This week left-leaning feminist activists are celebrating “Equal Pay Day,” which falls on March 15 this year.” Equal Pay Day represents the day to which women have to work, in aggregate, to catch up with men’s earnings from the year before.
Everyone loves the party game/icebreaker “two truths and a lie.”Can you identify which of the following is NOT true about the equal pay day and the wage gap?
A. Currently, the wage gap between women and men is 82 cents on the dollar.
B. The wage gap shrank during the Covid-19 pandemic.
C. The Paycheck Fairness Act would outlaw wage discrimination.
Let’s take these statements one at a time:
A. TRUTH! It is true that the wage gap is about 82 cents on the dollar. However, this statistic is widely misused. The wage gap isn’t a measure of equal pay for equal work. It is a comparison of averages, without any regard for profession, education, experience, hours, or working conditions. Men tend to work in professions that pay more, and they work longer hours and in more dangerous working conditions (on average) than women. In fact, when job type and employment characteristics are controlled for, the “wage gap” shrinks to just 2 percent. Read more here.
B. TRUTH! March 15th is the earliest Equal Pay Day on record, meaning that despite the disruption of the Covid-19 pandemic, the wage gap continues to shrink. But this phenomenon also illustrates how useless the wage gap statistic is: In the last few years, women have suffered disproportionate job losses due to school closures (and child care disruptions), and because women dominate professions in the social sector, the sector that suffered the most due to social distancing protocols. Unsurprisingly, women’s labor-force participation fell to a 35-year low in April of 2020.
Because the raw wage statistic only compares the median wages of full-time, working men and women, it fails to capture the full picture of women’s employment opportunities (or challenges). Women (and men) outside of the labor force (or those who work part time) aren’t included in the metric. The elimination of many lower-paying jobs for women during the pandemic caused the wage gap to decrease because of the way it is calculated. This isn’t necessarily good news for women or an indication that they are behaving more like men.
C. LIE! The proposed Paycheck Fairness Act wouldn’t actually outlaw discrimination. Sex-based wage discrimination is already illegal. Both the Equal Pay Act (1963) and Title VII of the 1964 Civil Rights Act protect women’s right to earn equal pay for equal work. Instead, the PFA would encourage more lawsuits and increase government oversight over businesses’ compensation decisions. Specifically, the PFA would invert our justice system by putting the burden of proof on employers to justify any statistical pay disparities.
All of this increased legal exposure would force employers to adopt more rigid, one-size-fits-all practices and discourage them from offering flexible work arrangements (that often come with the mutually-agreeable tradeoff of lower pay). Even the Washington Post editorial board once said of the PFA, it “invites too much intrusion and interference in core business decisions…Discrimination is abhorrent, but the Paycheck Fairness Act is not the right fix.”
Bottom Line: We want all women to have adequate legal protections in the workplace. Sadly, Equal Pay Day (and the wage gap statistic used to promote it) doesn’t tell us anything about the status of women in the workplace or the fairness (or unfairness) of their pay.
Equal Pay Day is worse than meaningless; it’s misleading. It’s not an accurate picture of how America works. When assessing the status of women (and all people) in the labor force, measures should focus on the degree of opportunities available rather than outcomes.
Policies should champion greater opportunities, flexibility, and freedom by reducing taxes and regulations and making it easier for people to start businesses and find a diversity of income-earning opportunities.