WHAT ARE THE ACTUAL REASONS FOR THE GENDER PAY DIFFERENCE
Before a problem can be solved, we must identify the individual causes. The problem is strictly a “symptom” (effect) of the causes. Generalizing and failing to consider the facts and failing to use objective reasoning are the main causes of coming up with “non-solutions” and most likely creating more problems.
People complain about the gender pay gap being at 77% for women compared to men - and they are saying that the pay difference was strictly from prejudice against women and/or unfairness. But they are lumping several factors together to make an erroneous conclusion and an invalid meaning. (And then many people will get upset about the factual disputations, instead of just looking at them and accepting the validity.)
One study, said that if you adjusted for education and experience the new number would be 81%. And if you adjusted for occupation, industry, and whether a person belongs to a union, the number goes to 91%.
Nobody is able to, except by assuming inferred causes, explain the gap entirely, so discrimination and unfairness seem to plug the hole - but not necessarily validly. The gap appears to be mostly caused by the choices women make.
THE FACTORS AFFECTING GENDER PAY DIFFERENCES
1. Less likely to work a full-time schedule (“gender-hours gap”)
a. Productivity is higher when people work more hours
2. More likely to leave the labor force for longer periods of time than men, further suppressing women's wages. (American Association Of University Women, of college graduates: 23% of those who had become mothers were out of the workforce in 2003; another 17% were working part-time).
3. Working women suffer for their dual roles as wage earners and as those who disproportionately care for home and family (esp. children).
a. Note this additional statistic: Women with children earn about 2.5% less than women without children.
4. Women have fewer years of work experience.
5. Less assertive and aggressive in seeking raises, promotions, and feeling worth.
Based on the above factors and the distinctions in studies below, the differences in pay appear to be caused by the choices that women make (as influenced by the culture and circumstances, but still by their choice).
No one can adequately quantify all the data and thus not all the causes, but overall there appears to be little or no basis for intentional discrimination and only some inferred basis for unconscious prejudice (which women themselves have about themselves).
Arbitrarily applying standards that are not provable or quantifiable leaves employers and the cost of unjustified litigation up to factors that are neither controllable nor determinable - in most cases. The courts would have to account for this factor, discounting somewhat any discrepancies, but it would have a difficult job doing so.
The legislation now before Congress appears to open up more wormholes and possible damage than any possible benefits. Current legislation should be more than adequate.
Of course, any real discrimination, which appears to be very rare, per the US government and studies, should be dealt with appropriately.
But, again, the gender gap pay difference (per hour, per equal job, per equal contribution) is largely a myth. They are paid according to 1) the best estimate of the job they will do, 2) their hours, and 3) their actual contribution, given the factors that get in the way of their contributing more - and those factors are by their choice, given their values and the rules they set for themselves. There is no appropriate outrage.
FURTHER DISCUSSION, STUDIES, ETC.
To get more insight and/or to further back up the statistics and conclusions, some may wish to read further.
THE GENDER-HOURS GAP
The gender-hours gap is the close cousin of the gender-wage gap. American women earn only 77 cents for every dollar earned by men. Yet these numbers don't take into account the actual number of hours worked. And it turns out that women work fewer hours than men. (Those who work longer hours also are more productive per hour, regardless of gender.)
The Labor Department defines full-time as 35 hours a week or more, and the "or more" is far more likely to refer to male workers than to female ones. According to the department, almost 55% of workers logging more than 35 hours a week are men. In 2007, 25% of men working full-time jobs had workweeks of 41 or more hours, compared with 14% of female full-time workers. In other words, the famous gender-wage gap is to a considerable degree a gender-hours gap - chosen by women and not due to discrimination (as far as is possibly verifiable).
The main reason that women spend less time at work than men—and that women are unlikely to be the richer sex—is obvious: children. Today, childless 20-something women do earn more than their male peers. But most are likely to cut back their hours after they have kids, giving men the hours, and income, advantage.
One study by the American Association for University Women looked at women who graduated from college in 1992-93 and found that 23% of those who had become mothers were out of the workforce in 2003; another 17% were working part-time. Fewer than 2% of fathers fell into those categories. Another study, of M.B.A. graduates from Chicago's Booth School, discovered that only half of women with children were working full-time 10 years after graduation, compared with 95% of men.
Good idea to read the whole article: WSJ
EQUAL PAY ACT PASSED 40 YEARS AGO
Equal Pay Act (EPA) prohibits unequal pay for equal work, but allows employers to explain differences in pay. If those disparities are the result of any factor other than sex, the employer wins. Employers that can offer reasonable explanations don’t have much to worry about. Those that can’t may face liability.
It would be preposterous, indeed, if the government were to mandate equal salaries and total pay for each gender, when the hours are different - imagine the fairness of that! (Socialism is based on equal money for all regardless of their contribution - which has always failed and created great economic problems!)
