Gender Pay Gap? There's An App For That Coming

Politico.com reported this week that "The Obama administration recently launched a software development competition designed to help achieve equal pay in the workforce for American women. The competition has several prize categories, including five scholarships to attend an 8-week design and entrepreneurship program. Another winner will get $5,000 from a private nonprofit to help further develop their app."

It's called the Equal Pay App Challenge, and here's some information from the competition's website:

"Nearly 50 years after President Kennedy signed the Equal Pay Act, on average women are still paid less than their male counterparts for doing comparable jobs – that’s called the pay gap. It means that each time the average woman starts a new job, she’s likely to start from a lower base salary, but it also means that over time the pay gap between her and her male colleagues is likely to become wider and wider.

For the average working woman, the pay gap means $150 less in her weekly paycheck, $8,000 less at the end of the year, and $380,000 less over her lifetime. For women of color and women with disabilities, the disparity is even bigger. Your challenge is to use publicly available labor data and other online resources to educate users about the pay gap and to build tools to promote equal pay."

Here's an example of how the app might work for some women, based on these salary data:

Enter Your Marital Status: Single

Enter whether you work full-time or part-time: Full-time

Enter the number of children you have: Zero

Do you work in a large U.S. city? Yes

Enter your age: Under 30 years old

Enter your city of employment below, and the Equal Pay App will report the gender pay gap for your demographic group in your geographic area.  A negative (positive) pay gap reflects lower (higher) median full-time salaries for women in your group (single, childless, under 30 years old) compared to your male counterparts.

Atlanta: +20% pay gap in favor of women

Memphis: +20% pay gap in favor of women

New York City: +17% pay gap in favor of women

Los Angeles: +12% pay gap in favor of women

San Diego: +15% pay gap in favor of women

Charlotte: +14% pay gap in favor of women

Warning: You have uncovered a significant gender pay gap in favor of women, and your employer may be paying single, childless women under 30 years old more than men in that same demographic group.  This could be illegal gender discrimination in violation of the Equal Pay Act of 1963, and you should report this potential violation of federal law to your local Equal Employment Opportunity Commission. Thanks for using the Equal Pay App. 

HT: Christina Sommers

There is No Gender Pay Gap in the UK: Having Children Is Decisive Factor, Not Being a Woman

UK Telegraph -- Harriet Harman claims that women earn on average 22.6% less per hour than men and takes it for granted that this difference is the result of discrimination against women by men. And yet the Government's own figures support no such conclusion.

Three official surveys are used by the Office for National Statistics (ONS): a survey of employers called ASHE (the annual survey of hours and earnings), a survey of households (the Labour Force Survey) and the panel dataset of the New Earnings Survey, which provides information from 1975 to 2006.

According to ASHE, in 2007 a gender pay gap does not open up until women reach about 30 years of age. From ages 18-29 there is hardly any difference and, according to the Labour Force Survey (LFS), women aged 22-29 are paid on average slightly more per hour than men. As the ONS concludes, having children is the decisive factor, not being a woman.

Historical data confirm this conclusion. Based on the New Earnings Survey panel data, in 1975 there was a pay gap from the age of 18 onwards, but in 2006 no such gap existed until age 34. Why? In 1975 women tended to have children in their 20s and by 2006 it was more common to have them in their 30s. As the average age of child-rearing increased so too did the age at which the pay gap kicked in.

The truth is that the vital difference is not between men and women but between women with dependent children and everyone else, whether male or female. The hourly rate of pay for women who are neither married nor cohabiting is slightly higher than for men in the same situation. For men and women who are married or cohabiting the hourly pay gap is 14.5% and the gap widens with the number of children. Women with one dependent child earn on average 12.3% less than men and with four or more dependent children 35.5% less.

Quite simply the Government's emphasis on the gender pay gap of 22.6% is an abuse of official statistics. And to infer that the difference in the average hourly rate is the result of discrimination is an abuse of logic. When women without dependent children compete head to head with men in the same situation their hourly rate is higher. Most women today work throughout their 20s and find that success is the result of being good at something. Employers are looking for capable people whether male or female.

Women today don't need government quotas. They are doing fine on their own. They want to be judged on their merits, not patronised by the old generation of 1970s quota feminists like Harriet Harman.

MP: Labor market studies in the U.S. have also found that motherhood and marriage explain much more of the pay gap than sex discrimination. For example, a 2005 NBER study concludes that:

"There is no gender gap in wages among men and women with similar family roles. Comparing the wage gap between women and men ages 35-43 who have never married and never had a child, we find a small observed gap in favor of women, which becomes insignificant after accounting for differences in skills and job and workplace characteristics."

