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By Stephen Pederson

Gender Wage Gap: All the Facts

Is the Gender Wage Gap a Myth?

A professional woman working.

Does the Gender Wage Gap Exist?

There is a common refrain raised by “feminists” in America when it comes to fairness in the workplace: the gender wage gap is proof that women are discriminated against.  They point to the studies not unlike one issued by the American Association of University Women (AAUW) and reported by the Huffington Post, that shows a 23 cent per dollar wage gap in the work place for women compared to the earnings of men.  And indeed if look at the raw numbers there is an average wage gap of approximately 23% in what men and women earn.  If that were all the relevant facts here, that would be the end of the story – wage discrimination would exist.  But that is not the fully story as there are more facts to review in the gender wage gap discussion.

No one is debating that there is a wage gap between what the average earnings for men and woman are.  There is a gap.  However, historically speaking even this raw data average earnings/wage gap that is referenced by many in the media has been narrowing.  As can been seen in table 1, since 1970 the average earnings numbers between what men and woman earn has decreased by 43% in the last 37 years.

Table 1: Decrease in raw earnings gap since 1970 – Men vs. Women

Year
Avg. Base Earnings Men
Avg. Base Earnings Women
% of Decrease in Gap
1970100%62.1%base year
2007100%78.5%43.3% of gap

Even though the gap has narrowed significantly, there is still a large gap, but the story does not end here.

In a landmark study by the US Department of Labor in 2009 (An Analysis of the Reasons for the Disparity in Wages Between Men and Women), it was statistically proven that the the gender wage gap could be largely explained by individual career choices that had an impact on the earnings of women. According to this US Federal Government study, between 65.1% and 76.4% of the difference in the raw average wage cap number between what men and woman earn was explainable due to individual career related decisions.  The impact of the explainable portion of the gender wage gap leaves only an unexplainable earnings gap to a small range of 4.8% to 7.1%.

In other words, the US Department of Labor has put forward that the gender wage gap may be only as small as 4.8% to 7.1%.

The US Department study concluded that statistical data shows that the significant percentage (65.1% to 76.4%) of the reported raw number gender wage gap was was caused by the following career impacting decisions by the individual:

  • Lower paying part time work in place of full time work – women chose this more often
  • Long periods of absence from the work force – women chose this more often
  • Choices of occupation and industry to work in – large numbers of men and women choose different occupations and industries to work in, with differentials in earnings

The study states that with additional research work it may be proven that the remaining 4.8% to 7.1% unexplained gender wage gap may be explained by additional factors that were not examined by the US Department of Labor report.  Additionally, these factors may lead to the conclusion that the gender wage gap is entirely explained by individual career choices and not gender discrimination.

An excerpt from the foreward in the US Department of Labor study by the Deputy Assistant Secretary for Federal Contract Compliance, Charles E. James, Sr.:

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.

 

Links:

US Department of Labor report: An Analysis of the Reasons for the Disparity in Wages Between Men and Women

American Association of University Woman (AAUA): www.aaua.org

 

Photo: courtesy of www.Morguefile.com

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