Do Women and Men Earn Equal Pay in 2007?

Do women and men earn equal pay? I blogged some about this last year, but the gender gap in wage earnings was in the spotlight again when kgw.com (and other media) reported that five restaurant owners in Oregon plan to drop their prices for female customers by 23 cents. The restaurants want to raise awareness about women earning 23 percent less than men in the workplace.

The American Association of American Women, which is sponsoring the event, says that when the new prices go into effect, 23 percent of the 2007 will have passed, thus, that's the number of extra days women will have to work in 2007 to catch up with men.

Likewise, as reported on nysun.com, Senator Hillary Clinton is pushing the "Paycheck Fairness Act," a bill that would intensify anti-discrimination laws, create a negotiation skills training program for women and stop retaliation against employees who disclose their salaries. Sen. Clinton also says that women make 77 percent of what men earn (or 23 percent less). Is that number accurate? Do women and men earn equal pay? Is this a case of comparable pay versus equal pay?

How would earning 77 cents on the dollar affect your salary?  Find out with our salary calculator.

Do women earn less than men on the pay equity table?

Do women earn less than men on the pay equity table? According to money.cnn.com, the oft-quoted "77 cents" sounds like women are earning less than men are to do exactly the same job. This gender gap in wage earning stat is from a 2004 study by the Census Bureau, which was actually a comparison of median earnings of working men and women who clocked in at least 35 hours per week. It didn’t compare men and women working the same job, as rhetoric often suggests, but rather, median income from any job.

According to Heidi Hartmann, president of the Institute for Women's Policy Research, the wage gap "is a good measure of inequality, not necessarily a measure of discrimination…parsing out [the actual reasons for the wage gap] is difficult to do."

Being paid unequal wages for different jobs is the American way. The socialists among us may not like it, but professional football players make more than surgeons, surgeons make more than nurses, and nurses make more than nursing assistants.

Gender discrimination may be a factor in why the jobs that pay better have a higher fraction of men, and the jobs that pay lower wages have more women. However, there are many reasons besides gender discrimination why women may choose, rather than be forced into, the lower median salary jobs. These reasons are often not only legitimate, but can be wise.

Comparable Pay versus Equal Pay

As reported by money.cnn.com, Warren Farrell, author of Why Men Earn More: The Startling Truth Behind the Pay Gap – and What Women Can Do About It, believes this is a case of comparable pay versus equal pay, or apples and oranges. He says men are more likely to make life-decisions that will lead to a higher annual salary. He says males are more apt (than women) to relocate or travel for work, take on more dangerous jobs (over 90 percent of workplace deaths are reportedly men), work in the difficult (read boring) sciences, seek jobs that require financial risk and work jobs in unpleasant environments.

In contrast, he says, "women commonly prefer jobs with shorter and more flexible hours to accommodate the demands of family. Compared to men, [the majority of] women generally favor jobs that involve little danger, no travel and good social skills. Such jobs generally pay less.” For women who earn over $100,000 per year, Farrell says they are more likely [than men at the same pay] to give up a portion of pay to spend more time with their families. Of course, not all women choose to forgo pay, as my post on top paid female executives discussed.

The Positive Effects of Equal Pay Rates

In some careers, Farrell says women actually earn more than their male counterparts do, and he's not just talking about the field of modeling. According to Farrell, the median salaries of women exceeded that of men's by at least 5 percent, and in some careers, up to 43 percent in 39 occupations. Some of the 39 professions include: sales engineers, statisticians, legislators, transportation workers, automotive service technicians and mechanics, speech-language pathologists and library assistants.

While the 77% number is not all overt sexism, gender discrimination may still be part of the story. A Cornell study found that mothers with kids are less likely to be hired, and, even if they are, the moms are paid a lower annual salary than males and females without kids. A Carnegie Mellon study found that female job applicants were less likely to be hired by male managers, if they tried to negotiate a higher salary, unlike men. Some years ago, the Massachusetts Institute of Technology found that female scientists were paid less than men are.

Pay scale difference between men and women out of college

What about right after men and women graduate college? Those men and women should be the least likely to show a pay gap, as typically they are not yet parents. According to a recent study by the American Association of University Women Educational Foundation (mentioned on pamshouseblend.com), there is a pay scale difference between men and women out of college. One year out of college, women who are working full-time are earning 80 percent of what men earn. The study also says that, ten years after graduation, women were earning 69 percent as much as men.

Like the 77 cents on the dollar number, this study was based on median income from all jobs. There is a logical reason behind some of the disparity. According to CNN.money.com, the gender gap in wage earning study said, “Female students tended to study areas with lower pay, such as education, health and psychology, while male students dominated higher-paying fields such as engineering, mathematics and physical sciences.”

We see in the PayScale data exactly the same trends. In our database, the salaried jobs most popular with women are substantially less well paid that the salaried jobs most popular than men.

Equal Pay for Same Job?

Still, one year after graduation, the AAUW study says that the gender gap in wage earning also occurred between females and males who had the same major. The study says that women earned 95 percent as much as men earned in the field of education. In math positions, women earned 76 percent as much as men earn.

However, the same major still is not apples to apples. For example, female math majors are more likely to go into education (poorly paid) than male math majors are.

The AAUW study did make one definitive statement about gender discrimination one year out of college:

"[...A]fter controlling for all the factors known to affect earnings, college-educated women earn about 5 percent less than college-educated men earn. Thus, while discrimination cannot be measured directly, it is reasonable to assume that this pay gap is the product of gender discrimination."

Whether this 5% difference is really gender discrimination by employers, or still some other residual difference that was not measured, is not so definitively proven. As someone who spends all day trying to construct questions to figure out why employees' pay varies so much, I know it is hard to "control" for all the factors influencing pay. The AAUW study controlled for the factors they had measured.

I happen to have one personal data point where a woman was paid ~5% less than a man (me), by the same employer, to do exactly the same job, when each of us had nearly the same credentials.

When I was hired in 1992 to work as an assistant professor at Duke University, I was offered $45,000/year. I figured $3,000/year was nothing to a University - I already had negotiated for ~$100,000 worth of research support - so I asked for $48,000/year, and got it.

A fellow female physics professor was hired at the same time. She was offered the same $45,000, and she took it. A couple years later, over lunch she learned I was earning more. She promptly went to the department chair, asked for a raise, and got it.

Was this discrimination on the part of the department chair, or just fiscal prudence? While one cannot draw any conclusions from one data point so long ago, it does show that Senator Hillary Clinton may be on the right track in emphasizing negotiating skills.

Do you have the data you need to negotiate your next raise, or even pick a high paying career? The PayScale Salary Calculator is a quick and easy way to explore possible careers. When you want powerful salary data, with comparisons customized for your exact position, be sure to build a complete profile by taking PayScale's full salary survey.

Cheers,

Dr. Al Lee

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