On Tuesday, April 4, I strolled into my favored coffee shop and was promptly offered a 20% discount on my hot beverage of choice. It was Equal Pay Day, and the 20% discount related to the “20% pay gender gap” in the U.S. between men and women. Fair is fair, and I only got the 20% discount on my coffee if I could confirm that I had actively fought to reduce the gender pay gap in some manner. That seemed like a bold claim for me to make, so I politely turned down the offer and paid full-price (and yes, it was about as awkward as any conversation I have had while placing a coffee order ).
Ever wondered what the 20% gender pay gap really means? It is based on the difference in the median earnings for men and women employed in full-time jobs in the U.S. Its a very aggregate statistic that hides more than it shows.
- It does not adjust for hours worked (as long as the worker meets the 35-hours-a-week threshold for full-time employment, he or she is counted in the statistic). And men work longer hours than women.
- It does not account for education, skill and importantly, employment sector (e.g., trucking, nursing, teaching, engineering, etc). Women work disproportionately in lower-paying sectors.
- There are important differences across race – for instance, the earnings disparity between a Hispanic or African-American woman and non-Hispanic white men is higher than the 20% gap overall.
- The pay gap for older women is larger.
- Women experience pay gaps at every education level and in nearly every line of work, but the magnitude of the pay gap varies across education level and occupation.
A number can be catchy, and thus, the “20% gender pay gap” has taken on a life of its own. Some women’s rights activists conflate closing the 20% gender pay gap with “equal pay for equal work” (suggesting that all of the 20% gender gap is due to outright pay-related discrimination against women). Conservative pundits, in turn, claim that men earn more because they work more and in higher-paying jobs and that women want to be in the lower-paying jobs they dominate, and conclude that there is nothing to see here. What’s everyone getting so worked up about? It’s just the free market working in its magnanimous ways. Pop media peddles dramatic but inaccurate headlines such as “7 Wage Gap Myths That Need To Be Busted Once And For All” (e.g., it is not a myth that “women earn less because childrearing & pregnancy detract from women’s work,” and there is evidence to suggest that women may be penalized for aggressively negotiating their salaries). And even Obama earned some flak for getting this wrong.
This focus on a single number often distracts from the real issues. The question, of course, is whether discrimination occurs. Outright discrimination – i.e., denying women and minorities equal pay for equal work because of their gender or race (or both) – does occur in the U.S. We need to look no further back than just this last week, when news broke of a Department of Labor lawsuit against Google seeking to compel Google to hand over salary data after allegedly finding evidence of “systemic compensation disparities against women pretty much across the entire workforce.” Even conservatives agree that such discrimination probably occurs to some degree, although they spend most of their time trying to whittle down the number to something respectable. And unsurprisingly, economists have studied this issue extensively, and have found some “unexplained gap” in women and men’s income remains even after they account for measurable differences in hours worked, occupational choice and other relevant factors (it’s obviously smaller than 20%).
But discrimination – and disparity – can take many forms. Many types of discrimination show up somewhere in that 20% gender pay gap figure, but not necessarily as outright discrimination in salaries or financial compensation: when women are discouraged to take up science, math and engineering and men opt out of traditionally “female” jobs; when societal pressure places women with household or childcare responsibilities into lower-paying jobs; when workplace harassment or an unfriendly work environment forces women out of certain (often, high-paying) jobs; when women are denied adequate paid maternity leave and men are mocked or penalized for taking parental leave when it is offered to them; when affordable childcare is not available and women take on the disproportionate burden of childcare; when economic hardship and racial or gender stereotyping prevent women from getting the education and opportunities they would otherwise have; when women work in settings that are old boys’ networks, and do not get the professional opportunities or promotions they deserve. And so on. The fact that many women are not performing “equal” work (i.e., in terms of hours or rough job description) is as much a part of the problem. And its wishful thinking to call this a “choice.”
Laws help to some degree, and both federal and state laws exist to prevent discrimination based on gender. But because discrimination can be subtle and hard to prove, the laws themselves are sometimes necessarily fuzzy. For instance, in California, employers must cite a “bona fide factor other than gender” to explain pay differentials between men and women (e.g., education, training, experience, some acceptable measure of work product). In Maryland, employers cannot “mommy track” employees or withhold information about promotions. In Massachusetts, employers cannot ask potential employees about their salary history. In Minnesota, public-sector employers are required to review wages in female-dominated and male-dominated jobs and eliminate disparities between the two in instances where they require similar levels of expertise. Over the last few decades, Minnesota has reportedly nearly eliminated the pay gap in public-sector jobs of comparable value.
The “20% gender pay gap” definitely tells you that a lot needs fixing. But the gender pay gap represents discrimination that is fairly entrenched, sprawling and deep-rooted, and will not be easily overturned by quick-fix laws, slogans or executive orders.
My goal? To figure out how to earn myself the discounted cup of coffee next year. Hopefully it will be less than 20 percent.