UK Pay Gap Based on Personal Lifestyle Choices: Like Marriage and Motherhood

The UK's Institute of Economics Affairs has released a new study "Should We Mind the Gap? Gender Pay Differentials and Public Policy" (full study here, press release here, newspaper report here).

Professor John Shackleton, of the University of East London, who led the report, said in reality the pay gap hardly existed for workers under 30.

"The widespread belief that the gender pay gap is a reflection of deep rooted discrimination by employers is ill-informed and an unhelpful contribution to the debate. The pay gap is falling but is also a reflection of individuals' lifestyle preferences. Government can't regulate or legislate these away - and shouldn't try to," said the report.

He said men work longer hours in more dangerous jobs and face a greater risk of being sacked, while women who take career breaks outnumber their male equivalents by more than five to one.

"In the last decade, in the name of promoting equality, we have had a huge increase in the burden placed upon employers. This can often harm the very people it is intended to help. Indeed, given this new evidence, we should question the need for the Equal Pay Act. It seems to be individual choices and not systematic discrimination that determine pay and conditions."

MP: The table above from the report is very enlightening:

1. For unmarried, single workers there is NO "pay gap," and in fact women make 1.1% MORE than men in the U.K. (median wage of £8.82 per hour for females vs. £8.72 for men), so there is actually a pay gap for men!

2. For the overall population of U.K. workers, without even controlling for relevant factors like hours worked, career choices, etc., quite a bit of the "pay gap" can be explained by just two factors, both of which relate to voluntary and personal lifestyle choices: marriage and motherhood (see table above).

3. The pay gap increases as the number of children increases, and is highest for married workers with 4 children.

To Close the Gender Pay Gap, How About an "Equal Workweek Act" or a "Workweek Fairness Act"

It's been well-documented that one factor that explains the "gender-pay gap" is the existence of a "gender-hours gap."  According to the BLS, men worked on average about five more hours per week in 2009 (40.2 hours) than women on average (35.3 hours), and that "gender-hours gap" has persisted over time.   

Two recent academic research studies have found evidence of significant "gender-hours gaps" in both the legal profession and the medical profession.

1.  In the article "Are Women Overinvesting in Education? Evidence from the Medical Profession" two professors in the Yale School of Management find that:

"In our data, the median male physician with 10 years of experience works 11 hours per week more than the median female physician in our sample with 10 years of experience. Simply put, the majority of women physicians do not appear to work enough hours earning the physician-wage premium to amortize that profession’s higher upfront investments."

2. In another research paper, "Gender Gaps in Performance: Evidence from Young Lawyers," the authors find that some of the gender wage gap for young lawyers is explained by the fact that male lawyers in the group studied worked an average of more than 54 hours per week compared to their female counterparts, who worked less than 49 hours per week on average. 

MP: Despite many empirical studies showing that the large majority of gender differences in pay can be explained by hours worked and individual career and family choices made by men and women, the myth of a gender wage gap due to systematic workplace discrimination persists.  Even though the Equal Pay Act of 1963 prohibits sex-based wage discrimination, new legislation in the form of the Democratic-sponsored Paycheck Fairness Act was passed in the House of Representatives in 2008 was considered in the Senate this week.  The legislation failed to generate enough votes in the Senate on Tuesday, and so its future is now uncertain.

Maybe another approach should be considered.  Since some of the gender wage gap results from differences in hours worked, perhaps federal legislation could be introduced to eliminate the unfair "gender-hours gap," e.g. what about the "Equal Workweek Act" or the "Workweek Fairness Act"?  Closing the "gender-hours gap" by forcing women to work longer hours (or men to work fewer hours) would go a long way towards closing the "gender pay gap."

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.

1) The Recession Saved 874 Lives in 2009; 2) Would 2,000 Female Deaths Be Worth It for Pay Equity?

In June, the Bureau of Labor Statistics (BLS) released its annual study "Highlights of Women’s Earnings in 2009" and opened the report with the following statement:

"In 2009, women who were full-time wage and salary workers had median weekly earnings of $657, or about 80 percent of the $819 median for their male counterparts."

Today the BLS released its annual report on "Fatal Occupational Injuries in 2009" with the following highlights:

1. A preliminary total of 4,340 fatal work injuries were recorded in the United States in 2009, down from a final count of 5,214 fatal work injuries in 2008. The 2009 total represents the smallest annual preliminary total since the Census of Fatal Occupational Injuries (CFOI) program was first conducted in 1992.

