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Richard Rider

“Equal Pay Day” and the 23% gender pay gap myth

“Equal Pay Day” — the day in April when women supposedly have to work before reaching parity with men’s pay — is perhaps the biggest hoax in progressive economics.  And that’s saying something!

Yet the press seldom looks at the bogus math behind the claim that women make only 77% of what a man makes doing the same job.  Even President Obama’s official White House website repeats the same canard, and it seems the press never questions the administration about this false claim.

That “77 cents vs. a $1” claim is arrived at by taking ALL pay for ALL occupations and comparing the AVERAGE pay by gender in the aggregate.  Any cursory review of this figure makes clear that this is NOT comparing “equal pay for equal work.”

Below is perhaps the best overall succinct debunking of this nonsense.  Would that the press would provide this information to the public.  Not gonna happen.

BTW, one factor NOT included in this article is my observation on compensation:  Since women live longer on average than men, then if they are covered by “defined benefit” pensions (most government employees, and social security), they have more valuable pensions than men as women’s pensions pay out for years longer on average. 

In essence this female windfall is an unnoticed gender discrimination in the pay matrix — one that is equalized only to the extent that they have “defined contribution” plans (401k-type retirement).   

Moreover, a longer life means more medical and assisted living costs, which are often paid by taxpayers.  

Visit any assisted living facility, and you’ll find that 80+% of the residents are female.  Women rule!

Some thoughts on Equal Pay Day and the 23% gender pay gap myth
by Professor Mark Perry

The American Association of University Women (AAUW), along with the National Committee on Pay Equity (NCPE), are major participants in the feminist propaganda machine that mobilizes its forces every April and engages in statistical misrepresentations to publicize the annual feminist holiday known as Equal Pay Day. Last April, AAUW executive director Linda D. Hallman sent a mass email that made this verifiably false statement (emphasis added):

Think about it: Women have to work almost four months longer than men do to earn the same amount of money for doing the same job. What’s more, we have to set aside a day each year just to call the nation’s attention to it.

Hallman’s statement is a statistical fairy tale because it’s based on the false assumption that women get paid 23% less than men for doing exactly the same work in the exact same occupations and careers, working side-by-side with men on the same job for the same organization, working the same number of hours per week, traveling the same amount of time for work obligations, with the same exact work experience and education, with exactly the same level of productivity, etc. In other words, the AAUW, NCPE, progressives, and gender activists falsely assume that employers all across America are using coupons like the one above to get a 23% wage discount for every woman they hire, and it’s that rampant, unjust and blatant gender discrimination that is the culprit behind the gender pay gap.

For example, Sen. Gary Peters (MI-D) said at this time last year that (emphasis mine): “Today, April 14th marks Equal Pay Day, the date by which women have made up for the wage discrimination they suffered during the previous year.” That’s complete statistical nonsense.
The reality is that you can only find a 23% gender pay gap by comparing raw, aggregate, unadjusted full-time median salaries, i.e. when you control for NOTHING that would help explain gender differences in salaries like:

  1. Hours Worked: The average man working full-time worked almost two more hours per week in 2014 compared to the average woman, see my analysis here.
  1. Type of Work: As I reported a few days ago, men represented 92.3% of workplace fatalities in 2014 (and the male share of job-related deaths has been consistently that high in every previous year) because men far outnumber women in the most dangerous, but higher-paying occupations like logging, mining and roofing that have the greatest probability of job-related injury or death. In contrast, women, more than men, show a demonstrated preference for lower risk occupations with greater workplace safety and comfort, and they are frequently willing to accept lower wages for the greater safety and reduced probability of work-related injury or death.
  1. Marriage and Motherhood: a) single women who have never married earned nearly 94% of male earnings in 2014; b) more women than men leave the labor force temporarily for child birth, child care and elder care, and c) women, especially working mothers, tend to value “family friendly” workplace policies more than men, according this Department of Labor study.

Most economic studies that control for all of those variables conclude that gender discrimination accounts for only a very small fraction of gender pay differences, and may not even be a statistically significant factor at all. For example, as Andrew Biggs and I pointed out in a 2014 WSJ op-ed:

In a comprehensive study that controlled for most of the relevant labor market variables simultaneously—such as that from economists June and Dave O’Neill for the American Enterprise Institute in 2012—nearly all of the 23% raw gender pay gap cited by the UUAW can be attributed to factors other than discrimination. The O’Neills conclude that, “labor market discrimination is unlikely to account for more than 5% but may not be present at all.”

On Equal Pay Day, when groups like the AAUW and NCPE point to a 23% unadjusted gender pay gap and demand that the pay gap be completely closed, what they are really saying is that they want women to:

  • Work longer hours on average like men do;
  • Work in riskier, less safe occupations like logging and commercial fishing like men do where the chances of getting injured or killed are much greater;
  • Work in more physically demanding occupations like farming, construction, roofing, logging and working on oil rigs, where they’d be working alongside men outside in 100 degree weather in the summer and below zero weather in the winter;
  • Accept fewer jobs in family-friendly workplace environments like teaching elementary school that coincide with their children’s schedules (with summers off, etc.), and accept more jobs in less family-friendly workplace environments like being an over-the-road truck driver or being an oil field worker.
  • Take less time off, or no time off, for child birth and child care to minimize their time away from the labor force that might affect their earnings.

Bottom Line: Those who publicize Equal Pay Day and demand that the unadjusted 23% pay gap be reduced to zero are unknowingly really advocating that men and women play completely interchangeable roles in the labor market and identical roles in their family responsibilities; and that’s an outcome I don’t think most women (or men) really want. As the Department of Laborconcluded in 2009, “The differences in raw wages may be almost entirely the result of theindividual choices being made by both male and female workers.” They also concluded that “the raw wage gap should not be used as the basis to justify corrective action.”

As I concluded on my recent related post, once we adjust for all of the factors that contribute to the raw difference in pay by gender, Equal Pay Day actually probably fell close to December 31 of last year. Or maybe the first week of January…. but NOT the second week of April. Women should be embarrassed by the economic myth that is annually perpetuated on their behalf by Equal Pay Day, which suggests that gender discrimination in the labor market burdens them with 14 additional weeks of work to earn the same income as their male counterparts earned the previous year – when that’s not even remotely true.