Are Women Really Still Earning Less Than Men and Why?

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Christine Emba
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Art Credit: Nima Salimi

The scene: a costume party in a crowded Brooklyn apartment. Standing in front of me at the makeshift bar is a woman in a jingling, coin-covered minidress and a man in a T-shirt covered in dollar bills.

Intrigued, I ask what their costumes represent, expecting an obscure literary reference or an esoteric psychological concept (yes, it’s that kind of party).

“I’m 77 cents,” she giggles. “He’s a dollar. We’re the wage gap.”

Typical hipster awareness-raising, right? Maybe. But from Patricia Arquette’s Oscar-night stand for “wage equality once and for all” to President Obama’s State of the Union reminder that “it’s 2015” and past time for Congress to ensure that women are paid the same as men for doing the same work, it’s clear that the issue of wage equality has become fixed in the public mind.

Articles and op-eds abound. Some bemoan an impossibly wide gap between men and women’s pay held in place by unrepentant misogyny, while others loftily declare that angry feminists are making mountains out of molehills and that wage inequality is a myth.

Even so, it's hard to disagree with the idea that women deserve equal pay for equal work, and most can admit that there’s at least some discrepancy between how much women and men make. Unfortunately, an inability to agree on the extent of the problem makes it that much more difficult to solve.

77 of One, 91 of the Other

The facts are clear on one thing: On average, women make less than men, from Hollywood to Silicon Valley and all the way down to entry-level work. One of the most eye-opening findings from last year’s Sony hack was that Jennifer Lawrence was paid significantly less than her male co-stars for her role in American Hustle, even though she was arguably the biggest star in the film. In 2013, Yahoo CEO Marissa Meyer made $34 million lessthan the male COO who worked under her.

But once we acknowledge that basic truth, the figures get a little cloudy.

My costumed co-partier used her minidress to reference the commonly cited statistic that women make 77 cents for every dollar men earn performing the same work. The number comes from a 2012 Census Bureau report, which found that the median earnings of full-time female workers were 77 percent of the median earnings of full-time male workers.

But since the report compares male and female workers, regardless of how they define “full-time,” the number can be misleading. The technical definition is 35 hours per week, but men tend to work more hours than women, meaning that the stat could be comparing men working 40 hours per week to women working 35. If we tighten up the comparison to only those men and women who work 40-plus hours per week, the gap shrinks to 87 percent. And if we adjust further to balance for things like education level, industry, job title, and experience, the gap closes a little more, to 91 percent.

“Seventy-seven cents on the dollar” is an eye-opening phrase, so it’s no wonder that equal-wage advocates have made it their rallying cry. As one labor economist said, “You have to point to some number in order for people to understand the facts.” But if the 91-percent figure is the more accurate one, it’s understandable that some naysayers have accused equal-wage advocates of stretching the truth.

Whether it’s 91 or 77, turning the pay gap discussion into an exercise in finding the “best” number to define a bad problem can be an unnecessary distraction. While the numbers aren’t set, there’s a clear enough picture of the problem: Women are making less. The more important question to answer is why.

Minding the Gap

The critics least likely to believe that wage inequality is a serious problem tend to blame the gender gap on choice—sure, women may be paid less than men, but it’s because they pick less lucrative jobs, decide to negotiate less, and work fewer hours. But if we’re being realistic, we have to admit that few choices are made in complete independence. In many cases, social factors help shepherd women into certain career paths and prod them to accept lower pay.

At the early stages, curbing wage inequality might start with encouraging young women to go into any profession they want, not just those that deep-seated cultural norms deem appropriate and achievable for women. Whether it's showing little girls that they can be scientists too, encouraging young women to explore disciplines traditionally seen as male-only, or just pointing out that the Supreme Court could always use a few more female justices, closing the gap could mean making it clear to women that it’s not somehow “unfeminine” to pursue higher-paying, higher-profile jobs.

But that expectation is only part of the problem. Even when women are in the same professions as men, the wage gap opens up early, sometimes before the job even starts. Women are four times less likely than men to ask for higher starting salaries or raises later on, and shy away from rocking the boat with aggressive negotiation. It’s not because we don’t like making money, but because we tend to display less confidence and worry about negative repercussions.

That fear isn’t totally baseless: Studies have shown that women who advocate for themselves are often seen as pushy and unpleasant, while men who do the same don’t garner the same reaction. Jill Abramson, the former executive editor of The New York Times,said that just before she was fired from her position, she had confronted her bosses about being paid considerably less than the male editor who had preceded her in the role.

But for most women our age, coming across as too confident isn’t yet an issue, and asking for a higher salary or raise isn’t being pushy—it’s just good business sense. As wages compound year after year, a $5,000 difference in starting salary can easily bloom to a $500,000 difference in lifetime earnings.

Luckily, women today are ever more aware of these issues (maybe you've heard of a little book entitled Lean In?), and as we continue to break down the barriers, we might see the gap begin to shrink. However, there’s one more factor that has a greater effect than all of the others combined.

First Comes Love, Then Comes Marriage…

The wage gap starts off on the narrower side. Women typically earn about 90 percent of what men are paid until they hit age 35. After that, median earnings for women fall to around 75 percent of what men are paid.

Why? Well, only women have the biologically impressive—but socially complicating—ability to become pregnant and bear children. And while it’s often personally fulfilling, doing so can have a less-than-positive effect on earning power.

Even if they don’t initially plan on it, mothers are usually the default family members to drop out of the workforce and care for the kids. In doing so, they lose out on seniority and often end up looking for a new job after an extended period outside of the labor market—two factors that translate to a smaller paycheck when they’re finally re-employed.

Even moms who never left the workforce often suffer penalties that widen the gap: Mothers are less likely to be hired for jobs and tend to be seen as less competent and committed than their male colleagues, even if they’re working just as hard. Studies have shown that men average a 6 percent gain in earnings when they have children, while women’s earnings decrease by 4 percent for every child they have.

Women aren’t going to (and shouldn’t have to!) give up on having children in order to make a fair wage. And having them leave the workforce isn’t good for companies either: The Harvard Business Review recently announced that women make teams smarter, and research shows that having female members helps corporate boards make better decisions.

To lower wage inequality and keep women in the workforce, a good first step might be for companies to rethink their policies on family leave, making it more substantial and less of a gamble. For example, when Google increased paid maternity leave from 12 to 18 weeks, the number of mothers who left the company dropped by 50 percent.

As individuals, bosses can help by reevaluating their unexamined beliefs. Rather than assuming the hardest workers are those who are mysteriously able to stay in the office until midnight, they can promote more flexible schedules, and try to reward high-quality work no matter who it’s from.

But What If the Gap Never Closes?

A renewed focus on gender wage inequality can help open our eyes to social and structural problems we would otherwise overlook, and may push us to explore solutions that could make women’s lives better overall. But ultimately, a gimlet-eyed focus on “closing the gap” may lull us into a false understanding of what’s really important.

Not everything can be measured in dollars and cents. Some women forego higher salaries because they value vocations that pay in a different way, whether in the satisfaction of caring for a family or the day-to-day flexibility that a hard-charging career might not allow. And that’s perfectly fine: We shouldn’t use the fact of the wage gap to badger happy stay-at-home moms into entering the workforce, or to force women who are content with their professional achievement to work longer hours, just to prove that they’re worthwhile members of society.

In the short term, dismantling the factors that keep women from wage parity is a worthwhile goal. But activists and naysayers alike should remember that just because women may make less today, it doesn’t mean we’re worth less. Even as we work to close the gap, we should remember to fully value the manifold ways women contribute to society, whether running companies or running homes.