2. Economic factors played a major role in the fatal work injury decrease in 2009. Total hours worked fell by 6 percent in 2009 following a 1 percent decline in 2008, and some industries that have historically accounted for a significant share of fatal work injuries, such as construction, experienced even larger declines in employment or hours worked.

3. Fatal work injuries in the private construction sector declined by 16 percent in 2009 following the decline of 19 percent in 2008.

4. Of the 4,340 occupational fatalities in 2009, male deaths represented 92.9% of the total (4,021) and female deaths represented 7.1% (309) of the total.  Expressed as a ratio, there were more than 13 job-related deaths for men in 2009 for woman who died in a job-related accident. 

MP:
 
1. The economic slowdown in 2009, especially in the construction and manufacturing sectors, was largely responsible for reducing occupational deaths in 2009 by almost 900 American workers (874). 
 
2. Given the huge disparity in occupational deaths by gender (13 men died on the  job in 2009 for every 1 women), it should be clear that men and women in the labor force cannot accurately be described as "counterparts" (definition: "One that has the same functions and characteristics as another.")
 
The huge male-female occupational death gap, which has persisted over many decades, has surprisingly received very little attention as one important factor that could explain some of the 80% female-male pay gap. To achieve greater female-male pay equity there would most likely have to be an increase in the number of women in higher-paying, but higher-risk occupations. That outcome will certainly reduce the gender pay gap, but it would come at a cost—significantly more fatal occupational deaths and injuries for women.

Would closing the gender pay gap, if it also means closing the gender occupational death gap, really be worth it for women? To put it in perspective, perfect gender parity for occupational deaths in 2009 would have translated into more than 2,000 women dying on the job, instead of the actual number of women who died: 309. Would the higher risk of being injured or killed on the job really be worth the extra, high-risk pay for women?  Do they really want to achieve "counterpart" status with men in occupational deaths?  Probably not, but that's one of the reasons for the unadjusted, but persistent pay gap - the disproportionate number of men in higher-risk, higher-paying jobs (construction, farming, fishing, manufacturing, etc.)  

More on the Pay Gap, From the U.K.

Like in the U.S., the pay gap is a controversial issue in the U.K. English Blogger Tim Worstall has a link to an interesting article in the U.K.'s Sunday Times that reports that Britain's Minister for Women Harriet Harman is "pressing forward with the government’s commitment to reduce the pay gap between men and women,” currently 12.2%, up from 11.8% last year. From the article:

However, what is not recognised in this age-old debate is the fact that many women are happy to be paid less in order to work less and thus spend more time with their families.

Well, not “happy” necessarily, but “able to live with what is an essential compromise”. That sounds like an incredibly old-fashioned, borderline sexist thing to say, but it is in fact an entirely modern and realistic one.

The truth of the matter is that recent generations have produced an awful lot of women who crash through the glass ceiling only to stand triumphantly among the broken shards and think: “Hmm, you know what? I’d rather be home for the baby’s bathtime.”

Men are, with a handful of exceptions, unwilling to compromise an iota on the work/ family front: work comes first and will always come first.

Faced with the choice of their children having two spectacularly absent parents, most women compromise and cut their hours. Or work from home a day or two a week, or leave at 5.30 on the dot, no matter how much they’re needed at work.

Their salary takes a commensurate dip, as often does their popularity or what is perceived as their reliability. It’s not fair because if women didn’t do this then family life would be even more endangered and confused than it already is, but nobody said commerce and domesticity made great bed partners - and women are keener on their children finding them reliable than on being available to their boss at all hours.

MP: As the graph above shows for the U.S. using BLS data, the average weekly hours for women has been gradually increasing, but men still work almost 6 more hours per week, or 16% more hours on average. At least part of any observed pay gap in the U.S. can certainly be explained by a 16% difference in the "hours worked gap." I don't have UK data, but I'm assuming there is an "hours gap" as well in the U.K., and the article seems to support that assumption.

Like in the U.S., cases of unequal pay for equal work is illegal in the U.K., and can be prosecuted. However, we should always allow for the fact that some differences in pay are based on personal choices made voluntarily, reflecting the tradeoffs between work and family. The article does a nice job of pointing out these tradeoffs.

Next Equal Occupational Fatality Day in 2022

Today (April 12, 2011) is Equal Pay Day.  According to the National Committee on Pay Equity:

"This date symbolizes how far into 2011 women must work to earn what men earned in 2010. Because women earn less, on average, than men, they must work longer for the same amount of pay. Equal Pay Day was originated by the National Committee on Pay Equity (NCPE) in 1996 as a public awareness event to illustrate the gap between men's and women's wages." 

