Almost All of the Gender Wage Gap Can Be Fully Explained and Yet Legislation is Pending to "Make Real Progress"
In 2007, the ratio of the median earnings of women and the median earnings of men was 79.6 percent, reflecting a raw gender wage gap of 20.4 percent.
From the 2009 study "An Analysis of the Reasons for the Disparity in Wages Between Men and Women," prepared by the Consad Research Corporation for the Department of Labor:
"In the political domain, the values calculated for the raw gap have been interpreted by many people as a clear indication of overt wage discrimination against women, and have been advanced as a justification for proposed policies mandating equal pay or comparable worth. In the economic domain, the values calculated for the raw gap have been the stimulus for a substantial amount of scholarly research that has attempted to identify the sources of the observed differences in earnings, and to evaluate their relative importance.
There are observable differences in the attributes of men and women that account for most of the wage gap. Statistical analysis that includes those variables has produced results that collectively account for between 65.1 and 76.4 percent of a raw gender wage gap of 20.4 percent, and thereby leave an adjusted gender wage gap that is between 4.8 and 7.1 percent. These variables include:
1. A greater percentage of women than men tend to work part-time. Part-time work tends to pay less than full-time work.
2. A greater percentage of women than men tend to leave the labor force for child birth, child care and elder care. Some of the wage gap is explained by the percentage of women who were not in the labor force during previous years, the age of women, and the number of children in the home.
3. Women, especially working mothers, tend to value “family friendly” workplace policies more than men. Some of the wage gap is explained by industry and occupation, particularly, the percentage of women who work in the industry and occupation.
4. Research indicates that women may value non-wage benefits more than men do, and as a result prefer to take a greater portion of their compensation in the form of health insurance and other fringe benefits.
5. More of the raw wage gap could be explained by including some additional variables within a single comprehensive analysis that considers all of the factors simultaneously; however, such an analysis is not feasible to conduct with available data bases.
6. This study leads to the unambiguous conclusion that the differences in the compensation of men and women are the result of a multitude of factors and that the raw wage gap should not be used as the basis to justify corrective action. Indeed, there may be nothing to correct. The differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers."
MP: And yet the House passed the Paycheck Fairness Act in 2009, and the Senate recently held hearings on an identical version of the bill, which is described here by the AAUW:
"A much needed update of the 45-year-old Equal Pay Act, the Paycheck Fairness Act is a comprehensive bill that would create stronger incentives for employers to follow the law, empower women to negotiate for equal pay, and strengthen federal outreach, education and enforcement efforts. Championed by longtime AAUW friend Rep. Rosa DeLauro (D-CT), the bill would also deter wage discrimination by strengthening penalties for equal pay violations and by prohibiting retaliation against workers who ask about employers' wage practices or disclose their own wages. Together with the Ledbetter bill, this critical piece of legislation can help create a climate where pay discrimination is not tolerated, and give the new administration the enforcement tools it needs to make real progress on pay equity."
Real progress on pay equity? According to the Department of Labor study, pay equity is a reality already and there is no wage discrimination once all relevants factors are considered.
Thanks to Christina Sommers.