March 3 2011

Furchtgott-Roth Exposes White House's "Wage Gap" Fiction

Carrie L. Lukas

The Hudson Institute's Diana Furchtgott-Roth weighs in today on the White House's latest report on women (which I wrote about here).  Diana exposes how the White House's rhetoric about women earning 75 cents for a man's dollar is knowingly misleading. She writes:

Its first page of text states: "At all levels of education, women earned about 75 percent of what their male counterparts earned in 2009." This spurious comparison as used previously by President Obama was 77 percent. Lowering the figure by two cents on the dollar compounds the error.

This calculation does not hold up when the comparison of men and women accounts for differences in education, years in the workforce, and other factors that influence pay. One example: regardless of gender, people with more job experience typically are paid more. That is widely accepted because on-the-job experience improves skill and efficiency.

As the White House report acknowledges further along in its 97 pages of text, tables, and charts, women aged 25 to 34 earn 89 cents on a man's dollar, even without accounting for different jobs and work experience.

But the White House, in thrall perhaps to ultra-feminists, opened its discussion of women's pay by using a sensational headline-grabbing comparison, 75 cents on the dollar, and it did capture many of the headlines....

So Diana does what the "most comprehensive report on women in 50 years" doesn't bother to do: she actually looks at the numbers.  And, after a little analysis, she shows that the wage gap shrinks to next to nothing once appropriate variables are taken into consideration:

The comparative wage calculations do not account for industry, educational field, occupation, or weekly time worked in excess of 35 hours. That's why women appear to earn less.

In the table, women who might have BA degrees in English are compared to men who might have BS degrees in physics. Women with associate degrees in social work are compared to men with associate degrees in computer science. Since full time means 35 or more hours a week, the table compares men who work 50 hours with women who work 37.

And women do work less than men. The report states on page 27 that "women of every educational level and at every age spend fewer weeks in the labor force a year than do men." In addition, "on the days that they worked, employed married women age 25-54 spent less time in labor market work and work related activities than did employed married men in the same age group-7 hours and 40 minutes, compared to about 8 hours and 50 minutes."

That's about 5 hours fewer per week, or, in a 40-hour week, 11 percent. So, just on the basis of hours worked, women should earn 89 percent of what men earn.

Turning to page 32, we find that-surprise!-young women actually do earn 89 percent of what men earn, without accounting for education or vocation. No mention of how this squares with the 75 percent ratio discussed on the same page.

The use of the 75 cents statistics isn't just sloppy--itis a willfully attempt to distort reality.  It also harms women by suggesting to them that they are bound to face systematic discrimination in the workforce. That's just not true.  For the most part, how much you earn is going to be a product of the kinds of jobs you take and how much you work.  That's important information for women-and men-to have.

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