Gender pay gap solution: Ban stay-at-home moms
By Andrew G. Biggs
We have just completed our annual national celebration of so-called “Equal Pay Day,” which purports to raise awareness of the “fact” that women are paid only 79 cents for each dollar earned by men. Equal Pay Day brings out progressives such as President Obama and Hillary Clinton repeating statistics which by now they must know are false and proposing solutions to the pay gap that almost certainly won’t change things and might even hurt women.
But I’m here to help. Our goal as policy analysts is to isolate the causes of gender pay inequality and to nip them in the bud.
Is the 21% “pay gap” a function of employers paying women 21% less for precisely the same work in precisely the same job? No. Even among full-time workers, men work longer hours than women.
And men and women also tend to work different jobs. Progressives often see occupational choice as discrimination in disguise, as if barbers were being paid 21% more than hairdressers. The reality is that there are good reasons why male-dominated jobs often pay more. For instance, male occupations are 10 times more likely to be subject to hazards, fumes, and extremes of weather; four times more likely to have excessive noise; and more than twice as likely to require physical strength. As my AEI colleague Mark Perry has pointed out, the 10 most dangerous occupations in terms of annual fatalities are overwhelmingly male. Even if you look only at male workers, dangerous or unpleasant jobs pay a compensating wage premium to make up for those downsides. The fact that such jobs are male-dominated explains about 4 percentage points of the average male-female pay difference.
But the biggest action is in two words: work experience. As pretty much everyone knows, an employees’ wages tend to rise with work experience. With experience, the employee becomes more productive. Again, this isn’t unique to male-female pay differences. If you analyze only men or only women, those with more work experience will tend to get paid more than those with less experience.
And if you look at survey data, the biggest differences between men and women isn’t in education or test scores or the skills required for their jobs. It’s in work experience. The National Longitudinal Survey of Youth follows individuals over their entire lives. Among individuals aged 43 to 51 in 2008, the typical man had two more years of work experience than the typical woman. On top of that, women’s past work experience consisted much more of part-time work and women were much more likely to report having left the workforce to care for a child or other family member. If it weren’t for differences in work experience, the male-female pay gap of 21% would shrink by more than 10 percentage points. (These and other figures I cite rely on “The Declining Importance of Race and Gender in the Labor Market,” authored by economics professors June and Dave O’Neill of Baruch College and published by the American Enterprise Institute.)
Okay, say, progressives, but aren’t differences in work experience just another form of discrimination? I don’t think so.
A 2007 Pew Research Center survey found that very few mothers with children are working less than they desire and many are working more than they’d like to. Pew found that of mothers who were employed full-time in 2007, only 29% viewed full-time work as their ideal situation. Forty-nine percent preferred to work part-time and 21% would prefer not to work at all. Likewise, only 5% of moms working part-time wished they could work full-time, while three times that number — 15% — wished not to be working. Finally, 48% of non-working moms viewed not working as their ideal choice; 33% wished to work part-time while only 16 wished to work full-time.
The point here simply is that most mothers who stay at home or work only part-time are doing what they wish to do and what they view as best for their kids. And given the choice between a child being raised by a parent or being raised at the local Lord of the Flies daycare center, they may be right.
Now, I can imagine one situation in which at least some of those mothers would change their minds about work: if progressives told them the truth about the gender wage gap. As it stands, some women who took time out of the labor force to raise kids may think that their lower wages on returning to work are due to gender discrimination, not to the fact that they took time out of the labor force to raise kids. Knowing the truth, some women may decide that staying on the job to gain experience and seniority outweighs the advantages of being at home with their children. I suspect it won’t be a lot, though, because most actual women are smarter than the rhetoric they hear from progressive groups and political candidates. Most women understand that there are tradeoffs to staying home with their kids, one of which is that being out of the workforce inevitably holds back your career. Most appear to have made the choice they are most comfortable with.
What progressives don’t want to acknowledge that it is family’s choices that drive male-female differences in work experience. Worse, progressives really don’t want to acknowledge that these choices may be correct. We can argue over whether women’s “mothering instinct” is natural or a social construct. But I’d wager real money that in most families both spouses, husband and wife, would agree that the mother is likely to be a better caregiver to their children than the father.
And given that salaries rise with experience, it may make financial sense for one spouse to specialize in raising the children while the other focuses on advancing in paid employment. Each spouse working half a career probably won’t produce the same total income for the family than one spouse working a full career. Are there exceptions? Sure. But on average, a working husband and a wife who cares for the kids may be best for both the family’s finances and the children’s upbringing.
Nevertheless, progressives have isolated a problem they see as pressing and every pressing problem demands a governmental solution.
So here it is: forbid women from staying at home with their children. Make staying at home with kids illegal, just like child labor is illegal. Doing so would equalize work experience between men and women and, more than any other policy, shrink the gender pay gap that so threatens the American dream. “Gender pay discrimination” could be cut in half simply by forbidding women from staying at home to care for their children.
Luckily, most progressive won’t go quite that far, though stories like this make me wonder about some of them.
But progressives also aren’t averse to using federal resources to tilt the scale in favor of kids going to childcare rather than being raised by their parents. Progressives like the Center for American Progress favor tax credits of up to $13,340 for families to place young children in child care. My objection isn’t to child care tax credits as such. For many families, especially single-parent households, child-care is essential. My problem is with assisting families only by helping put their kids in child care while not helping a parent who might wish to stay home with the kids. Under the CAP proposal, a parent who chose to stay home with their child — which might be the best thing for both the child and the family’s finances — would be leaving a lot of government money on the table. It’s as if progressives are okay with children being raised collectively but somehow creeped out by actual families.
A solution that would benefit all families, regardless of their preferences, is an expanded child tax credit. Some families could use the credit to fund child care, allowing both spouses to work. Others might use the credit to make it more affordable for one parent to stay home with the kids. A tax reform proposal from Sen. Marco Rubio (R-FL) and Mike Lee (R-UT) would expand the current child tax credit from $1,000 to $2,500. A child tax credit helps families do what they, not the government, think is best for them and their kids.
Work experience, more than anything else, drives pay differences between men and women. Progressives should be forthright enough to admit that. If we really want to equalize pay between men and women we need to equalize their work experience. But in many cases, the only way to do that is by overriding mothers’ preferences regarding what is best for their kids. If we’re not willing to do that, we’re going to have to live with a gender pay gap. If so, though, progressives should live with it honestly. So far, though, I don’t see much hope of that.
First published in Forbes: http://www.forbes.com/sites/andrewbiggs/2016/04/13/gender-pay-gap-solution-ban-stay-at-home-moms/#46d4ee3f47fd
