Published April 02, 2014
“An explanation is where the mind comes to rest.”— Unknown
The pay gap: women earn less than men, and one study suggests 77% of men’s pay. Others argue that no, the wage gap is actually just 93% to 95%, according to analysts, citing 2009 research commissioned by the Dept. of Labor, a much smaller gap that takes into account women who, say, leave work to have babies or take care of senior parents or work part-time jobs.
But a closer look at the analysis shows that even the Labor study repeatedly warned the evidence for a U.S. pay gap of 93% to 95% is not conclusive. In addition, studies worldwide show women do earn far less in wages compared to what men earn.
The study by Consad Research Corp. commissioned by the U.S. Department of Labor examined more than 50 peer-reviewed papers and estimated that the 77% wage gap "may be almost entirely the result of individual choices being made by both male and female workers."
But the researchers also warned that either they did not have enough long-term data or the studies they looked at had too few workers to definitively ascertain why exactly the wage gap exists, as well as the size of it.
The government researchers also warned they did not have enough data to ascertain the impact of various factors like work experience, tenure, occupation and industry to deliver “adequate analysis” of what the true wage gap really is.
Specifically, the Consad researchers warned that “data bases that contain such information include too few workers, however, to support adequate analysis of factors like occupation and industry” or “do not collect data on individual workers over long enough periods to support adequate analysis of factors like work experience and job tenure.”
They also warned: “As a result it has not been possible to develop reliable estimates of the total percentage of the raw gender wage gap,” though their statistical analysis “produced results” that showed the pay gap could be between 93% and 95%.
It’s not just the fact that use of the word “may” is prevalent throughout the study, showing the research is far from conclusive. The Consad Research report itself indicated the analysis merely gives signposts of what could be the cause, and repeatedly warned that “the data for other factors was not available” to definitively determine why the pay gap exists.
Missing, too, is a huge whopper that could cause the wage gap. Due to a lack of data, the researchers could not include in their analysis whether women are rejected from jobs they apply for right from the get go because they have children, even if they had resumes identical to men—an all too prevalent reality that undercuts the theory that the “pay gap doesn’t exist.”
Domestically, this matters more than ever, since the U.S. now has an estimated 91.4 million non-institutionalized men and women over the age of 16 not working, an all-time high. That’s 10.9 million more than the 80.5 million not in the labor force when President Barack Obama took office, as the president continues to battle the fallout of one of the worst recessions that ever hit the country.
CareerBuilder and Economic Modeling Specialists also note that more than 2.9 million workers had temporary jobs in 2013, up 28% from 2010. The employment research companies also said in a statement that about one out of ten new jobs created since the recession ended have been temporary or contract jobs, and that “a record number of Americans now work in these positions, which can lead to full-time positions, but often don’t promise long-term certainty.”
Analysts have cautioned that the often-cited 77% pay gap figure is an average of all full-time women, no matter their education, profession or family status, with all full-time men. This approach though does not take into account things like choice of vocation, numbers of hours worked (i.e. overtime), amount of work experience, or consecutive years worked (i.e. tenure).
The Consad study also noted that having children is associated with a 7.3% reduction in the wages of working mothers, which is even lower when other factors like education or flexible work schedules are taken into account. Study researchers also warned that women may value total compensation which includes things like health benefits, more than men.
However, there are other studies out there that still point to a persistent pay gap—whether it’s 23 cents or 6 cents, it’s still there.
Researchers at the American Association of University Women (AAUW) examined male and female college graduates one year after graduation. They found, inexplicably, that the wage gap was 6.6 cents. The National Women's Law Center also said in a statement that various studies show that even when career and family status “are taken into account, there is still a significant, unexplained gap in men's and women's earnings."
Also, the Dept. of Labor report is U.S.-centric. An earlier, broader 2005 analysis by researchers Doris Weichselbaumer and Rudolf Winter-Ebmer of more than 260 pay gap studies from more than 60 countries from the 1960s to the 1990s discovered that, while the pay gap worldwide fell dramatically to 30% from about 65%, the drop was largely due to improving pay for women. This research, too, found a nagging, chronic pay gap component that could not be explained, a component that has not dropped over the years.
Economist Alan Manning of the London School of Economics also found that the pace of the declines in the pay gap has slowed down, and that working women could make less than men for the next 150 years due to discrimination. .Another study showed that, despite the fact they do the same job, female chief financial officers are paid 16% lower on average than men.
Here are more studies showing gender pay gaps worldwide:
From the study:
“On average, women in the EU earn around 16 % less per hour than men. The gender pay gap varies across Europe. It is below 10% in Slovenia, Malta, Poland, Italy, Luxembourg, and Romania, but wider than 20% in Hungary, Slovakia, Czech Republic, Germany, Austria and Estonia. Although the overall gender pay gap has narrowed in the last decade, in some countries the national gender pay gap has actually been widening (Hungary, Portugal).
“The gender pay gap exists even though women do better at school and university than men. On average, in 2012, 83% of young women reach at least upper secondary school education in the EU, compared to 77.6% of men. Women also represent 60% of university graduates in the EU.
“The impact of the gender pay gap means that women earn less over their lifetimes; this results in lower pensions and a risk of poverty in old age. In 2012, 21.7% of women aged 65 and over were at risk of poverty, compared to 16.3% of men The overall employment rate for women in Europe is around 63%, compared to around 75% for men aged 20-64.
“Women are the majority of part-time workers in the EU, with 34.9% of women working part-time against only 8.6% of men. This has a negative impact on career progression, training opportunities, pension rights and unemployment benefits, all of which affect the gender pay gap.”
“In OECD countries men earn on average 16% more than women in similar full-time jobs. At 21%, the gender gap is even higher at the top of the pay scale, suggesting the continued presence of a glass ceiling. Even though there has been progress in narrowing the gender gap in pay, especially in employment, this is not enough and much remains to be done in many countries.
“The average pay gap between men and women widens to 22% in families with one or more children. For couples without children, the gap is 7%. Overall the wage penalty for having children is on average 14%, with Japan and Korea showing the greatest gap, while Italy and Spain have almost none.”