STUDIES OF DATA
For most careers the company studied, PayScale found that the pay gap is largely the result of outside factors. Within a specific job, before controlling for outside factors the typical female worker earns pay that is 90 percent of the typical male worker’s pay; after controlling for these variables, she earns 94 percent of the typical male worker’s pay. For jobs paying below $100,000, the gap narrows further. (Other factors can affect the difference but they weren't quantifiable, such as "assertiveness" or "feeling worthy" as they affect pay.)
The implication is that in most jobs where a wage gap exists, it is probably not due to overt discrimination, with bosses deciding, Mad-Men-style, that women should receive unequal pay for equal work. Rather, in most jobs, the different career choices that men and women make — or perhaps the different career opportunities men and women have available to them — account for big differences in pay, says Al Lee, PayScale’s director of quantitative analysis.
Compare those jobs to positions like engineers, actuaries or electricians, where the criteria for a job well done might be relatively more concrete or measurable — and where the salaries earned by men and women are roughly equal.
Congressional Budget Office
Economist June O'Neill, former director of the Congressional Budget Office, found an unexplained pay gap of 8% after controlling for experience, education, and number of years on the job. Furthermore, O'Neil found that among young people who have never had a child, women's earnings approach 98 percent of men's.
CONSAD Research Corporation
In a stance rejecting discrimination, a 2009 study by the CONSAD Research Corporation concluded, "it is not possible now, and doubtless will never be possible, to determine reliably whether any portion of the observed gender wage gap is not attributable to factors that compensate women and men differently on socially acceptable bases, and hence can confidently be attributed to overt discrimination against women."
The conclusion was based largely on a study by Eric Solberg & Teresa Laughlin (1995), who find that "occupational selection is the primary determinant of the gender wage gap" (as opposed to discrimination) because “any measure of earnings that excludes fringe benefits may produce misleading results as to the existence magnitude, consequence, and source of market discrimination.” They found that the average wage rate of females was only 87.4% of the average wage rate of males; whereas, when earnings were measured by their index of total compensation (including fringe benefits), the average value of the index for females was 96.4% of the average value for males.
In the book Biology at Work: Rethinking Sexual Equality, Browne writes: "Because of the sex differences in hours worked, the hourly earnings gap [...] is a better indicator of the sexual disparity in earnings than the annual figure. Even the hourly earnings ratio does not completely capture the effects of sex differences in hours, however, because employees who work more hours also tend to earn more per hour."
Gary Becker argues that the traditional division of labor in the family disadvantages women in the labor market as women devote substantially more time and effort to housework and have less time and effort available for performing market work. The OECD (2002) found that women work fewer hours because in the present circumstances the "responsibilities for child-rearing and other unpaid household work are still unequally shared among partners." Marriage in and of itself, not maternity leave, in general will leave females with more household labor than the males
The report Beyond Bias and Barriers says that extensive previous research showed a pattern of unconscious but pervasive bias, "arbitrary and subjective" evaluation processes and a work environment in which "anyone lacking the work and family support traditionally provided by a ‘wife’ is at a serious disadvantage. (This means women are invaluable supporters of their spouses, but not likely the other way around!)
ASSSERTIVENESS AGGRESSIVENESS EFFECTS
Another factor: the difference in men's and women's assertiveness about asking for more money and/or valuing their own work. Perceptions of wage entitlement differ between women and men such that men are more likely to feel worthy of higher pay. while women's sense of wage entitlement is depressed. Women's beliefs about their relatively lower worth and their depressed wage entitlement reflects their lower social status such that when women's status is raised, their wage entitlement raises as well
Men tend to initiate negotiations more than women.
A study of the job negotiations of graduating professional school students found that male students were eight times more likely to negotiate starting salaries and pay than female students.
Over the course of a career, the accumulation of such differences may be substantial, according to the researchers.
UNEQUAL CONTRIBUTIONS TO CHILD RAISING
Thomas Sowell argued in his 1984 book Civil Rights that most of pay gap is based on marital status, not a “glass ceiling” discrimination. Earnings for men and women of the same basic description (education, jobs, hours worked, marital status) were essentially equal. That result would not be predicted under explanatory theories of “sexism”. However, it can be seen as a symptom of the unequal contributions made by each partner to child raising
LILLY LEDBETTER FAIR PAY ACT OF 2009
In 2009, President Barack Obama signed the Lily Ledbetter Fair Pay Act. This law extended the statute of limitations on cases where a worker found that they were receiving discriminatory pay, allowing them to sue and receive recompense more than six months after they received the pay. This was seen as a victory for those fighting against the gender wage gap, because if a woman at the end of her career found that she had been making less money than men who were doing the same work, she now had more than six months from the date of her last pay check to file a claim and possibly receive the wages that were denied.
TYPES OF JOBS
According to the study, 52 percent of Minnesota’s working women are in service, sales and office jobs. In those fields, the median earnings for a full-time woman range from $24,697 to $33,744. That compares to 30 percent of working men in those fields.
Research has found that men tend to work in more dirty, dangerous and financially risky jobs and those come with higher rewards.
