Does A Wage Gap Exist?

Source: Wikimedia Commons

“77 Cents For Every Dollar” has been a rallying cry for American Democrats since Barack Obama included it in his 2013 State Of The Union Address. Indeed, claims that gender discrimination affects pay are very serious, they certainly would prove the existence of an American “patriarchy” that oppresses American women from the shadows.

Except they don’t.

The 77 cents on the dollar number is calculated by dividing the median earnings of a male full-time, year-round worker, by the median earnings of a female full-time, year-round worker. [1] The issue with this calculation is that it ignores the choices that men and women make about degree choice, work-life balance, comfort with risk of workplace injury, etc. That specific figure also leaves out median years of experience, which is heavily tilted in favor of men, given how many women retire to bear and raise children. [2]

Many people understand this. While the 77 cents phrase is a firebrand political slogan, American politicians now often refer to “unequal pay”. Women being paid less than men for doing the same job.

Unfortunately, claims that a 20% gap exists within the same job are completely unsupported by data. The largest “equal pay for equal work gap” found (in a study by a feminist organization) was about 7%. [3] (One year after college graduation, to control for how experience is considered).

Why though, is there any gap at all? The truth is, nobody knows. The number of factors which determine compensation is immeasurable. There is a wealth of evidence which suggests that employers are willing to compensate employees who care more about their careers and less about work-life balance. When “ranking” Men, both genders place far more importance on career success for Men than they do for Women. [4] Such a discrepancy could indicate that Men may make certain intangible decisions which result in a small, not discriminatorily motivated or problematic, wage gap.

[1] NOTE: (2018, so it shows 88%, not 77%)