Why women earn less than men
This year, Equal Pay Day fell on April 12, meaning that women had to work nearly three and a half additional months into 2011 to earn what men earned in 2010. If these extra 102 days of work are extended over 40 years — about how long people will work between schooling and retirement — women need to work more than 11 additional years to earn as much as men. Mariko Chang writes.world Updated: Apr 17, 2011 01:32 IST
This year, Equal Pay Day fell on April 12, meaning that women had to work nearly three and a half additional months into 2011 to earn what men earned in 2010. If these extra 102 days of work are extended over 40 years — about how long people will work between schooling and retirement — women need to work more than 11 additional years to earn as much as men.
Since the establishment of Equal Pay Day 15 years ago, the gap has barely budged, with women making between 74% and 77% of what the guys earn. To understand this injustice, let’s first dispense with some of the misconceptions about why guys get bigger paychecks.
1. Women earn less because they enter low-paying fields
While it’s true that men tend to enter higher-paying fields than women, that difference alone does not explain the gender wage gap. Even when they work in the same occupations, men earn more. For instance, the median weekly salary for full-time male pharmacists was $1,954 in 2009, compared to $1,475 for female pharmacists, according to the Institute for Women’s Policy Research.
And men even earn more than women in traditionally female-dominated occupations. For example, full-time female registered nurses earned an average of $1,035 per week, whereas men earned $1,090 — or an extra $2,860 per year.
If different occupations don’t explain the pay gap, might it be caused by women’s decisions to work less outside the home in order to care for their children? Researchers have found that even when differences in work experience, education, age, and occupation are held constant, women continue to earn less.
In fact, research by Columbia University social work professor Jane Waldfogel reveals that mothers r eceive a 4% wage penalty for the first child and a 12% penalty for each additional child. In contrast, University of Washington economists Shelly Lundberg and Elaina Rose find that men’s wages increase 9% with the birth of their first child. One possible explanation sociologists offer is that, upon parenthood, men are perceived as more committed and women less.
2. The wage gap is not an issue for today’s young women
Young women today have opportunities their mothers and grandmothers never had and they are seizing them — women are now more likely than men to attend and to graduate from college, while Census data analysed by the New York-based Reach Advisors suggests that childless, never-married women in their 20s out-earn their male peers in some major metropolitan areas.
However, one of the reasons young women have higher earnings than before is that women are now more likely to graduate from college, and people with college degrees generally earn more than those without. Among full-time workers with college degrees, men still out-earn women.
Moreover, pay doesn’t differ as much for younger workers since they are typically in entry-level and low-paid positions. As time passes, however, the pay gap between men and women widens.
3. “He-cession” reduced the pay gap between men and women
Men were hit first by the recession, as the construction industry received the first blow. But as the downturn continued to unfold, the service sector (which employs 20% of all female workers and 13% of male workers) was hit hard. In addition, as states made drastic cuts to their budgets, jobs in education and public services — which employ more women than men — have also faced drastic cuts.
Women also did not fare well during the mortgage meltdown because they were more likely than men to be targeted by predatory lenders and consequently to have subprime loans. The Consumer Federation of America found that at every income level, women were more likely to receive subprime loans than men. Women of colour were especially disadvantaged.
While male unemployment rates were high throughout the recession, the unemployment rate for single women supporting families was even higher. In March 2011 the male unemployment rate was 9.3% whereas single mothers had an unemployment rate of 12.3%.
4. Only sexist employers discriminate against women
Pay discrimination is not necessarily the result of sexist beliefs. In fact, discrimination is often carried out by well-meaning people who are not even aware of it. All of us are affected by unconscious biases that affect how we evaluate men and women’s expertise and skills.
In a famous study of symphony auditions, economists Claudia Goldin and Cecilia Rouse found that women musicians were more likely to be hired or promoted when they auditioned behind a screen so that judges could not know whether they were a man or woman.
Were those evaluating musical talent sexist? More likely they were simply succumbing to unconscious biases. Since then, numerous studies have shown that even with identical resumes and qualifications, men are viewed more favourably than women.
5. Closing the wage gap will create economic equality
Wealth — the value of your assets minus your debts — is a much more comprehensive and accurate way to measure a person’s economic well-being than income. Regardless of how high one’s income is, without wealth people are a paycheck away from economic disaster.
Perhaps not surprisingly, single women have less than half of the wealth of single men. Even if men and women had the same incomes, women would have less wealth for two reasons.
First, women are more likely to be single parents and have to support more people on one income, leaving less left over to save and invest. Second, women are still less likely than men to work in jobs that come with fringe benefits, such as employer-sponsored retirement plans, subsidised health insurance and paid sick days, that either put wealth in people’s hands directly (such as matched retirement contributions) or provide things that people would otherwise have to pay for themselves.
Women also receive lower Social Security benefits when they retire because of their lower lifetime earnings and because any years they did not work in order to care for children or ill family members are averaged in as years with zero earnings, greatly reducing their average earnings from which retirement benefits are calculated. It’s not how much you make, but how much you keep that matters.
(Mariko Chang is the author of Shortchanged: Why Women Have Less Wealth and What Can Be Done About It.)
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