The Myth of the Wage Gap

Civil Rights Journal, Fall, 1999 by Diana Furchtgott-Roth

If women were systematically discriminated against, as some assert, then some entrepreneur would be able to step forward and take advantage of this. We would see that firms hiring only mothers would make larger profits than others. In the same way, if women were truly paid only 74 cents on a man's dollar, then a firm could fire all its men, replace them with women, and have a cost advantage over rivals. We do not observe this happening.

Since average wage gaps occur naturally in labor markets for reasons described above, the only way to get rid of such gaps is to require not equal pay for equal work, but equal pay for different jobs. That is called "comparable worth," and it aims to eradicate differences in pay across male-and female-dominated occupations. In 1999 comparable worth has been proposed by President Clinton in his Equal Pay Initiative, by Senator Harkin in his Fair Pay Act, and by Senator Daschle and Representative DeLauro in their Paycheck Fairness Act.

Under comparable worth plans, a job's worth would be measured by having officials examine working conditions and the knowledge or skill required to perform a task. These officials would then set "wage guidelines" for male- and female-dominated jobs. These criteria not only favor traditionally female occupations over male ones, but favor education and white-collar jobs over manual, blue-collar work. Neither experience nor risk, two factors which increase men's average wages relative to those of women, are included as job-related criteria. And men's jobs are more dangerous--ninety-two percent of workplace deaths are male.

The AFL-CIO/IWPR study calculated the cost of alleged "pay inequity" caused by the predominance of women and men in different occupational categories. The study compared the wages of workers in female-dominated occupations with those in non-female-dominated occupations. The workers had the same sex, age, race, educational level, marital and parental status, and urban/rural status; they lived in the same part of the country and worked the same number of hours; and they worked in firms of the same size in the same industry. The study concluded that women were underpaid by $89 billion per year because of occupational segregation. Without sex, race, marital and parental status, and firm and industry variables, this figure rose to $200 billion per year.

The study boasts an impressive list of variables, but it leaves out two major factors. First, it omits the type of job, saying in a footnote that "no data on the content of the jobs (the skill, effort, and responsibility required by workers who hold them nor the working conditions in which they work) are available" in the data set used. Second, it leaves out the field of education. It is meaningless to say that the earnings of a man or a woman with a B.A. in English should be the same as the earnings of a man or a woman with a B.A. in math. So the study compares workers without regard to education or type of work: secretaries are being compared with loggers, bookkeepers with oil drillers. Such numbers do not present an accurate estimate of wage gaps, and illustrate the difficulties of implementing the comparable worth proposals suggested by legislators.