MP: Last year, around the time of "Equal Pay Day," I created "Equal Occupational Fatality Day" to bring public awareness to the huge gender gap that exists in occupational deaths in the United States.  The next "Equal Occupational Fatality Day" will occur on Thursday August 15, 2022. This date symbolizes how far into the future women are expected to work to experience the same loss of life from work-related deaths that men experienced in just the single year 2009 (4,021 deaths for men compared to only 319 for women), according to the most recent data available from the BLS (see chart above). Because women work in much safer occupations and work environments than men, they must work decades longer than men to experience the same number of occupational fatalities.

A disproportionate number of men work in higher-risk occupations that are typically compensated with higher pay like coal mining (almost 100% male), fire fighters (96.4% male), police officers (87% male), correctional officers (74% male), farming, fishing and forestry (76.5% male) and construction (95.4% male), BLS data here. A disproportionate number of women work in lower-risk, more comfortable and safer industries, often with lower pay to compensate for the more worker-friendly, indoor, comfortable, air-conditioned office environments, like Office and Administrative Support Occupations (79% female), Education, Training and Library Occupations (73.8%), and Healthcare (74.3%). These differences in work environments could likely reflect differences in "revealed preference" by gender - men prefer higher-paid, higher risk occupations, and women prefer lower-paid, lower risk occupations, in general and on average. It might not have anything to do with discrimination, and everything to do with differences in risk tolerances and risk-reward preferences.

To achieve perfect gender pay equity, there will have to be an increase in the number of women in higher-paying, but higher-risk occupations like fire-fighting and coal mining. That outcome will certainly reduce the gender pay gap, but it will come at a huge cost: sentencing thousands of women per year to certain fatal occupational deaths. Would closing the pay gap, if it also means closing the gender occupational death gap and exposing thousands of women to work-related deaths each year, really be worth it?

Mind the Pay Gap: It's Not There

Last month's "Behind the Pay Gap" report from the American Association of University Women once again highlighted a purported disparity between salaries earned by men and women. One year after graduation, women appear to be paid only 80% of what men are paid, the report found. After 10 years, their pay dropped to 69%.

That would be terrible - if true. Instead, the much ballyhooed gender pay gap is a false premise, and it risks distracting Iowa and the nation from focusing on innovative ways to lead and develop the work force in changing times.

The truth is that women choose professional careers that pay less in the entry-level marketplace. That is a career choice, not a pay gap.

From the commentary "Gender Pay Differences: Mind the Gap; It's not There," in the Des Moines Register.

AAUW Got It Wrong: There is No Pay Gap

The American Association of University Women Educational Foundation released a study last week claiming that just one year after college graduation, women earn only 80% of what their male counterparts earn. Ten years after graduation, women fall further behind, earning only 69% of what men earn. The organization further claims that the pay gap is "disturbing," since it can only exist because of sex discrimination. It is hard to take claims like this seriously, and here are the reasons why:

1. Sex discrimination is illegal under the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964. If the AAUW allegedly found thousands of cases where women make 80% of what men make one year out of college with the exact same credentials, and thousands of cases where women make 69% after ten years with the exact same qualifications, why not bring legal action to correct this discrimination? Would thousands of organizations really engage in that much illegal discrimination and expose themselves to litigation where they would clearly lose? Not likely.

2. If profit-seeking corporations can hire women with one year experience for 20% less than equally-qualified males, or a women with ten years experience for 31% less than equally-qualified men, they would have to be blinded by sex discrimination to pass up the opportunity to save 20-30% on their labor costs. They would hire ONLY women, and NO men. The wages of women would then get bid up. Corporations are often condemned for being greedy and motivated solely by profits, so how could they pass up an easy opportunity to save 20-30% on their costs of doing business? And how could men command a 20-30% wage premium that is unjustified by their productivity in a competitive labor market?

Analogy: Think about two gas stations (like a male and female worker competing in the labor market) competing on the same corner offering the exact same product (same credentials), and Station A (male worker) sells gas for $1 per gallon, and Station B (female worker) sells gas for 70 cents. Cost-conscious consumers (employers) would obviously shop only at Station B (hire only female workers), and Station A (male workers) would either be forced to lower its prices (wages) or go out of business (remain unemployed). The only explanation for persistent price (wage) differentials between Station A (male workers) and Station B (female workers) would be differences in the quality of the gas, differences in service, or differences in credit terms, etc. In other words, some differences in wages can be explained by differences in labor services provided by male and female workers.