RANDOM “IMPRESSIONS” AFFECT PAY
CEOs who are taller receive more pay than shorter ones.
WHAT THE WAGE-GAP ACTUALLY REFLECTS
But all the wage-gap ratio reflects is a comparison of the median earnings of all working women and men who log at least 35 hours a week on the job, any job. That's it.
It doesn't compare those with equal work, equal training, equal education or equal tenure. Nor does it take into account the hours of overtime worked.
The wage gap, in short, "is a good measure of inequality, not necessarily a measure of discrimination," said Heidi Hartmann, president of the Institute for Women's Policy Research.
Unequal doesn't always mean unfair. Much depends on the reasons for disparity. And, Hartmann notes, "parsing out (the reasons for the gap) is difficult to do."
Factors may include: more women choose lower-paying professions than men; they move in and out of the workforce more frequently; and they work fewer paid hours on average.
Why that's the case may have to do in part with the fact that women are still society's primary caregivers, that some higher-paying professions require either too much time away from home or are still less hospitable to women than they should be.
DUE TO DISCRIMINATION?
Lower wages for women could be due to discrimination. Employers may be less willing to promote women; they may even pay lower wages for the same job. But..
Taking a break from work means women are less likely to get promoted.
Also, women of childbearing age, may be viewed as a liability. This is because if they become pregnant the firm has to pay maternity leave, and find somebody to fill the temporary gap. For small firms, this can be a significant cost. This reason is quite significant, although, many women are choosing to have children later in life - if at all.
Women more likely to have part time / temporary jobs. in the service sector, these jobs are lower paid because firms often have monopoly power. Women also have lower travel time. In order to look after children, they need jobs closer to the home; this limits the range of jobs available.
Harvard economist Claudia Goldin replied "There are certainly instances of discrimination, she says, but most of the gap is the result of different choices. Other hard-to-measure factors, Goldin thinks, largely account for the remaining gap -- "probably not all, but most of it."
THE EQUAL PAY FAIRNESS ACT, 2012
The bill being considered would make it easier for those who are the targets of wage discrimination to address the issue, allowing employees to disclose salary information with co-workers despite workplace rules prohibiting disclosure. Employers would be required to show that any wage discrepancies are based on genuine business requirements and are related to specific characteristics of the position that are not based on gender. The bill would also prohibit retaliation by companies against individuals who raise wage-parity issues, provide resources to help women develop their negotiating skills and would include further research to understand the lingering causes of wage discrepancies between men and women.
The bill would open the door to more lawsuits against employers. And the inability to clearly identify and isolate and quantify all the factors would leave the cases up to prejudices, positions, and interpretations that the jurors and/or judges would not be equipped to make - nor able to make!
“On the heels of last week's dismal jobs report, the last thing we should be doing is putting more job-killing burdens on small businesses and employers.”
A 2007 Consad Research Corporation study prepared for the Department of Labor cautioned against misinterpretation of census and other wage data, suggesting that the wage gap between the sexes was not due to systematic discrimination:
“Although additional research in this area is clearly needed, this study leads to the unambiguous conclusion that the differences in the compensation of men and women are the result of a multitude of factors and that the raw wage gap should not be used as the basis to justify corrective action. Indeed, there may be nothing to correct. The differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers.”
Similarly, Christina Hoff Sommers, a resident scholar at the American Enterprise Institute, criticized the proposed law, citing the study by the United States Department of Labor that showed that differences in pay between men and women are largely due to "the result of the individual choices being made by both male and female workers" in which women take jobs that are more family-friendly in terms of benefits rather than wages and that women are more likely to take breaks in employment to care for children or parents.
Columnist Daniel Fisher criticized the legislation in Forbes magazine, saying that the elimination of the "reason other than sex" defense that could be used by employers under existing law would mean that wage differences based on an individual's salary history and negotiating skills would be treated as being evidence of discrimination, despite the fact that the employer's actions were not based on gender
Under the Equal Pay Act, the law that makes it illegal for employers to pay unequal wages to men and women who perform substantially equal work, an individual subject to wage discrimination must establish that “(1) the employer pays different wages to employees of the opposite sex; (2) the employees perform equal work on jobs requiring equal skill, effort and responsibility; and (3) the jobs are performed under similar working conditions.” Even if the individual makes each of these showings, the defendant employer may avoid liability by proving that the wage disparity is justified by one of four affirmative defenses—that is, that the employer has set the challenged wages pursuant to “(1) a seniority system; (2) a merit system; (3) a system which measures earnings by quantity or quality of production; or (4) a differential based on any other factor other than sex.”
We simply cannot quantify this many of the factors affecting women’s choices and performance.
Before an employer need even offer an affirmative defense in an Equal Pay Act case, a plaintiff must make a prima facie showing of wage discrimination. The plaintiff’s burden is substantial, as she must identify a comparable male employee who makes more money for performing equal work, requiring equal skill, effort, and responsibility under similar working conditions. If a plaintiff fails to make this showing, the case ends, and the employer need not offer any defense at all.