The Gender Pay Gap

The “Gender Pay Gap” as declared by Liberals is there. However, the size, scope and reasons they use to describe it have little to do with the facts.

Basically, the basis of the “Gender Pay Gap” says that women make 77% of men’s earnings. This “statistic” was derived from taking the average earnings of all full-time female workers and comparing it to the average earnings of all full-time male workers. For example, if the average annual earnings for males is 45,000/year, women would have to make only $34,650/year to earn 77% of a male’s pay. The problem is that it is raw numbers without context. Why is that important? Because the choices human beings make alter the context and importance of the numbers.

In this article I am referring to two documents, from the American Association of University Women’s Graduating to a Pay Gap The Earnings of Women and Men One Year after College Graduation and a report from Georgetown University, What’s It Worth? The Economic Value of College Majors.

Graduating to a Pay Gap chronicles in great detail about how far women start behind men as far as pay goes. The information is quite exhaustive (and exhausting) and repeatedly makes the point that women make less than men right from the start and fall even further behind as they progress through their lives. This document takes every opportunity to use flashy charts and fancy words to stress that “women make from 77% to 82% of what men make.”

Except that they don’t.

Well, they do, but not for the reasons you think.

If you read, really read this document, you will see one sentence in the Executive Summary on page two and this paragraph at the end of page 20. The sentence in the executive summary is a summary of this passage:

One-third of the pay gap is unexplained.

Although education and employment factors explain a substantial part of the pay gap, they do not explain it in its entirety. Regression analysis allows us to analyze the effect of multiple factors on earnings at the same time. One might expect that when you compare men and women with the same major, who attended the same type of institution and worked the same hours in the same job in the same economic sector, the pay gap would disappear. But this is not what our analysis shows. Our regression analysis finds that just over one-third of the pay gap cannot be explained by any of these factors and appears to be attributable to gender alone. That is, after we controlled for all the factors included in our analysis that we found to affect earnings, college educated women working full time earned an unexplained 7 percent less than their male peers did one year out of college (see figure 10; see also figure 13 in the appendix). [Emphasis mine]

Looking at the raw numbers we have a 23% pay gap (100 minus 77 equals 23). When all variables introduced by human choice (which I will detail shortly) are factored out, that 23% shrinks... to 7%. So there is a pay gap, it’s just not anywhere near as bad as you have been led to believe.

Now we can look at the human choice elements that account for most of that 23% pay difference. To do that, I am going to mash together information from several tables from the What’s It Worth? document.

First of all, the college majors that produce the highest salaries in the job market are, along with the percentage of female/male graduates:

Median Percent Female Graduates Percent Male Graduates
Petroleum Engineering 120,000 13 87
Pharmacy Pharmaceutical Sciences and Administration 105,000 52 48
Mathematics and Computer Science 98,000 33 67
Aerospace Engineering 87,000 12 88
Chemical Engineering 86,000 28 72

Now we look at the college majors that pay the least:

Median Percent Female Graduates Percent Male Graduates
Counseling Psychology 29,000 74 26
Early Childhood Education 36,000 97 3
Theology and Religious Vocations 38,000 34 66
Human Services and Community Organization 38,000 81 19
Social Work 39,000 88 12

So a vast majority of women are choosing a degree that has a sub-optimal ROI (Return On Investment). If I spend $50,000 on a college education for myself, and my chosen career field will earn me either $30,000 or $90,000 a year, my ROI is a three times better if I go the $90k career path instead of the $30k. I am not going to get into any “traditional gender role” job choice discussions because that is germane to this point. These people picked what they picked and that is their choice, no matter the reason why. I am all for programs that inspire women to enter in STEM (Science, Technology, Engineering and Mathematics) fields to help them achieve a better ROI in their college investment. However, there are many factors that cause a person to pick which field they want to study, and that is their choice. Don’t diminish them for their choices.

I will agree with Graduating to a Pay Gap in the fact that women who take the lower-paying career fields end up with higher ratios of student loan debt, which exaggerates their financial struggles. Please refer back to the ROI paragraph above.