Wage differentials not explained by differences in productivity or the quality of services provided could not exist and persist in a competitive labor market. Greedy employers provide a sure solution to sex discrimination and lower wages for women: they will hire only women, which will then bid up their wages.

3. Here is one example of differences between male and female workers that would explain differences in pay: A year out of college women in full-time jobs work an average of 42 hours a week, compared to 45 for men. In other words, men work 7% more hours per week than women. More hours translates into more pay.

4. Ten years after graduation, 39% of women are out of the work force or working part time -- compared with only 3% of men, mostly because of marriage and motherhood. When these mothers return to full-time jobs, they naturally earn less than they would have if they had never left. And given the fact that women expect to spend time out of the work force for child-raising, they may naturally select college majors and careers that don't penalize them for gaps in employment and the possible "depreciation" of one's skills. For example, if you planned to be out of the labor market for 10 years, there is probably a significant difference in the depreciation of the skills of a grade school teacher compared to a computer programmer, electrical engineer or accountant.

5. The AAUW report did acknowledge that college-educated women tend to go into fields like education, psychology and the humanities, which typically pay less than careers preferred by men, such as engineering, math and business.

For example, 13% of the bachelor's degrees earned by men are in the relatively high-paying field of engineering, vs. just 2% of women earning college degrees in engineering. Conversely, 12% of bachelor's degrees earned by women are in the relatively low-paying field of education, compared to 5% of men.

In the chart above, note that the average salary of a liberal arts major (which includes the fields identified by the AAUW as preferred by females) is $31,333 which is only:

58% of the average salary for engineering majors
62% of the average salary for finance/economics
63% of the average salary for computer science/MIS
66% of the average salary for accounting majors

Since women are disproportionately represented in majors/fields that pay less (education and humanities), it would be natural for some salary differentials to exist.

6. Most studies that control for all factors that affect earnings show that motherhood and marriage explain almost all of the "pay gap." For example, research shows that:

a. There is no pay gap among single, full-time workers age 21 to 35, who live alone.

b. Among people ages 27 to 33 who have never had a child, the earnings of women are about 98% of men's.

c. Never-married women in their 30s who have worked continuously earn slightly higher incomes than their male counterparts.

d. Men spend only 1.6% of all potential work years out of the workforce, while women spend 14.7% of potential work years away from work.

e. A woman's lifetime earnings are lowered 13% by having her first child, and 19% by having her second.

Bottom Line: Here is what the AAUW didn't report: Median annual earnings of men and women age 25 to 34 with bachelor's degrees in the same field are roughly equal. In other words, there is no "pay gap," once you control for ALL factors that affect earnings, and compare apples with apples.

There is No Pay Gap for Singles 35-43 W/No Kids

From yesterday's San Diego Union-Tribune, my article on the pay gap, and Rep. Carolyn Maloney's (D-NY) side of the issue. (Note: They somehow messed up my article by mixing a draft version with the final version, here is the actual final version.)

I had email questions from several professors about sources for my claim of “no pay gap after controlling for all of the factors that affect earnings." One of my sources is a 2005 NBER working paper "What Do Wage Differentials Tell Us about Labor Market Discrimination?" by June O'Neill (Professor of economics at Baruch College CUNY, and former Director of the Congressional Budget Office), who conducts an empirical investigation using census data, and she concludes:

"There is no gender gap in wages among men and women with similar family roles. Comparing the wage gap between women and men ages 35-43 who have never married and never had a child, we find a small observed gap in favor of women, which becomes insignificant after accounting for differences in skills and job and workplace characteristics.

This observation is an important one because it suggests that the factors underlying the gender gap in pay primarily reflect choices made by men and women given their different societal roles, rather than labor market discrimination against women due to their sex."

The Growing Gender MD Pay Gap CAN Be Explained

Here's the abstract of the paper "The $16,819 Pay Gap For Newly Trained Physicians: The Unexplained Trend Of Men Earning More Than Women" in Health Affairs (Feb. 14, 2011): 

"Prior research has suggested that gender differences in physicians’ salaries can be accounted for by the tendency of women to enter primary care fields and work fewer hours. However, in examining starting salaries by gender of physicians leaving residency programs in New York State during 1999–2008, we found a significant gender gap that cannot be explained by specialty choice, practice setting, work hours, or other characteristics. The unexplained trend toward diverging salaries appears to be a recent development that is growing over time. In 2008, male physicians newly trained in New York State made on average $16,819 more than newly trained female physicians, compared to a $3,600 difference in 1999."

