Monday, October 24, 2016

My response to the San Antonio Express-News on gender pay equity

Click here to see the original article.

There is more to gender pay issues than was mentioned in "Women's pay parity is goal of local panel" (by Josh Baugh, Oct. 23).
The story mentioned “Women make less money than their male counterparts for doing the same work, studies continue to show” while later saying “In the U.S., women make 79 percent of what men earn.”
One might conclude that women are only getting 79 percent of what men earn for the same work. This is not the case.
Many factors influence how much a worker is paid, including level of education, college major, years of experience and hours worked. Those might not be the same, in the aggregate, for men and women.
Looking at college majors, economist Mark Perry found that for eight of the top ten paying majors (like computer science and electrical engineering), at least 80% of the students are men. The only major in the top ten that was majority female was nursing.
Overall, 72% of the college degrees in the top ten majors combined go to men. In the next ten that percentage falls to 65.8%.
For each succeeding group of ten majors, the percentage of degrees going to men falls. The 49th highest (social work) is about 84% female and the 50th (biology) is about 58% female.
Colleges should encourage more women to major in the higher paying professions (or at least not actively discourage them). This could mean a little more mentorship from professors, including the male ones.
But the pattern is clear. Men dominate the highest paying majors, which explain some of the pay gap.
Turning to hours worked, a study by the Bureau of Labor Statistics showed that 25.5% of men working full-time worked 41 or more hours per week in 2013. That was true for only 14.3% of women. In general, men work about 15% more hours per week.
Based on this study, Mark Perry concluded that “for those workers with a 40-hour workweek, women earned 89.6% of median male earnings.”  Once hours worked are controlled for, “almost half of the raw 17.5% pay gap reported by the BLS disappears.”
June O’Neill, former Director of the Congressional Budget Office, concluded that: “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.”
Another factor is what economists call a “compensating wage differential.” This is when you get paid more for doing dangerous or unpleasant work, like working on arctic oil rig.
How does this relate to the gender pay gap? It appears that men tend to work more dangerous jobs because about 93% of work place deaths each year are men.
To show how hard it is to achieve pay parity, there is a pay gap among White House staff workers, even with a liberal Democrat as president. The female staffers make about 9% less than the male staffers.
Lesley Clark of McClatchy news quoted a White House spokesman complaining about this study saying it only “looked at the aggregate of everyone on staff, and that includes from the most junior levels to the most senior.”
But the same is true for the statement that women earn 79 percent of what men earn for the same work. It is an aggregate that does not take into account key differences.
If we want to educate women about the disparity and give them tools to reduce it, we need to first acknowledge the underlying market realities.

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