Two Pinocchios From Washington Post: The ‘Equal Pay Day’ factoid that women make 78 cents for every dollar earned by men

Click here for the story by Glenn Kessler. 

"“We have to pass pay equity for women workers. It is not acceptable that women are making 78 cents an hour compared to men.”

— Sen. Bernie Sanders (I-Vt.), speech to the National Press Club, March 9, 2015
If it’s springtime, it must be time for gender equity claims.

A year ago, The Fact Checker awarded Two Pinocchios to President Obama for claiming that “the average full-time working woman earns just 77 cents for every dollar a man earns.”

For a period, the president dropped that number from his remarks, but lately it has crept back into his speeches, especially when he’s speaking to Democratic audiences. And Democrats also continue to assert this, as evidenced by the statement above by Sanders, who is considering run for Democratic presidential nomination. The all-but-certain campaign of former secretary of state Hillary Rodham Clinton is also expected to make gender inequality a key theme.

Sanders, to his credit, updated the statistic to 78 cents, which reflects the latest Census Bureau data. But it’s still misleading.

Let’s take a refresher course in advance of “Equal Pay Day” — April 14, 2015 — which symbolizes how far a woman must work into the next year to make as much as a man.

The Facts

Few experts dispute that there is a wage gap, but differences in the life choices of men and women — such as women tending to leave the workforce when they have children — make it difficult to make simple comparisons. That’s what’s so facile about repeatedly citing “78 cents” or “77 cents.”

Democrats are relying on a simple calculation from the Census Bureau: a ratio of the difference between women’s median earnings and men’s median earnings. (The median is the middle value, with an equal number of full-time workers earning more and earning less.) That leaves a pay gap of 22 cents.

But the Labor Department’s Bureau of Labor Statistics shows that the gap is 18 cents when looking at weekly wages. The gap is even smaller when you look at hourly wages — 13 cents — but then not every wage earner is paid on an hourly basis, so that statistic excludes salaried workers.

Annual wage figures do not take into account the fact that teachers — many of whom are women — have a primary job that fills nine months out of the year.  The weekly wage is more of an apples-to-apples comparison, but it does not include as many income categories. (Still, we should note that the wage gap likely would increase if part-time workers were included in the statistics, as is done in Canada.)

June O’Neill, a former director of the Congressional Budget Office who has been a critic of the 77-cent statistic, has noted that the wage gap is affected by a number of factors, including that the average woman has less work experience than the average man and that more of the weeks worked by women are part-time rather than full-time. Women also tend to leave the workforce for periods to raise children, seek jobs that may have more flexible hours but lower pay, and choose careers that tend to have lower pay.

Indeed, BLS data show that women who do not get married have virtually no wage gap; they earn 95 cents for every dollar a man makes. (Another interesting fact: Women who are members of unions make almost 91 cents compared to their counterparts.)

In 2011, economists at the Federal Reserve Bank of St. Louis surveyed economic literature and concluded that “research suggests that the actual gender wage gap (when female workers are compared with male workers who have similar characteristics) is much lower than the raw wage gap.” They noted that women may prefer to accept jobs with lower wages but greater benefits (more flexible parental leave) so excluding such fringe benefits from the calculations will exaggerate the wage disparity. One survey, prepared for the Labor Department by the CONSAD Research Corp. during the George W. Bush administration, concluded that when such differences are accounted for, much of the hourly wage gap dwindled, to about 5 cents on the dollar.

A 2013 article in the Daily Beast, citing a Georgetown University survey on the economic value of different college majors, showed how nine of the 10 most remunerative majors were dominated by men:

1.   Petroleum Engineering: 87% male
2.   Pharmacy Pharmaceutical Sciences and Administration: 48% male
3.   Mathematics and Computer Science: 67% male
4.   Aerospace Engineering: 88% male
5.   Chemical Engineering: 72% male
6.   Electrical Engineering: 89% male
7.   Naval Architecture and Marine Engineering: 97% male
8.   Mechanical Engineering: 90% male
9.   Metallurgical Engineering: 83% male
10. Mining and Mineral Engineering: 90% male

Meanwhile, nine of the 10 least remunerative majors were dominated by women:

1.  Counseling Psychology: 74% female
2.  Early Childhood Education: 97% female
3.  Theology and Religious Vocations: 34% female
4.  Human Services and Community Organization: 81% female
5.  Social Work: 88% female
6.  Drama and Theater Arts: 60% female
7.   Studio Arts: 66% female
8.   Communication Disorders Sciences and Services: 94% female
9.   Visual and Performing Arts: 77% female
10. Health and Medical Preparatory Programs: 55% female

We do not want to suggest there is no pay gap; in fact, just about every example above reported that there was some sort of gap in wages.  A report by the American Association of University Women found that, after accounting for a variety of factors, including college major and occupation, there was an unexplained 7 percent gap one year after graduation. The gap then grew to 12 percent after 10 years.

Moreover, there is certainly a case to be made that women should be encouraged to enter lucrative fields now dominated by men. That might help mitigating another aspect of a pay gap — the long-term impact of even slightly lower wages. A 2004 study for the Institute for Women’s Policy Research, by Stephen J. Rose and Heidi I. Hartmann, calculated that across 15 years, prime age women earned just 38 percent of what prime age men earned – an apparent wage gap of 62 percent.

The Pinocchio Test

A year ago, The Fact Checker said “the president must begin to acknowledge that ‘77 cents’ does not begin to capture what is actually happening in the workforce and society.”

In a town hall meeting Oct. 3, 2014, the president acknowledged some of this nuance: “Women on average make 77 cents for every dollar a man makes. What folks will tell you sometimes is you can’t really compare the situation, because a lot of women, by choice, end up working less when they have kids, decide to stay home, and so it’s not the same thing.” He went on to note that there are still examples of women getting paid less than men for “doing the exact same job.”

That’s certainly the case, but it does not excuse a broad-brush approach that relies so much on a single factoid. Unless women stop getting married and having children, and start abandoning careers in childhood education for naval architecture, a large gap in wages will almost certainly persist.

So it’s long past time for politicians such as Sanders to stop repeating the “78 cent” factoid without the proper context — especially if they are giving speeches on Equal Pay Day.

We reaffirm our Two Pinocchio rating."