What's causing the growing pay gap?  The authors don't think it's driven by increasing gender discrimination and conclude that:

"It would be difficult to believe that discrimination, after a period of quiescence, has actually been on the rise in recent years. Moreover, our results indicate a trend toward diverging salaries not only in the traditionally male-dominated sub-specialty fields, which experienced an influx of women in our sample, but also in primary care fields."

Despite the title of the paper, the authors actually provide some very plausible explanations for the growing pay gap for MDs:

"It is possible that the continued influx of women into medicine has reached a tipping point, and physician practices may now be offering greater flexibility and family-friendly attributes that are more appealing to female practitioners but that come at the price of commensurately lower pay.

Such an explanation not only is consistent with the pattern observed in the data, but it also suggests that the continued integration of women into the physician workforce is reshaping the practice and business of medicine in ways that need to be measured by variables that are more subtle and comprehensive than salary.

If true, it also implies that female physicians respond to non-monetary elements in a given job offer and are willing to accept lower salaries in return for jobs that better reflect their broader employment preferences.

Thus, instead of being penalized because of their gender, female physicians may be seeking out employment arrangements that compensate them in other—non-financial—ways, and more employers may be beginning to offer such arrangements."

MP: In other words, the trend of male MDs earning more than female MDs is pretty easily explained: female (male) physicians put a higher (lower) priority on flexibility in work hours and family-friendly attributes of their employment arrangements, and are willing to accept lower (higher) financial compensation in return for greater (lower) non-monetary compensation.  That is, it's possible that male and female physicians are not true counterparts in the labor market for MDs, and it therefore could be expected that average starting salaries would reflect the significant gender differences in workplace priorities.  

Next Equal Occupational Fatality Day in 2020

"The next Equal Pay Day is Tuesday, April 20, 2010. This date symbolizes how far into 2010 women must work to earn what men earned in 2009. Because women earn less, on average, than men, they must work longer for the same amount of pay. Equal Pay Day was originated by the National Committee on Pay Equity (NCPE) in 1996 as a public awareness event to illustrate the gap between men's and women's wages."

MP: The next "Equal Occupational Fatality Day" is Sunday October 11, 2020. This date symbolizes how far into the future women are expected to work to experience the same loss of life from work-related deaths that men experienced in just the single year 2008 (4,703 deaths for men compared to only 368 for women), according to BLS data (see chart above). Because women work in much safer occupations and work environments than men, they must work decades longer than men to experience the same number of occupational fatalities. Equal Occupational Fatality Day is being established here as a public awareness event to illustrate the huge gap between men's and women's occupational deaths.

As the recent all-male coal mining deaths in West Virginia illustrate, a disproportionate number of men work in higher-risk occupations that are typically compensated with higher pay like coal mining (almost 100% male), fire fighters (96.6% male), police officers (84.5% male), correctional officers (73.1% male), and construction (97.4% male), BLS data here. A disproportionate number of women work in lower-risk, more comfortable and safer industries, often with lower pay to compensate for the more worker-friendly, indoor, comfortable, air-conditioned office environments, like Office and Administrative Support Occupations (74.5% female), Education, Training and Library Occupations (74.3%), and Healthcare (74.6%). These differences in work environments could likely reflect differences in "revealed preference" by gender - men prefer higher-paid, higher risk occupations, and women prefer lower-paid, lower risk occupations, in general and on average. It might not have anything to do with discrimination, and everything to do with differences in risk tolerances and risk-reward preferences.

To achieve gender pay equity, there will have to be an increase in the number of women in higher-paying, but higher-risk occupations like coal mining. That outcome will certainly reduce the gender pay gap, but it will come at a huge cost: sentencing thousands of women per year to certain fatal occupational deaths. Would closing the pay gap, if it also means closing the gender occupational death gap and exposing thousands of women to work-related deaths each year, really be worth it for women?

So That Everybody Gets a Fair Shot, How About a "Workweek and Occupational Fatality Fairness Act"

In a recent CD post, I argued that we could close the gender-pay gap by closing the gender-hours gap.  Another way to close the gender-pay gap would be to close the "occupational fatality-gap."  For as long as the BLS has been keeping records, females have been significantly under-represented in occupational fatalities, by a ratio of about one female death on the job per 12 male deaths in most years.  Men are disproportionately represented in higher-paying, but higher-risk occupations like mining, fishing, farming and construction.    

