Phil Gramm and John Early do a great job refuting the persistent concept of a gender pay gap in the Wall Street Journal. Whatever gap exists doesn’t stem from gender discrimination but rather from job choices.
The pay gap as published is calculated each year by dividing the average full-time, year-round pay for women by the average full-time, year-round pay for men. But, as the authors point out, “that comparison is misleading because full-time, year-round work is defined so broadly.” Comparing a lumberjack working 70 hours/week with defined hours earning $100,000/year with a secretary working 35 hours/week with flexible hours earning $50,000/year would calculate as a 50% pay gap. This number borders on meaningless.
Women often opt for different career paths based on flexibility or risk. Some prioritize family over maximizing income. Adjusting for factors like education and job risk narrows the gap. Women’s experience and child-rearing further affect their earning power. Fewer women graduate in high-earning fields. Men take riskier jobs, leading to higher wages but also more danger and less job satisfaction.
It’s no longer likely that a company is going to pay a woman 16% less pay for virtually the same work and get away with it. If that was truly the case, it would logically conclude that businesses would hire as many women as possible in order to minimize the cost of labor and maximize potential profits. But that’s just not happening.
The last time I wrote about “the Gap,” during the Obama administration, it was 23%. Now it’s 16%. Men’s evolving roles at home and preference for job flexibility, and women seeking the tougher jobs, have narrowed the pay gap. Understanding these nuances helps to explain wage disparities in terms of extenuating factors — and not gender.