Yes, Virginia, There Is a Gender Wage Gap

Yes, Virginia, There Is a Gender Wage Gap

Yes, Virginia, There Is a Gender Wage Gap

If only the gender wage gap weren’t caused by discrimination. But the data says otherwise.


I would love to agree with Ramesh Ponnuru’s latest Bloomberg column, in which he argues that the gender wage gap—in which women on average still make seventy-seven cents for every dollar a man makes—is not caused by discrimination. Ponnuru argues that, rather, it’s caused by different choices women make in their career paths and family formations. Wouldn’t it be great if the gap didn’t exist because women are held back and given less, but because they simply want different things? And it’s certainly true that the fact that women are congregated in a different set of jobs and often have to leave the workforce when they have children plays a role. But even this can’t explain away the gap.

Ponnuru cites research by conservative economist Diana Furchtgott-Roth and a consulting company showing that the gap all but disappears when factors such as women’s working fewer hours, going part-time or taking breaks from their careers are taken into account. But the Government Accountability Office has already examined this question. The GAO tried to figure out just how much of the gap could be explained by these sorts of factors. To do so, it first performed a quantitative analysis using data from the Panel Study of Income Dynamics, a nationally representative longitudinal data set. It also supplemented that work by interviewing experts, reviewing the literature and contacting employers.

What did the study find? It’s true that a variety of factors come into play—among them work patterns, job tenure, industry, occupation, race and marital status. But when it stripped all of these out, it still found that women earned about 80 percent of what men did. “Even after accounting for key factors that affect earnings,” the authors report, “our model could not explain all of the difference in earnings between men and women.” While it couldn’t definitively say what caused that 20 percent gap, plain old discrimination was one of the few possibilities it highlighted.

The idea that women are paid less because they choose certain industries or occupations also doesn’t get us very far. Among the Bureau of Labor Statistics’s list of nearly 600 occupations, women make less than men in all but seven of them. And even in those where women make more, the difference is often as slight as a couple of dollars a week. They even make less in each industry: among the BLS’s thirteen industry categories, women make less than men in every single one. What this means is that even in “women’s fields,” men are going to rake in more. In fact, men have been entering traditionally female-dominated sectors during the recovery period, and as the New York Times noted, they’re meeting with great success—“men earn more than women even in female-dominated jobs.” Women can enter engineering all they want, but their pay still won’t catch up to men’s.

What of the idea that women are paid less because they don’t ask for more money? Ponnuru argues that “women are less likely than men to drive hard bargains in salary negotiations,” which might explain some of the gap. But that idea is based more on stereotypes of women shying away from ambition than reality. Research firm Catalyst found that women do in fact ask for more money—they just aren’t rewarded for it. It looked at the career paths of thousands of MBA graduates, men and women, who were similarly ambitious about their career paths. It found that among those who moved on from their first job, “there was no significant difference in the proportion of women and men who asked for increased compensation or a higher position.” But there was a big difference in how much they ended up making—the women had slower compensation growth, and the gap got wider and wider as their careers progressed.

Another recent study focused on the manager side of the equation: are they rewarding men and women who seek raises equally? Turns out the answer is no. When managers were told they had a limited pot of money to give out in raises to employees with the same skill and experience levels, managers gave men raises that were two and a half times larger than women’s when they knew they’d have to negotiate. In short: women ask, but they don’t receive.

Ponnuru does acknowledge that women’s personal choices may be constrained by social expectations and structures. Indeed, when talking about the fact that many women drop out of the workforce to care for children or end up cutting back their hours, we’re not just talking about fully equal options. Many women don’t have a lot of other financial options—single mothers whose childcare costs outpace their wages, parents who can’t afford the incredible cost of childcare, the fact that we are one of the three nations of 178 that doesn’t guarantee paid maternity leave (not to mention paternity leave). That’s why his claim that “there’s no reason to think that women will ever, on average, have the same preferences as men about combining employment and parenthood” is doubtful. We haven’t given them the chance.

So does this mean, as he tries to claim, that we can’t look to employers to fix the gender wage gap? Should we throw up our hands? It’s true that this is a complex issue that can’t be solved with one silver bullet. But there are things that need to change in the workplace. Salary secrecy is a big one. How are women going to fight discrimination if they’re barred, as about half of all workers are, from talking with their coworkers about pay? Employers also have to fix a broken career pipeline that keeps equally ambitious women in lower pay jobs and prevents them from reaching the top ranks. Other solutions have to come from the government, such as guaranteeing paid family leave, increasing childcare support so parents can afford quality choices and raising the minimum wage, since the vast majority of those workers are women.

Surely the gender wage gap is a complicated issue. But dismissing it as a figment of feminists’ imagination, which seems to be a new conservative meme, is disingenuous. We can disagree on the solutions, but we shouldn’t be fighting over the basic premise.

Update: Ramesh Ponnuru (very quickly!) responded to this piece, and I appreciate his civility. He doesn’t dispute the findings of the GAO study I cite, but isn’t convinced that the remaining 20 percent pay gap is due to discrimination. In some ways that’s fair—the GAO is careful to say that it can’t definitively pinpoint what’s causing that remaining gap. It’s incredibly hard to prove that it is in fact widespread discrimination. But I think some of the other points I made make a pretty good case that discrimination is going on. Take the study of managers: it was clear that they were biased against women, giving men raises that were more than double what they gave women. There have been other studies along these lines, like one that showed people identical résumés but with some mentioning that the applicant was a mother and others mentioning the applicant was a father. Fathers were offered $6,000 more than non-fathers in compensation; mothers were offered $11,000 less than non-mothers. Studies like these expose our deep-seated ideas about women in the workplace, held by men and women alike, that impact hiring and salary decisions.

He also points out that I didn’t respond to the one piece of legislation he condemns in particular, which he calls the “comparable-worth bill called for by NOW.” I’m not sure what bill he’s referring to—in the press release he cites, NOW mentions both the Paycheck Fairness Act (H.R. 1519/S. 797) and the Fair Pay Act (H.R. 1493). The Paycheck Fairness Act seeks to end pay secrecy—allowing employees to talk to one another about their compensation so that women can be made aware of any potential discrimination—and clarifies and strengthens the definition of what counts as a justification for pay disparities while beefing up the penalties for businesses that fail to provide equal compensation to proactively deter it.

Given Ponnuru’s description, however, he likely means the Fair Pay Act. He claims that the bill would “force employers to change the pay scales for different jobs” and that “the government would be invited to decide appropriate pay levels, one lawsuit at a time.” That’s not quite what it does. It amends the Fair Labor Standards Act to prohibit discrimination in compensation on the basis of sex, race or national origin, while allowing exemptions for “seniority systems, merit systems, systems that measure earnings by quantity or quality of production, or differentials based on bona fide factors that the employer demonstrates are job-related or further legitimate business interests.” It also prohibits firing or discriminating against employees for opposing anything the Act makes illegal or assisting in an investigation, and it calls for the EEOC to study and report its effects. That doesn’t sound like the government dictating wage scales—particularly given all of the exemptions for actual performance. If a company is paying a woman less than a man for any reason other than quality or quantity of work, seniority, merit or other defensible factors, what could possibly be the justification? 

I’ll reiterate that I don’t think it will take one thing to close the wage gap—although, contra Ponnuru’s statement, I do disagree with his assertion that “there’s no reason to expect or want the gap ever to close completely.” We can close the gap, but we have to address the many structural factors that go into it. These bills would take solid steps toward that goal, but they won’t do it by themselves.

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