Women should earn what they are worth. There is no disagreement there. But what happens when the choices that women make about their careers directly influence their pay?
We are led to assume that women are being unfairly compensated because of their gender and, for minority women, their race. However, it is possible that women make tradeoffs to achieve the work-life balance they seek or pursue fulfilling occupations that may not come with a large salary. On so-called Equal Pay Day, these considerations must ground any serious discussions about women’s advancement and equality.
In 2019, women’s average weekly earnings in full-time jobs were 82 percent of those for men, according to the Bureau of Labor Statistics (BLS). This raw data is often misinterpreted to suggest widespread wage discrimination against women.
It’s disingenuous to quote this statistic as is. When controlling for factors that impact compensation such as occupation, job level, years of experience, job title, education, hours worked, and others the gap shrinks to a few cents—a more accurate representation. This gap is unexplainable, but even the BLS is unwilling to attribute it to discrimination.
Private data sources find similar low-single-digit wage gaps. Payscale.com’s annual Gender Pay Gap Report for 2020 found that women earn 2 cents less ($0.98 to every $1) than men when all factors were controlled for, but 19 cents when uncontrolled. Glassdoor’s 2019 analysis of salaries found that the 21-cent gender pay gap shrank to 5 cents when controlling for those factors.
Other analysis finds that Black and Hispanic women earn $0.62 and $0.54, respectively, for every dollar earned by white men, but these are not controlled for pay-influencing factors.
Let’s understand what creates the gender pay gap and racial gender pay gaps. Men average 40.1 hours each week, while women average 36.1 hours. Black women work an average of 37.2 hours weekly, which is above their white, Hispanic, and Asian female counterparts, but below all men, especially white men, who on average work the most of all racial and gender demographics (40.2 hours).
It also does not help that black women have the highest percentage of minimum wage workers, followed by white and then Hispanic women.
Occupational choices play a significant role in earnings as well. Women are more likely to work in professional services, office, and administrative support, and service occupations that carry lower pay than other occupations and they occupy supportive or lower-paying jobs than men. Professional services include popular occupations for women, including teachers, librarians, counselors, social workers, and social and human services assistants. Service occupations include supportive healthcare workers such as home health aids, dental assistants, and phlebotomists; food workers; and personal care workers such as nail technicians, hairdressers, and childcare workers).
Black women overwhelmingly pursue careers in professional services and service occupations. In 2019, 65 percent of black women were employed in these two occupational categories alone. Although the sales industry is also popular, Black women largely work in office and administrative jobs.
Some people claim that women, especially Black and Hispanic women, are forced into these lower-paying occupations and supportive jobs because of discrimination and that this segregation hurts their labor market outcomes as evidenced by wage gaps. That is speculative at best.
Educational levels and the differences in school quality may explain at least some of the racial wage gap attainment. Expanding school choice helps our black girls and young women overcome some of those obstacles by allowing them to leave behind failing schools.
Let’s not dismiss real instances of discrimination against women in the workplace. However, we should be careful to attribute any and all wage differences between the genders and the races to discrimination or to paint a picture of pervasive unfairness that sets all women up as victims.
Women have agency and can make decisions that maximize what they value most. For some that may be a paycheck, for others flexibility. Pursuing career tracks that require more travel or greater responsibility, are more dangerous, or require higher skills and education entail tradeoffs that many women simply don’t want to make.
Similarly, women, especially Black women, often pursue careers that allow them to care for their families and communities. That is noble and needed. However, those occupations are not compensated highly and may not offer job security—as we’ve seen during the coronavirus pandemic.
Education about choices and tradeoffs is one of the best empowerment tools. Increasingly, as women—especially minority women—learn about occupations where they can earn higher incomes, enjoy job security, and become business owners, they are moving toward them. The integration of the pharmacy profession is a great example.
In addition, reducing the barriers to enter into occupations imposed by excessive licensure and scaling back labor regulations that make it difficult to be an independent worker can increase access to well-paying opportunities and open the door to business ownership for women, particularly immigrants and minority women.
We can expand more and better-paying opportunities for women by getting our economy back to operating at full steam. But, we should reject efforts that disrespect the tradeoffs women make to have the work-life balance or fulfillment that they desire.