With that in mind, I had  a little editing fun here with a recent White House press release titled "Fighting for Equal Pay Workweeks and Occupational Fatalities and the Paycheck Workweek and Occupational Fatality Fairness Act:"

"Today, the President continues to advocate for passage of the Paycheck Workweek and Occupational Fatality Fairness Act, a comprehensive bill that strengthens the Equal Pay Workweek and Occupational Death Act of 1963, which made it illegal for employers to pay wages to men and women to work an unequal number of hours per week, or suffer from differences in occupational deaths who perform substantially equal work.   The Paycheck Workweek and Occupational Fatality Fairness Act is commonsense legislation that, among other things, would achieve the following:

• Better align key Equal Pay Workweek and Occupational Death Act defenses with those in Title VII.
• Bring remedies available under the Equal Pay Workweek and Occupational Death Act into line with remedies available under other civil rights laws. 
• Make the requirements for class action lawsuits under the Equal Pay Workweek and Occupational Death Act match those of the Federal Rules of Civil Procedure.    
• Protect employees who share their own salary workweek or occupational injury or fatality information at work from retaliation by an employer.

The existing legal tools available to remedy pay workweek and occupational fatality discrimination differences by gender are not enough, so Congress needs to pass the Paycheck Workweek and Occupational Fatality Fairness Act now.

From the beginning of his administration, President Obama has worked to ensure that women are paid fairly for their work work exactly the same number of hours per week as men and are exposed to the same work-related fatalities as men. The President is committed to securing an equal pay for equal work workweek and equal occupation death rate for men and women because it’s essential that we build an economy where everyone gets a fair shot at working an equal number of hours regardless of gender and gets an equal chance of getting seriously injured or killed on the job.  American families and the health of our nation’s economy depend on it."

Yes, There's Still a Large Pay Gap.... For MEN Now!

From the NY Times (subscription required):

"Young women in New York and several of the nation's other largest cities who work full time have forged ahead of men in wages, according to an analysis of recent census data.

A recent study shows that women of all educational levels from 21 to 30 living in New York City and working full time made 117 percent of men's wages, and even more in Dallas, 120 percent (see chart above for NYC, 1970-2005, click to enlarge)."

Why the pay gap..... for MEN?

"Women have been graduating from college in larger numbers than men, and that many of those women seem to be gravitating toward major urban areas. In 2005, 53% of women in their 20s working in New York were college graduates, compared with only 38% of men of that age. And many of those women are not marrying right after college, leaving them freer to focus on building careers."

MP: Just wondering if Representative Carolyn Maloney (D-NY), who represents NYC and has long been an advocate of gender equity, will be as concerned about this pay gap for NYC men as she has been when there was a pay gap for women?

Other news stories appear here in the Star Tribune, and here in the Gothamist.

(Thanks to Sanil Kori)

Dying To Do a Man's Job

The chart above shows that men suffered much more from fatal occupational injuries (4,703) in 2008 than women (368), by a factor of almost 13 to 1 (BLS data here).

Given the huge male-female occupational death gap, which has persisted over many decades, it is surprising that it has received so little attention as one important factor that could explain some of the male-female pay gap. To achieve greater female-male pay equity there would most likely have to be an increase in the number of women in higher-paying but higher-risk occupations. That outcome will certainly reduce the gender pay gap, but it would come at a cost—significantly more fatal occupational deaths and injuries for women. Would closing the pay gap, if it also means closing the gender occupational death gap, really be worth it?

Read my full post here at The Enterprise Blog.

Fair Pay Act of 2007: "Unconscionably Ridiculous"

Greg Mankiw discusses "A Comeback for Comparable Worth" on his blogs and cites this Fortune Magazine article "Obama flunks Econ 101: As co-sponsor of a bill that would bureaucratize most of the labor market, the presidential hopeful is flirting with a very bad idea."

The issue here is the Fair Pay Act of 2007, introduced by Tom Harkin (D-Iowa) in April (Illinois Sen Barack Obama is one of 15 co-sponsors), and which intends to correct the wage differentials between men and women. From the Fortune article:

"To the Fair Pay Act's backers, the simple fact that women make 81% of men's full-time earnings is in and of itself proof of discrimination, past and present. Only a pig-headed sexist would argue otherwise."

Well, of course it's not that simple. Fortune cites this BLS report from September 2006, which does show on Table 1 that for the general population, and unadjusted for any important variables that contribute to differences in earnings, women's median weekly earnings ($585) are 81% of men's earnings ($722). But here are a few interesting details from the BLS report:

1. Controlling for just marital status, and looking only at those workers who have "never married," women earn 96.7% of what men earn. Not much of a pay gap there.

