Gender Pay Gap: A Moral Issue, or Moral Panic?

If you search “gender pay gap” on Google news you’ll come across a series of headlines like these:

You’ll find many news articles revealing a worsening pay gap in certain industries, or for certain minority groups; How some women must work much harder to get the same pay as white men, losing up to $1 million over their career; how gender discrimination is empirically shown to be at the root of these injustices. If you’re any normal person, it will make your stomach churn.

Yet, if you punch the same words, “gender pay gap,” into Google’s regular search engine, you’ll get a much more varied set of results, including some calling the gender pay gap a myth.

Like most people, I’ve heard it both ways. In schools, on posters, in politician’s speeches, on Equal Pay Day in April, I’m reminded of the $0.79 women earn on the dollar. But then on some podcast or op-ed, I hear an argument that the data is being misconstrued, or, that the pay gap is largely a result of job choice, not discrimination.

This inspired me to do some sleuthing of my own; take a look at the dozen or so commonly-cited gender pay studies, and figure out for myself: Is the gender pay gap real, or is it a myth inciting some kind of moral panic?

Here’s What’s True About The Gender Pay Gap

To start, here’s what pretty much everyone agrees on:

• If you calculate the median salary of all men vs the median salary of all women in the United States, women earn 79 cents on the male dollar. (Payscale) This is 100% true.
• The gap is even more pronounced for black and Latina women who earn 74 cents on the dollar.
• This statistic does not take into account the different professions men and women tend to enter; with men clustered in industries like construction, utilities and transportation, and women clustered in healthcare and education. These female-dominated industries tend to pay less.
• When the same jobs are compared, along with the same level of experience and location, the wage gap shrinks to 98 cents on the dollar.

So we can basically break the gender wage gap down to 2 questions: The first being, why are women over-represented in certain industries that tend to be lower-paying, and secondly, when the job is the exact same, why are women still being paid about 2% less?

Why Women Are Over-represented In Lower-Paying Jobs

Industries that have the lowest percentage of women, according to the Bureau of Labor Statistics, are Construction (9.9%), Mining (13.8%), Utilities (21.4%), and Transportation and Warehousing (24.9%). With the exception of transportation and warehousing, all of these pay above the national average, with utilities and mining being the two highest paid industries.

Industries that have the highest percentage of women are Education and Health Services (74.4%), Financial Activities (52.6%), Leisure and Hospitality (51.5%), and a category called Other Services (53.6%), which includes jobs like beauty salons, and household workers. With the exception of financial activities, all of these pay below the national average, with leisure and hospitality being the lowest paid industry overall.

So why the difference? The most obvious explanation is that construction, mining, utilities and transportation are all more dangerous, and more likely to involve traveling, irregular scheduling, and adverse weather conditions. This helps explain the higher pay. Also, because these jobs are more physically demanding, they are generally more appealing to men than women.

However, not every job in these industries involve physical labor; there’s engineers, programmers, middle managers, and other skilled workers behind the scenes. These positions, in theory, should be equally available to women. So why is there still such a significant imbalance?

Discrimination vs Choice

This is where the debate gets more contentious. Many on the left argue that these industries have been dominated by men for decades and fail to be hospitable to women. Whether it’s outright discrimination, or simply a culture that celebrates ‘locker room talk,’ women are unable to break in. There is some data to back this up: The Mining and Utilities industries account for roughly 1% of sexual harassment charges filed by women, despite making up only 0.54% of the female workforce. In other words, the rate of sexual harassment is almost 2x higher than the national average.

On the right, many argue that women are drawn to certain industries as a matter of choice, due, in part, to biological and social factors. Women are drawn to education and healthcare, for example, because they disproportionately prefer working with people, as opposed to working in numbers-driven science, technology, engineering and math (STEM) fields.

This is also consistent with the data when one looks at women in STEM internationally. Paradoxically, countries with more gender equality and occupational freedom tend to see fewer women in STEM fields. Meanwhile, countries with lower gender equality scores, like Algeria, Tunisia, Turkey and the United Arab Emirates all have much higher percentages of women in STEM.

Source: Psychological Science; Stoet & Geary (2018)

This seems to imply that the more freedom women have to pursue the occupation of their choice, the less likely they are to work in STEM professions.

So Who Is Correct?

Obviously both choice and discrimination play a role, but it’s extremely hard to determine how much each is to blame. The data on sexual harassment, for instance, doesn’t give us a complete enough picture, since only about 1 in 3000 women filed such charges with the EEOC against mining and utility companies last year. While under reporting is very likely to be present, this data set alone still isn’t enough to tell us that sexual harassment is the main culprit.

It’s also hard to determine exactly where one ends and the other begins. For instance, with a job like natural gas extraction, employees will spend 2 weeks at a time on site, sleeping in barracks, working in extreme temperatures, and spending just about all waking hours with their fellow crew. It’s understandable how most women (and men, for that matter) would both choose to avoid a job like this, and would not find it to be the most hospitable working environment. It’s not self-evident that better policing of ‘locker room talk’ would significantly increase female participation.

Why Women Get Paid Less For The Same Job

While differing occupations explains the bulk of the gender wage gap, there is still a small amount remaining when we control for these factors. According to Payscale, even with the same job title, years of experience and location, women tend to earn only $0.98 for every $1 a man makes.

While this number is a lot less than the $0.79 gap we started with, it does vary across industry (Installation, Maintenance & Repair has the highest gap at $0.94), and there is a slight racial component, with black women earning $0.97 compared to $0.98 for women overall.

Scheduling Flexibility & Motherhood

While many different theories have been proposed over the years, such as managerial bias in promotions and raises, or that men are better negotiators, researchers have discovered that the wage gap persists even when these factors are controlled for.

