S. Bureau of Labor Statistics predicts that construction occupations will see above average employment growth in the coming years, the question of how to unblock the construction industry for women is once again on the agenda and gaining interest: a recent webinar on women in construction hosted by the Women’s Bureau of the U.S. Department of Labor attracted close to 1,000 registrants.

Two new IWPR publications provide insights into women’s experiences working in construction and offer suggestions for how to reduce barriers to entry. An IWPR Research-in-Brief, Women in Construction and the Economic Recovery: Results from the 2013 IWPR Tradeswomen Survey, presents results from an exploratory survey conducted in the spring of 2013. The survey, which includes responses from over 200 women working in the trades, presents a mixed picture. Over 40 percent of tradeswomen respondents earned at least $50,000 in 2012. Yet, only 27 percent had been able to work year-round and 22 percent of respondents were unemployed.Figure from Tradeswoman BP

Fewer than two-thirds of respondents report equal treatment when it comes to being respected on the job, hiring and allocation of hours, and assignments. Only 42 percent report equal treatment when it comes to promotions, and 30 percent report that they are “always” or “frequently” sexually harassed. Rates of racial harassment and discrimination, discrimination based on sexual orientation, and age discrimination are even higher and, in fact, more than one in ten respondents have taken discrimination claims to the Equal Employment Opportunity Commission.

Another recent study, Untapped Resources, Untapped Labor Pool: Using Federal Highway Funds to Prepare Women for Careers in Construction, provides examples of how women’s under-representation in construction is being addressed by targeted policies and funding in Oregon and Maryland. Since 2009, Oregon has reserved part of its federal highway funding to increase diversity in the highway construction workforce. Oregon has funded child care and other retention services for construction apprentices, pre-apprenticeship training, career fairs and outreach, and supervisor training for employers on how to tackle workplace discrimination and harassment. Retention rates for women and minority male apprentices have improved significantly, and women’s share of construction apprenticeships in Oregon is twice the national rate.

The first brief shows what is keeping many women out of construction jobs, and what is needed to help them get into and succeed in the trades. But turning that knowledge into action takes resources. The second brief offers examples from Oregon and Maryland for creating a stable funding source to build diversity in the construction workforce.
Ariane Hegewisch is a Study Director at the Institute for Women’s Policy Research.

IWPR Commemorates the 50th Anniversary of President Kennedy’s Commission on the Status of Women Report

by Jessica Milli, Ph.D.

To commemorate the 50th anniversary of 1963’s American Women: Report of the President’s Commission on the Status of Women, the Women’s Bureau of the U.S. Department of Labor sponsored a series of Scholars’ Papers. As part of this effort, IWPR prepared papers on parental leave and on occupational segregation and the wage gap.

Paid Parental Leave in the United States reviews research and data sources on paid leave for family related purposes. Despite the recommendation in the 1963 report that paid maternity leave be pro­vided for female workers, it took another thirty years’ for the passage of the federal Family and Medical Leave Act of 1993 (FMLA) to provide at least unpaid job protected maternity and paternity leave. Due to the structure of the FMLA, as of 2012, only 59 percent of workers were eli­gible for FMLA leave. With the exception of a few states with more generous family leave policies, FMLA leave is unpaid, and many families cannot afford to use it as much as they would like.

The IWPR paper also details previous research on the economic and health benefits of paid family leave. Paid family leave can improve the labor force at­tachment of workers, improve employee morale and productivity, reduce worker turnover, and positively impact economic growth. Such benefits to firms may help offset the costs of implementing paid leave policies. Research further suggests that expanding paid leave is likely to have economy-wide benefits such as reduced spending on public assistance programs and increased labor force participa­tion. Access to leave, whether it is paid or not, can increase breastfeeding rates and duration, reduce the risk of infant mortality, and increase the likelihood of infants receiving well-baby care and vaccinations.

The paper also reviews federal data sources on paid and unpaid leave and highlights gaps and inconsistencies in the information avail­able. The paper argues for a more sys­tematic federal effort to improve the data infrastructure on this important benefit for working families.

Occupational Segregation and the Gender Wage Gap documents changes since the 1960s in the types of jobs that men and women perform and links those trends with recent lack of change in the gender wage gap. Women have made large strides toward equality in the labor force, including increasing their representation in occupations that have traditionally been dominated by men— such as management, accounting, and law. However, not all occupations have seen increased integration over the years, and many remain heavily male- or female-dominated. The paper docu­ments that progress has stalled, point­ing out that both progress in improving occupational integration and progress in closing the gender wage gap stalled at the beginning of the last decade. This relationship suggests that occupa­tional segregation should be a priority of policy efforts to address the wage gap, either by focusing on encourag­ing women to enter more integrated or male-dominated occupations, or by im­proving earnings in female-dominated occupations, or both.

The papers are available on the Women’s Bureau website and on IWPR’s website.

Jessica Milli, Ph.D. is an IWPR Senior Research Associate.

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.