April 8, 2014

'Equal Pay Day' Is A Fake Holiday

By: Hadley Heath Manning

Today, left-leaning feminist organizations have been promoting a faux-holiday, “Equal Pay Day,” which they say illustrates how far into 2014 women must work to catch up with men’s earnings from 2013.  This is based on the statistic that average fulltime women’s wages are 81 percent of average fulltime men’s wages.

No one denies this data point, but on “Equal Pay Day,” we should have a discussion about what it actually means. Contrary to what some feminists say, the wage gap statistic does not compare “equal work” or wages that have been corrected for education, field, experience, hours worked, or job conditions. The wage gap is not evidence of discrimination, but of the different choices women and men make.

Importantly, the wage gap does not compare female doctors to male doctors, or waitresses to waiters, or female teachers to male teachers. Women are disproportionately overrepresented in fields with lower wages, and this weighs down the average woman’s wage.  Most of the highest paying career fields still tend to be male dominated, and most of the least lucrative fields are more female heavy.

This is not to say that women are segregated into these fields or pushed to take lower-paying jobs without any choice in the matter.  Often, women are making the conscious decision to make tradeoffs: Some fields or positions offer more flexibility, comfort, safety, or leave time in exchange for lower pay.

Surveys of women can show us their preferences: College women tend to major in less remunerative fields of study because, according to research, they often consider “non-pecuniary” issues like parental approval and enjoyment of future work when choosing a major, while their male colleagues are more concerned with salaries and status.

Furthermore, more working mothers than working fathers say they prefer part-time work.  Sixty-two percent of working moms say part-time work is ideal, while 21 percent of working dads feel this way.

When the Bureau of Labor Statistics calculates the wage gap statistic, they compare the average weekly earnings of fulltime men and women. Fulltime, as defined by the Current Population Survey, means anyone who works more than 35 hours per week.

But it turns out that – consistent with their preferences – men actually spend more time on the job: The average fulltime working male works 8.5 hours per day (42.5 hours per week) compared to 7.9 hours per day (39.5 hours per week) for women.

If we want to compare apples-to-apples, or find the “equal work” comparison, we shouldn’t be surprised that when men work longer hours on average, they make more money.

In fact, some economists have tried to correct for variables like field and hours worked to find a more accurate measure of how men and women are actually paid for equal work. These studies naturally show that the wage gap is smaller, or even nonexistent. Using data from year 2000, economist June O’Neill shows women made about 97 percent of men’s earnings, and even the liberal American Association of University Women have found the “unexplained” gap to be about 6 percent.

One study even showed that young, single, childless women in urban areas were out-earning their male counterparts by about 8 percent.  That’s a reverse wage gap.

But at some point we have to step away from the numbers and see the bigger picture.  Equality is an important American value, no doubt. And lawmakers, as well as the rest of society, should want to ensure that women have equal opportunities in the workplace.  But the goal shouldn’t be to eliminate the disparity between women and men’s average fulltime wages. To get there, we’d have to ask women – and men – to recalibrate their preferences and priorities when it comes to work and pay.

Instead, this “Equal Pay Day,” the goal should be to correctly inform men and women of the opportunities and tradeoffs available to them in the workplace, and then let us – as individuals – make decisions that best suit our own pursuit of happiness.

Follow Hadley Heath on Twitter. Equal pay image courtesy of Big Stock Photo.