Equal Pay Day is misleading

Posted 3/29/22

The National Center for Pay Equity promotes Equal Pay Day every year as the symbolic day when women will have earned as much as men did in the previous year. This year it was March 15. The stated …

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Equal Pay Day is misleading


The National Center for Pay Equity promotes Equal Pay Day every year as the symbolic day when women will have earned as much as men did in the previous year. This year it was March 15. The stated goal of the day is to bring attention to the disparity between men’s and women’s wages, which is said to be around 20 cents on the dollar.

The “gender wage gap,” as it’s called, is based on taking the average of men’s and women’s wages and comparing the two, without any considerations for any other factor affecting wage. It’s a highly misleading statistic, especially when the gap is automatically assumed to be the result of female employees being valued less than male employees.

What’s missing in the comparison is the fact that men and women make very different choices in their careers. The gap almost entirely disappears when controls for other factors affecting wage are considered, including career interruptions, amount of time taken off work, hours worked per week, job title, education, experience, industry and job level.

PayScale, a software and data company that analyzes salaries across industries for employers and employees, conducts an extensive annual online survey on how much people make in their careers. Between January 2020 and January 2022, over 933,000 took the survey. It found, when comparing the average women’s salaries to those of men, women made 18% less than men in 2021, which was an improvement from 27% less than men in 2014. However, the survey determined that when all the factors impacting wage are considered, women made only 1% less than men. The same comparison was 3% in 2014.

Men tend to work longer hours, take less time off and work more dangerous jobs outdoors — all of which are choices that garner higher salaries. This difference in choices also creates other disparities — ones that get almost no attention.

On his “Carpe Diem” blog, Mark J. Perry, a senior fellow at the American Enterprise Institute, annually calculates what he calls Equal Occupational Fatality Day. This is how many years women must work before they experience as many fatalities as men. In 2022, that day would be April 23, 2032. On average, 92% of all workplace fatalities are men.

If we were to apply the same reasoning to the gender workplace fatality gap that we apply to the gender wage gap, we’d have to assume this disparity in workplace fatalities is due to discrimination. Women are denying men safer jobs. That, of course, is as absurd as assuming a difference in wages between the genders can have no other possible cause than discrimination.

If discrimination is playing a role, it would be only about a penny on the dollar — which is not to say it’s OK. However, even that claim is based on a limited picture of wage disparities. According to the PayScale survey, there is no difference in men’s and women’s ages in the controlled wage comparison for ages 20 to 29. If that one penny difference were due entirely to discrimination against women, it would be impacting women regardless of age. It is possible that, perhaps, older women face slightly more discrimination.

Other breakdowns in the data also show a lack of consistent discrimination against women. In the health care support industry, there’s no difference between men’s and women’s wages, even when all other factors are considered. Make what you will of that. When all factors impacting wage are considered, a comparison between men’s and women’s ages shows that for every dollar a man makes in the legal industry, women make, on average, one penny more for every dollar men earn. Are male lawyers being devalued relative to their female counterparts?

The gap widens considerably with job level. Non-supervisory positions show a one-penny difference between men’s and women’s wages, but at the executive level, the gap grows to 5 cents. One could conclude that women are devalued the higher they climb the corporate ladder, or it could be that the men who enter those top positions are much more competitive and aggressive than those at lower levels, meaning the competition is fiercer.

What all this data shows us is that blanket assumptions of discrimination in pay just simply don’t hold up to scrutiny. If discrimination is impacting women’s wages, it’s a very tiny factor.