Now let’s ask a serious question with a non-obvious answer. Why don’t you see a lot of females going into the Petroleum Engineering field for example? One possible reason could be having to work on an offshore oil rig. Imagine working 12-16 hours a day, 7 days a week for 90 days at a stretch. With no access to goods and services most of us are used to having at our fingertips. Or in the middle of the desert. In either case you can't hop in your car and hit up a Redbox, or a fast-food establishment, etc. Both of these environments are also more physically dangerous and has way less creature comforts than a regular office setting.

I can also relate this personally. I worked for UnitedHealthcare for five years. In the office I worked in, there were between 50-75 workers in the office. Other than the office manager, there were exactly *FIVE* men, including myself. Two Medical Doctors, one Compliance monitor, a Contract Negotiator and myself. The schedule was fixed at 8-5 Monday-Friday. Any kind of overtime was strictly forbidden. Flex time was also frowned upon. In my job as I write this, I am a technician who services various electronic and electro-mechanical equipment on-site. This involves working different shifts, either 8am-5pm or 1pm-10pm. Weekend work is routinely scheduled and you can work 7-10 days straight. Overtime is plentiful. Lifting and moving 30-40 pound pieces of equipment is constant. In certain situations, you can get pulled into work during off days or called to another territory in case of a hurricane or other disaster. Most of the work is outdoors, year-round, hot and cold, dry and rain. In my current work group, there are 59 technicians, three are women.

In summary, Job 1 is an indoor office setting with a stable schedule, no physically demanding work and no overtime. Staffing is 90+% women. Job 2 is mostly outdoors, changing schedule, physically demanding with no help (you're out there by yourself), lots of overtime. Staffing is 5% women. Pay for both are within 10%. What does this mean? It looks to me like women prefer the stable job. Does this mean they can't do my job? That's an absurd thought because women are doing the work. I can train any person, male or female to do my job if they want to learn. When given a choice between a fixed schedule, no heavy lifting and slightly lower pay vs. more pay, more work, physically demanding and various hours, I am not surprised most women pick the first job. They more than likely have children and other home obligations that the overtime and shifting schedules of my current job would put a great strain on the home life. This is not a "good" or "bad" thing. It is a choice that can be made.

A friend did point out that in the 60’s, many of the programmers in for the Moon project were women. The pay rates of programmers began to rise once men started entering that portion of the job market. Now, this pay increase could be attributed to how valuable the skill was considered. I am pretty sure programmers were considered a clerical-type position back when there were very few computers. As more and more computers were made and were able to do more functions and thus needing more programmers, the pay rate for this skill set would have risen due to the increase of the value of that particular skill, i.e., the pay went up because the value of that skill was worth more. That could have attracted men into that field. Some other factors could also be at play. I don’t know, I am not in a position to do any research on the subject.

For the most part, men will work more physically demanding jobs and for longer hours, both of which are valuable commodities when negotiating how much someone is paid for their work. Men are also more assertive in negotiating the pay, benefits and parameters of a job than women.

Women will also by and large sacrifice a good portion of their lifetime earnings to fulfill their biological purpose: giving birth to children and being the stabilizing center of the family. Don’t discount that critical role, it’s why we have a society and population in the first place. Don’t dismiss motherhood because it doesn’t bring home a paycheck. A Mother through her efforts shapes the very future of our society as a whole, and that ROI pays more than any paycheck could.

In closing, do I think that work should be paid equitably according to skills, knowledge and experience and not gender? Damn straight Skippy. Do I think the government should mandate it through law as Graduating to a Pay Gap suggests? No way. Because no matter how you write the law, there will always be a certain je ne sais quoi that causes one person’s work product to be more valuable (and thus deserving higher pay) than the other. Leave those intangibles to the free market.


Related Articles

Getting paid for your work

Basic Economics

The concept of a job

Free Joomla! templates by Engine Templates