In a study of Massachusetts Bay Transport Authority (MBTA) bus and train drivers, researchers found that women earned $0.89 on the dollar, despite the fact that wages increased at a predetermined rate, and promotions were based solely on seniority. Thus, neither bias, nor negotiating prowess could explain the gap. Instead, researchers found the reason to be scheduling: Men were far more likely to work overtime, particularly when it was needed on short notice, and women were far more likely to take unpaid time off via the Family and Medical Emergency Leave Act (FMLA).

This explanation has been endorsed by many people across the political spectrum. In a New York Times article from 2017 titled The Gender Pay Gap Is Largely Because of Motherhood, the author explains how the gender pay gap increases with age. Right out of school, men and women earn about the same amount. However, starting in their late 20s, the gap begins to appear, and it grows with each subsequent year. Women who start families are more likely to require flexible work schedules, and this hurts their salary; not just due to unpaid leave as described in the MBTA bus study, but also due to interruptions in their career from childbirth, difficulty working nights and weekends, the need to care for children over the summer, etc.

The author also notes how even married women without children tend to earn less, “because women are more likely to give up job opportunities to either move or stay put for their husband’s job,” as well as the unequal division of labor at home. Conversely, unmarried women without children tend to earn the same as men throughout their careers.

Motherhood can also help explain the racial wage gap, since single-parent households are significantly more common among African American and Hispanic families.

So Is The Gender Pay Gap A Moral Panic?

Going back to the headlines I saw at the top of this article, what immediately strikes me is that there’s a much more alarming tone than what the studies seem to imply. MarketWatch discusses how black women “miss out” on almost $1 million over the course of their careers compared to white men. The Time Magazine article covers a similar topic, but also invokes the history of slavery and Jim Crow to explain how black women are continuing to suffer from “systemic failures, many of which are steeped in the country’s history of racism and sexism.”

For both these articles, I’m struck by how poorly the wage gap is actually explained. There’s no mention of the different industries men and women are clustered in, nor is there any mention of single motherhood. It seems like both articles are more designed to capture your attention and invoke anger, rather than attempt to diagnose and solve the gender pay gap.

The third article, however, from The Guardian is perhaps the most puzzling. It summarizes a report from the Diversity Council of Australia, which claims that discrimination is the largest contributor to the wage gap, accounting for 39% of the reason why women are paid less (interestingly, motherhood does not appear on the chart). Furthermore, this number is up from 29% in 2014, implying that gender discrimination is very much on the rise.

However, when I read the actual report, it does not explain how it came up with this number. In fact, it doesn’t even offer a definition of discrimination, besides that it “can be understood as the element of the gender pay gap that would remain if men and women had the same levels of the other factors.” In other words, gender discrimination was used as a catch-all for everything that couldn’t be attributed to another factor. I’m puzzled why they didn’t call it “other factors,” as would’ve been more scientifically honest.

Intellectual Dishonesty

The gender pay gap itself is not a moral panic. It’s a real issue. Many women are unable to get ahead in their careers due to the demands of motherhood and eldercare, which disproportionately fall on their shoulders.

However, the way the gender pay gap is parsed by the mainstream media, and by politicians, is alarmist and intellectually dishonest. It’s rarely the fault of the employer that women are earning less than men; nor is it necessarily the fault of the government. We can mostly point the finger at a combination of biological and social factors; many of which are deeply rooted in our culture, and are difficult to solve.

How We Can Solve The Gender Pay Gap

I’m not going to claim to be a policy expert, but there’s at least 3 places we can look at to try and begin to solve the gender pay gap:

1. Businesses can offer more paternity leave. It may sound counter-intuitive, but offering both male and female employees parental leave allows parents to make a more reasoned choice over who will take a leave of absence after childbirth. It won’t fix things overnight, but over time, societal norms for childcare can change to accommodate whichever parent has more upward momentum in their career.
2. Year-round schooling. For single parents in particular, the fact that the public schools do not follow the same calendar as corporate America is a huge disadvantage. Doing away with the 3-month break over the summer, or funding some kind of public alternative could greatly help single mothers in the workforce.
3. Flexible scheduling. Harvard Economist Claudia Goldin has noted how the gender wage gap has improved greatly in the pharmacy industry over the last half century. The reason, she discovers, is because owner-operated establishments have largely been replaced by chains (CVS, Walgreen's, etc.) where a multitude of people can be employed at one time. This has given female pharmacy workers much more flexibility, both in their overall hours worked, and in their ability to take vacation days when needed. If more industries can replicate this model, of hiring more part-time workers instead of a single full-time worker, this should help reduce the wage gap.

At the same time, we should be weary of efforts that make the problem look better on paper without actually improving the lives of their female workers. In the Harvard study of Massachusetts transit employees, the authors noted how the MBTA attempted to resolve the wage gap by tightening restrictions on unpaid leave. This did lower the wage gap, but it also made female worker’s lives considerably more difficult, and very likely forced some of them to leave the profession.

Why Can’t Employers Simply Pay Women More?

If women are getting paid 2% less for the same work as men, why can’t we simply give women an across-the-board 2% pay raise and call it a day?

The reason is that it’s actually illegal for employers to pay men and women different salaries for the same work. The Equal Pay Act (EPA) has been on the books since 1963, and it allows employees to file claims if they believe they are being discriminated against.

Given the amount of coverage the gender pay gap has received, and the fact that many popular politicians, like Kamala Harris, have proposed legislation to penalize unequal-paying employers, it may come as a surprise to learn that equal pay is already the law of the land. Sure, it’s not a fool-proof law, and there’s a fair case to be made that it needs updating, but it’s no reason to simply gloss over the EPA.

Then again, it shouldn’t come as a surprise that politicians would rather spread fear and “us vs them” rhetoric than fess up to the complicated, messy reality of gender politics in 2019.