Monday, April 3, 2017

Some thoughts on Equal Pay Day, an annual event that spreads statistical misinformation about the gender pay gap

From Mark Perry.
"The American Association of University Women (AAUW) and the National Committee on Pay Equity (NCPE) are major participants in the feminist propaganda machine that mobilizes forces every April and engages in statistical misrepresentations to publicize the annual feminist holiday known as Equal Pay Day. According to the NCPE, Equal Pay Day will fall on Tuesday, April 4 this year, based on a 20% unadjusted difference in median annual earnings for women and men in 2015 when absolutely nothing relevant is controlled for that would explain income differences like hours worked, marital status, number of children, education, occupation, and the number of years of continuous uninterrupted job experience. Therefore, Equal Pay Day on April 4 this year misleadingly represents how far into 2017 a typical woman will allegedly have to continue working to earn the same income that her male counterpart earned last year for doing the exact same job.

This year, Facebook COO Sheryl Sandberg is joining in (“leaning in”) to the annual dissemination of statistical misinformation:
We have to understand that the pay gap is happening to women and men with similar jobs that require similar skills and similar educational levels — and that has a real impact. The number of working women living in poverty would be cut in half if women were just paid the same as men. So this is important for our businesses and this is important for our country.
That type of verifiably false statement about the allegedly widespread practice nationwide of employers illegally using dual-pay scales based on gender follows in a long tradition of feminist legerdemain this time of year. For example, in April of 2015 the AAUW’s then-executive director Linda D. Hallman sent a mass email that made this similar verifiably false statement (emphasis added):
Think about it: Women have to work almost four months longer than men do to earn the same amount of money for doing the same job. What’s more, we have to set aside a day each year just to call the nation’s attention to it.
Sandberg’s and Hallman’s statements are statistical fairy tales based on the false assumption that women get paid 20% less than men for doing exactly the same work in the exact same occupations and careers, working side-by-side with men on the same job for the same organization (at Facebook?), working the same number of hours per week, traveling the same amount of time for work obligations, with the same exact work experience and education, with exactly the same level of productivity, etc. In other words, the AAUW, NCPE, progressives, and gender activists like Sandberg falsely assume that employers all across America are using coupons like the one above to get a 20% wage discount for every woman they hire, and it’s that rampant, unjust and blatant gender discrimination that is the culprit behind the gender pay gap.

Stated differently, these groups and activists must actually believe that companies and organizations across the country hire and pay employees according to an explicit dual-pay scale by gender: If organizations hire men at $100,000 per year, they will only pay equally-qualified women $80,000 per year. In other words, the AAUW, NCPE and Sandberg are claiming that thousands of organizations across America are illegally and flagrantly violating the Equal Pay Act of 1963, and those illegal actions are going undetected? Only in some ideological fantasy world could anybody possibly believe that! And if those blatant illegal violations are so supposedly widespread, the NCPE and gender activists should be encouraging female victims to report that employer misconduct to the US Equal Employment Opportunity Commission. Filing a charge of gender discrimination is easy, here’s the website to start the process.

Related: See my related CD post “Evidence of employers paying women 20% less than men for the exact same work is as elusive as Bigfoot sightings.”

The reality is that you can only find a 20% gender pay gap by comparing raw, aggregate, unadjusted full-time median salaries, i.e. when you control for NOTHING that would help explain gender differences in salaries like:
  1. Hours Worked: The average man working full-time worked nearly two more hours per week in 2015 compared to the average woman, see my analysis here.
  2. Type of Work: As I reported on CD last December, men represented 92.4% of workplace fatalities in 2015 (and the male share of job-related deaths has been consistently that high in every previous year) because men far outnumber women in the most dangerous, but higher-paying occupations like logging, mining and roofing that have the greatest probability of job-related injury or death. In contrast, women, more than men, show a demonstrated preference for lower risk occupations with greater workplace safety and comfort, and they are frequently willing to accept lower wages for the greater safety and reduced probability of work-related injury or death.
  3. Marriage and Motherhood: a) single women who have never married earned nearly 94% of male earnings in 2014 (but that does not control for anything else like hours worked, age, experience, education, occupation, children, etc.); b) more women than men leave the labor force temporarily for child birth, child care and elder care, and c) women, especially working mothers, tend to value “family friendly” workplace policies more than men, according this Department of Labor study.
Most economic studies that control for all of those variables conclude that gender discrimination accounts for only a very small fraction of gender pay differences, and may not even be a statistically significant factor at all. For example, as Andrew Biggs and I pointed out in a 2014 WSJ op-ed:
In a comprehensive study that controlled for most of the relevant labor market variables simultaneously—such as that from economists June and Dave O’Neill for the American Enterprise Institute in 2012—nearly all of the 23% raw gender pay gap cited by the UUAW can be attributed to factors other than discrimination. The O’Neills conclude that, “labor market discrimination is unlikely to account for more than 5% but may not be present at all.”

On Equal Pay Day, when groups like the AAUW and NCPE point to a 20% unadjusted gender pay gap and demand that the pay gap be completely closed, what they are really saying is that they want women to:
  • Work longer hours on average like men do;
  • Work in riskier, less safe occupations like logging and commercial fishing like men do where the chances of getting injured or killed are much greater;
  • Work in more physically demanding occupations like farming, construction, roofing, logging and working on oil rigs, where they’d be working alongside men outside in 100 degree weather in the summer and below zero weather in the winter;
  • Accept fewer jobs in family-friendly workplace environments like teaching elementary school that coincide with their children’s schedules (with summers off, etc.), and accept more jobs in family-unfriendly workplace environments like being an over-the-road truck driver or being an oil field worker.
  • Take less time off, or no time off, for child birth and child care to minimize their time away from the labor force that might affect their earnings.
Bottom Line: Those who publicize Equal Pay Day and demand that the unadjusted 20% pay gap be reduced to zero are unknowingly really advocating that men and women play completely interchangeable roles in the labor market and identical roles in their family responsibilities; and that’s an outcome I don’t think most women (or men) really want. As the Department of Labor concluded in 2009, “The differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers.” They also concluded that “the raw wage gap should not be used as the basis to justify corrective action.”

Therefore, once we adjust for all of the factors that contribute to the raw difference in pay by gender, Equal Pay Day actually probably fell close to December 31 of last year. Or maybe the first week of January…. but NOT the first week of April. Women should be embarrassed by the economic myth that is annually perpetuated on their behalf by Equal Pay Day, which suggests that gender discrimination in the labor market burdens them with more than 13 additional weeks of work to earn the same income as their male counterparts working for the same organization earned the previous year – when that’s not even remotely true."

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