2. Controlling for age, and looking at the age group 25-34, women earn 89.1% of what men earn. For older age groups, the pay gap widens. For example, women in the 35-44 age group make only 75.6% of men, as might be expected due to motherhood and child raising.

3. Looking at "median hourly earnings" on Table 9, female workers with a bachelor's degree or higher make 99.6% of what men earn with the same education. No pay gap there.

4. Looking at union workers in Table 9, female union members make only 78% of male workers, compared to female workers not represented by a union, who make 88.2% of male wages! What about "workers' rights" for union women? Help us out Walt G!

The Fortune article concludes: "The Fair Pay Act is, in short, madness. And it is troubling that Obama has associated himself with this kind of legislation - a position that has the feel of a pander to the feminist left. It is certainly not sound economics."

Most or All of The Pay Gap Disappears After Controlling for Marriage and Having Children

The Department of Labor recently released its annual study Highlights of Women’s Earnings in 2008 (HT: Christina Sommers) and opens the report with the following statement:

In 2008, women who were full-time wage and salary workers had median weekly earnings of $638, or about 80% of the $798 median for their male counterparts. In 1979, the first year for which comparable earnings data are available, women earned about 62% as much as men. After a gradual rise in the 1980s and 1990s, the women’s-to-men’s earnings ratio peaked at 81% in 2005 and 2006.

MP: Doesn't the BLS' use of the term "male counterparts" (Webster definition: "one remarkably similar to another") imply an "apples to apples" comparison between male and females workers, as if all relevant explanatory factors have been controlled for, i.e. the ceteris paribus condition has been imposed?

For example, buried in the BLS report are these two interesting facts:

1. In Table 1, it is reported that for those workers who have never been married, women make 94.2% of their "male counterparts."

2. In Table 8, it is reported that for single workers with no children under 18 years old (marital status includes never married, divorced, separated and widowed), women make 95.6% of their "male counterparts."

In these two examples, I would argue that the term "male counterparts" is much more valid than the BLS' use of the term in the opening statement of its report when it is referring to all workers.

Since marriage and having children affect male and female earnings differently, men and women workers can't really be considered "counterparts" in a statistical sense, and any unadjusted comparisons would be comparing apples to oranges. In fact, some research has concluded that the factors of age, marriage and motherhood explain all of the male-female pay gap.

For example, in a 2005 NBER working paper "What Do Wage Differentials Tell Us about Labor Market Discrimination?" by June O'Neill (Professor of economics at Baruch College CUNY, and former Director of the Congressional Budget Office), she conducts an empirical investigation using Census data and concludes that:

"There is no gender gap in wages among men and women with similar family roles. Comparing the wage gap between women and men ages 35-43 who have never married and never had a child, we find a small observed gap in favor of women, which becomes insignificant after accounting for differences in skills and job and workplace characteristics.

This observation is an important one because it suggests that the factors underlying the gender gap in pay primarily reflect choices made by men and women given their different societal roles, rather than labor market discrimination against women due to their sex."

The Narrowing and Often Disappearing Pay Gap

From today's NYTimes Business Section article "For Women, a Slow Narrowing of the Pay Gap":

"In 1979, women working full time made only 63 percent as much pay as men, according to data compiled by the Bureau of Labor Statistics. Now working women make 81 percent as much as men (see chart above). What is the reason for the disparity? Discrimination? Choices that women and men have made? That is not entirely clear."

Tables 1 and 4 of the original BLS report used by the NY Times helps to answer some of the questions posed above:

1. Controlling for marital status, and looking only at those workers who have "never married," the BLS reports that women earned 93.8% of what men earned in 2006 for full-time workers and 98.6% for part-time workers.

2. For workers in the 25-34 year old category, female earnings are 88.2% of male earnings.

A 2005 NBER study also helps answer the NY Times' questions:

"There is no gender gap in wages among men and women with similar family roles. Comparing the wage gap between women and men ages 35-43 who have never married and never had a child, we find a small observed gap in favor of women, which becomes insignificant after accounting for differences in skills and job and workplace characteristics."

Upcoming Pay Gap Smackdown with Rep. Maloney

I wrote recently here about the problems with the AAUW's report on the "pay gap." Using the information in that blog posting, I wrote a 750-word commentary that appears in my local paper, the Flint Journal ("Graduates, Be Assured That Gender-pay-bias Claim Not Well-founded").

Next week, a 625-word version of my commentary will be distributed nationally as a Pro-Con "Pay Gap Smackdown" between me and Rep. Carolyn Maloney (D-NY), who is one of the leading drivers in Congress on the issue. Stay tuned to CD for specific placements in newspapers around the country on that one.