Facts That Aren’t: Women make 77% of what men do for the same work

“A woman deserves equal pay for equal work.” – Barack Obama, January 28, 2014

Women make 77 cents for every dollar men make for the same work. This is particularly egregious discrimination that we ought to be past by now, don’t you think?

Hmmm.

This statistic always gave me pause. For one thing, I couldn’t resolve it with what I knew personally about women’s salaries. Any visibility I ever had into such revealed that they were paid as I’d expect—as professionals, based on experience and ability. Yes, that’s anecdotal, but doesn’t it seem like I’d occasionally see evidence of such a gap?

What really made me doubt it was basic economics. Payroll is, by far, the biggest single entry in a business budget. Where are all of the all-female businesses? Any company that could realize a whopping 23% break on salaries simply by hiring all women would have done so long ago.

So where does the number come from?

This figure comes from adding up the salaries of all of the full-time jobs held by women, and dividing by the number of women; then adding up the salaries of all of the full-time jobs held by men, and dividing by the number of men. That’s it.

It does not control for job type, education, experience, or life choices. For example, women are much more likely than men to leave the workforce altogether for a period of several years to care for a child. Men are much more likely than women to hold high-risk, high-paying jobs, like offshore oil rig work or high-rise construction. These conditions, and many others like them, are not considered at all.

Here is an excellent Freakonomics discussion, including intensive research on the topic that tracks male and female University of Chicago MBAs from 1990 to 2006.

When you say women make 77 cents for every dollar men make, you are comparing the average salary of all full-time working women to the average salary of all full-time working men. There is nothing else in the equation. Adding “for the same work” to it is completely nonsensical.

(And actually,whatever the usefulness of the number, it’s 81 cents on the dollar now.)

When average pay is compared meaningfully—for men and women of like qualification in like jobs—the gap narrows considerably. (Oh, and guess what—sex-based discrimination when qualifications and jobs are substantially similar has been illegal for more than 50 years.)

Is the remaining gap being done to women, or by women? This Forbes piece cites UK research and determines that

“There’s no real discernible gender pay gap up to the age of 30. It is also true that the average age of a first pregnancy carried to term is a little over 30 years old these days. We know that there’s a fatherhood pay premium (fathers earn more than non-fathers), lesbians earn more than heterosexual women (all of these are averages, of course) and never married no children women in their 40s make more (fractionally, a percentage point or two more) than men of the same age. All of this is pointing us towards the idea that it’s the children that are causing that pay gap.”

I suspect that most women who leave the workforce to care for a child—or indeed, most couples who make that decision together—would call it a trade-off that’s worth it. That it contributes to a gender pay gap is therefore plausibly an indicator of empowerment of women, not discrimination against them.

“The point here is not that there is no wage inequality. But by focusing our outrage into a tidy, misleading statistic we’ve missed the actual challenges.” – Hanna Rosin

That’s exactly right. Whether these (much smaller) gaps that remain after ensuring a level field of comparison are “actual challenges” may be interesting and research-worthy, particularly if we are willing to genuinely consider the notion that discrimination is not a major factor.

However, whether because of ignorance, malice, or something else, no one claiming that women make 77% of what men do for the same work is telling you the truth.

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