Debunk’d – The Wage Gap

According to many people the wage gap means that women make 77 cents for every dollar a man makes. In fact, even President Obama has said, “It’s not a myth; it’s math.”[1]. This sounds like a terrible thing, especially in the year 2016 where we all have equal opportunity. We should be standing up and fighting against this wage gap, but there is one problem: The wage gap doesn’t exist. Many people quote different facts and figures that argue to support this theory but there are too many inconsistencies and factors to indicate that there is a serious pay gap.

Before we continue, there has to be a clarification in terms. Wage is what a worker earns for the work they do. This includes salaried as well as hourly employees. For example employees of In-N-Out burger earn a base wage of $11 an hour. Earnings, on the other hand, is the total amount of money gained within a set time period. Using the previous example, the earnings of a new In-N-Out employee working 40 hours a week before taxes would be $440. This is a significant difference in language because while there doesn’t exist a wage gap, there is indeed an earnings gap. This earnings gap is easily explainable and is not in any way affected by women’s wages compared to equally tenured and qualified male coworkers.

Take a look at this chart from the Bureau of Labor Statistics. If you look closely you’ll see that as women and men age suddenly they make less money on a weekly basis. For example, the average earnings of a woman aged 45-54 is $780/wk compared to her similarly aged colleague who is male and makes roughly $1,011/wk. The first instinct of any person would be to use this to justify the pay gap. This certainly does not bode well for the argument against such statistic. When looking at other mitigating factors, however, it is seen that there is far more explanation to this earnings difference than meets the eye.

Maternity leave is a more significant factor in the average earnings of women than men. There is a necessary biological and medical reason that women need time off of giving birth to a child be it natural or cesarean, whereas men don’t absolutely need the time off of work. The FMLA Mandates that US Companies of 50+ employees and other work related requirements must allow 12 weeks of unpaid maternity leave for mothers [3]. Note that this is unpaid maternity leave. Many people call this an unfair policy but let’s take a look at other statistics about women and children in the workforce. Taking a look at the Bureau of Labor Statistics, 64.2% of women with children under the age of 6 participated in the labor force [4].  Take into consideration that 58.6% of the women in the US participated in the labor force in 2010 for a rough number of 72 million women [5]. If you look at those numbers and the fact that about 32.3 million women have children [6] in one way or another you get a good idea of how many women are not working simply because of their children. Some studies have shown that if women received more paid maternity leave then they would be more likely to return to their job [7]. There are even studies that show that woman’s salary dips for every child they have [8].

The bias is clear in merely the titles of the studies shown above, but discounting that it’s not unreasonable to figure at least the nature of those statistics are correct. Looking at those figures from an employer’s perspective, however, there is a lot of merit to what is being shown. If an employer is looking to promote someone or give a sizable rise, should the employer consider pregnancy into his or her decision making? Certainly it should be a factor either negative or positive. Overwhelmingly though it would be seen as a negative mark mostly because if the full FMLA allowance is taken there are 3 months of productivity missing from the woman’s work history. Managers and bosses want to see w a work history that is stellar in order to promote or give extra salary raises. When there is a 3 month gap in the work history of an employee that is indeed a mitigating factor. Many people decry this as sexism, but having children is a decision that has many repercussions. There is no such thing as a life choice without consequence and losing work time to have a child is one of them.

Looking at the other part of the study regarding the dip in women’s pay, they also make a point that father’s salary tends to go up with more children. This is also a logical conclusion that can be made. As a father myself when my daughter was born I was more motivated than ever to work harder and put in more hours so i can support my family. This in turn could lead to promotions and more money made simply by virtue of hours worked. The motivation for working harder is something that is often not taken into account when looking at earnings statistics. Add this to the 3 months of work history that a woman would not have if taking the full FMLA time off and you will see why men tend to earn more during fatherhood.

There have been proposed solutions such as paid maternity leave which in a free society would be determined by the company that is employing the woman. Yet, many business do not offer paid maternity leave. This is merely sound business practice. Why would and employer pay for someone to not work? Vacation time  and sick time is always an argument, but those are earned, not given away. People who work for companies earn their vacation time by working. Maternity leave could be charged to vacation time in order to avoid not getting paid for the duration of the leave, but an employer does not want to pay an employee for not working. This is frugality on the business’s part where the end goal is to make a profit.

Leaving the world of motherhood, let’s turn the attention now to the type of work that men and women participate in. Let’s take a look at the highest paying college degrees. The top 5 are Petroleum Engineering, Nuclear Engineering, Actuarial Mathematics, Chemical Engineering, and Electronics & Communications Engineering [9]. Many of those are engineering degrees, and yet only 22.2% of those students were women [10]. In contrast, the lowest paying degrees are Early Childhood education, Human Services, Studio Art, Social Work and Teacher Education [11]. These fields are generally dominated by women who pursue more of these lower paying degrees [12]. This pay difference between degrees is not due to gender, but rather supply and demand for these types of jobs. Education will always have people wanting to work, but there are a much smaller amount of people who are willing and capable to become nuclear engineers. The market demands higher wages and rate of pay for people who serve in much more specialized and less worked areas or else there would be no one to work them.

Men also tend to take jobs that are more hazardous. According to the Bureau of Labor Statistics, men made up a whopping 92% of workplace deaths [13]. Most of these jobs that involve on the job injury and accidents pay higher wages because of the higher chance of injury or death [14]. These jobs tend to be male dominated which is why they make the majority of workplace deaths.

Finally turning to the average age of retirement. In Canada, the average age of retirement for Males is 64, whereas for females it’s 62 [15]. That is nearly 2 years of more work for a man. In those 2 years he could still be receiving raises and bonuses contributing to his lifetime earned income, whilst a woman who retired at the average age would be simply living off of whatever savings and investments she made during her working years. This is not accounting for unpaid maternity leave or longer leaves of absence that the woman might have taken to care for said children.

In the end, there are a variety of factors that contribute to the difference in lifetime earnings between men and women. Many of these are due to conscious decisions by both men, women and employers. Many people want the government to step in and regulate such a thing, but that was already accomplished with the Equal Pay Act in 1963. Men and women are paid for the exact same work at the exact same rate when they have been working the exact same amount of time. There are too many factors and too many variable circumstances to definitively say that women make 77 cents to every dollar a man makes. Wages are only different based on a variety of factors and one of those is not genitalia.

 

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