Wednesday, April 9, 2014

The ’77 cents on the Dollar’ Myth about Women’s Pay

The Obama Administration recently announced a series of executives orders to address the gender pay gap issue a few days. Here is an WSJ opinion article written by Mark J. Perry and Andrew Biggs, both from the American Enterprise Institute that advocates conservative policies, arguing against the existence of a gender pay gap:  http://online.wsj.com/news/articles/SB10001424052702303532704579483752909957472?mod=trending_now_1

Here is a key quote towards the end of the article:

"Administration officials are (very) occasionally challenged on their discrimination claims. The reply is that even if lower average female pay is a result of women's choices, those choices are themselves driven by discrimination. Yet the choice of college major is quite free, and many colleges recruit women into high-paying science or math majors. Likewise, many women prefer to stay home with their children. If doing so allows their husbands to maximize their own earnings, it's not clear that the families are worse off. It makes no sense to sue employers for choices made by women years or decades earlier."

What do you guys think of the gender pay gap? Does it exist? If so, what are the causes?

12 comments:

  1. While gender discrimination is a very real issue facing the American working woman, I think this article does what many are afraid to do: delve into the possible underlying causes of the gender wage gap. Much more goes into the statistic of 77%--as illuminated in this article-- than simply sex.

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  2. I agree a lot about what Nick said. Our generation are the undertakers for the start of change regarding issues of sex.

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  3. Here is an article that represents different view on the issue:

    http://www.forbes.com/sites/forbeswomanfiles/2014/04/07/the-awful-truth-of-the-gender-pay-gap-it-gets-worse-as-women-age/

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  4. It's very easy to manipulate statistics. One can easily present statistics in the way they want by simply hiding variables. People according to their interest choose the variables so that the statistics favor them. In this article, the author has tried his best to bring out as many variables as possible to the world. We have often seen just a plain statistics in case of gender pay gap to strengthen their argument. There is no details given to the depth of the study. I won't say that gender pay gap does not exist. There are cases when a man and woman working in the same office in the same position have two different pay. However, I don't agree with those people who simply pull out statistics from random hat to make it a big deal than what it really is.

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  5. I'm not very well informed about this issue of the gender pay gap, but If exists, I wonder what kind of factors contribute to it. Also, I remember reading a piece about this on the Huffington Post in response to the WSJ op-ed (it also had a picture of Sheryl Sandberg looking furious):

    http://www.huffingtonpost.com/2014/04/08/gender-pay-gap-op-ed_n_5110934.html

    The article argues that the pay gap exists for women at all levels of their career, mothers or not, no matter what job they take. This suggests that there are very serious structural challenges that we need to address.

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  6. The HuffPost Hikaru posted is really excellent as a compliment to Tyler's WSJ initial article. I think the wage gap statistic is the most abused statistic in modern political discourse that I can think of.

    After reading a decent amount on the gap, it seems that on one hand WSJ and their conservative compatriots are right--the wage gap really is overstated, and often given without important context. I completely agree with that. However, I don't think in any way that, because the statistic is overstated, that means there is no wage gap. Or more importantly, there are structural inequalities that push women towards lower paying careers. Why don't women negotiate for higher salaries more often? Why are women in the workplace more often averse to risky career tracks? Why are women tending to choose lower paying careers?

    The one argument I don't buy, full-stop, is that women are explicitly and systemically undervalued in the workplace in terms of the jobs the fields they tend to choose (psych, an/so, nursing, actuary, etc...) and in terms of same job-less pay. The market values certain positions higher because those positions **make bank**. Most high-paid positions in finance aren't as socially value as, say, a nurse, but financiers make bigger cash flows than nurses. In terms of women not being paid as well in the same job as men--the responsibility is on workers to know and negotiate fair wages.

    This is actually why I support the law being proposed that would make it illegal for federal contractors to fire workers for discussing their wages--the law should be even more expansive: all laborers in all fields should be able to freely discuss their wages with each other and negotiate higher if they see fit.

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  7. I think this issue is actually deeper than it seems and I do agree with the statement mentioned earlier, "pay gap exists for women at all levels of their career, mothers or not, no matter what job they take." Definitely, in order to address the wage gap between women and men, much more than a person's gender should be taking into consideration.

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  8. I read this academic paper some time ago (http://www.nber.org/papers/w14681), and it discusses the gender gap in a much smaller population - graduates from the University of Chicago Booth Business School. The authors ran some regressions and found that the three biggest contributors to the gender gap were differences in class selection (men take more finance classes in general), time away from work (woman take more time off in general), and differences in weekly hours worked (women work less in general). Having children had a huge negative effect on earning potential.

    The article is more in line with Tyler's initial post and attempts to show that the gender gap can be explained by variables other than discrimination. As convincing as the data may be, I refuse to believe that society is arranged in such a way that gives women an equal chance as men. By missing this point, I find these arguments that no discrimination exist to be unconvincing. As Rasheed said, "Why don't women negotiate for higher salaries more often?" Why do women take fewer finance classes? In my opinion finance has been portrayed as a "man's world" and these structural issues are what I think are unfortunately pervasive.

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  9. gender pay gap certainly exists. this is stretching it beyond economics, but sociological studies have shown that since women are deemed more emotional and physically weaker their pay is lower than that of their male counterparts. the corporate world has historically been dominated by men and it is obviously no surprise that anybody who do not fit that standard is paid less despite their high rank. stats or not, it is a reality that women face. this law is necessary to close the gap and allow women a fair chance at being financially equal to men for the exact same position, with the exact same qualifications.

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  10. Sameen you make a great point, and I think this issue is getting the last push it needs by this law. While this law will get all the headlines for changing payroll structures, I think it is actually the corporate executive women that should be getting the headlines. There are more female CEOs (23 Fortune 500 female CEOs and one in our city of Detroit, Mary Barra) now than ever, and they really deserve the credit for what is happening.

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  11. I find this article very condescending. Although many might choose to believe that we live in an era of gender equality where men and women have equal opportunities and choices, the reality proves otherwise. One cannot discuss women in the workplace and completely ignore the different factors that shape women's realities. The authors invalidate the problems and impacts of gender gap pay on women by implying that free will is a universal 'right' awarded to everyone regardless of race, class, gender, age or sexual orientation. The authors states that "colleges recruit women into high-paying science or math majors." The writers fail to acknowledge that even women in those fields are still paid less than men. The fact that these authors attempt to invalidate pay disparities that arise from gender discrimination is very problematic. The writers claim that the "so-called gender wage gap" is economically illogical. Well, the discussion on women's discrimination in the workplace goes beyond economics.

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  12. I agree with the above statements. I think the article does an interesting thing in pushing the reader to find the root of the problem. I think as issues of inequality progress with our society we see changes in the way we talk about them. For example we have seen out spoken racism turn to institutionalized racism and benevolent racism. I think the same can be said for issues in the workplace.

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