The Gender Wage Gap

The times we live in are difficult enough without people trying to sell so-called “fake news” as facts. Fake news is a term which was popularized by Trump in order to basically deceive his supporters that the media is dishonest. But just because in his case “fake news” cry has proven false, that does not mean that this phenomenon does not exist. We live in times where people spend huge amount of their day scrolling. Many times they scroll across some headline and believe it, without thinking or even clicking on it. Combine this tendency for instant gratification with the plainly simple truth that media these days does care a great deal about clicks, in order to get advertisements, so they form headlines like in a “you won’t believe” manner that are designed for people to click, just co confirm their bias or see something incredible.

Also, this era we currently live in has been greatly exposed to the dangers of relativism and dishonest post-modernism, so, some people even harbor a belief that everything is basically opinions, without any absolute truths. This state of mind is of course, deeply troubling, as this is exactly how we fall into the traps of believing that everyone can only say being bigoted is part of their culture and we cannot say anything against it.

Having said that, one of the movements that is sure to get a huge amount of smearing is feminism. Feminism has the potential to be deeply troubling to first of all, white patriarchal-type males which find it deeply troubling that women can possibly be on their level. Second of all, feminism poses great danger to basically all religions, as all of them think of women as lesser beings than men. Next, feminism can even be challenging to the established norms of society, where it is almost expected in some countries that women should stay at home and take care of children or even submit themselves to men’s desires. Even if we ignore all of this, it would still be in the interest of some corporations to spend less on salaries. If salaries are made more or less equal, they stand to lose. So, hopefully one can see what the motivation would be to try and prove that there is no such thing as a wage gap. Sorry to say this, but this establishment, whatever it is has managed to gain some leeway, because as has been argued before, today people generally are quick to believe anything they see online.

This post will try to bring to the table facts about the Gender Wage Gap. So, let us continue.

Or rather – rant is over, let’s begin. We’ll begin with quoting from Wikipedia, as it nicely summarizes what is actually happening.

There are two distinct numbers regarding the pay gap: unadjusted versus adjusted pay gap which takes into account differences in hours worked, occupations chosen, education and job experience. For example, someone who takes time off maternity leave will likely not earn as much as someone who does not take time off from work. Factors like this contribute to lower yearly earnings for women, but when all external factors have been adjusted for, there still exists a gender pay gap in many situations (between 4.8% and 7.1% according to one study). Unadjusted pay gaps are much higher. In the United States, for example the unadjusted average female's annual salary has commonly been cited as being 78% of the average male salary.

Wikipedia

To learn more, keep reading.

So, basically, there are two ways of looking at it, to begin with. Then, of course, things are different in different parts of the world, but Canada and the US are not that different from each other, and while EU seems better, it’s far from perfect. But any better result would be contrary to the idea that there’s pay gap which you might argue that this blog post is trying to prove, so it’s fair to include all three kinds of data – US, EU and Canada. Other world countries, like those in Africa can only make things worse, so they cannot generally be used as a rebuttal.

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The Unadjusted Pay Gap

This is a way of looking at the pay gap which does NOT take into account all of the factors that impact the gap’s existence, such as differences in education, number of hours worked, position, job sector, time off work, etc. This is where the pay gap is the largest. As has been quoted above, it has been discovered in this study that the pay gap is actually pretty big, and women get about 78 cents for every dollar a man makes. in the European union latest unadjusted gap is 16.4% (from 2012 – Eurostat). But it doesn’t take into account even the amount of work being done or the nature of work, or time off, or experience, it simply takes the average salaries of men and women and compares them. What’s the point, you might say? You might argue that this is not at all important and can easily be ignored, because one can get paid only for the amount of work done and the difficulty of the work being done and based on experience one has.

However, nothing in life is THAT simple to dismiss. Even this analysis points to some facts. First of all, men and women work in different professions. Most women have secretary type jobs, followed by cashiers and teachers.1 So, it could be argued that women are being stereotyped to work in these kinds of jobs and not encouraged to pursue a career further. But, we do not even need to do this, as there’s further sources for the analysis and conclusions, even in this unadjusted way of looking at things.

We can go down further to the same sector of company where women are mostly in the lower paid positions.2 This is certainly part of the reason for the huge difference in the unadjusted pay gap. And again, you might say, tough shit, why do the work at lower paid positions? But, is it at all likely that all of this is by choice? This is because women’s competences are undervalued when compared with men’s. Also, women are grossly misrepresented in the management and senior positions. Yes, you might argue, that this is not a matter of pay gap, but a matter of questioning why do men still dominate highest-paying jobs. That might be taken as true, if only unadjusted pay gap is analyzed. But, as this is the reason for the unadjusted pay gap, it’s kind of silly to say that it does not have anything to do with the pay gap itself. You may wish to leave the gender out of pay gap completely and focus exclusively on for example education, social factors, etc., where work needs to be done. But, unfortunately, as will be shown in the section about adjusted pay gap, it is not that simple, as pay gap exists even after adjustments.

One thing that should not be forgotten since it also concerns the Unadjusted Pay Gap a bit, where you might argue that women’s jobs are easier or something similar, is that when looking at the occupations men almost always earn more than women, meaning that in so-called women’s occupations, the highest paid are still – men. Same with men’s occupations, naturally – the men are paid higher. From 20 most common occupations for women, in 18 of those women earned less than men. In occupations for men, same result, men were paid more in 18 from 20 occupations.4 This data was from 2012., but it should be still relevant today, in case somebody found some more accurate information, do not hesitate to leave a comment.

Another point which should be touched upon is the often repeated mantra that women earn less, because they are less likely to choose risky, dangerous or dirty jobs. While it may be true that women choose less dangerous and dirty jobs, the FACT is that these jobs do not pay that much – the jobs with most fatalities are farming, mining, transportation, and construction3 and clearly these are not that high-paying jobs. The evidence shows that more dangerous jobs are not really associated with higher salaries. This might be unfair, but it is so. With that said, let’s move to:

The Adjusted Pay Gap

The Adjusted Pay Gap means that we adjust for all previously mentioned variables and then take a look at the data. So, what does adjustment mean, actually? It basically only means that the specific data is being looked at, for example any differences between men and women in the exactly the same positions, exactly the same jobs, exactly the same hours and see if there are differences there.

The European Union measures pay gap differently – average difference between men’s a women’s hourly earnings, while US defines it as a ratio of women’s to men’s yearly earnings. The EU claims that direct discrimination, or pay gap for the exactly the same job is a very small part of the unadjusted pay gap, but that this is due to the effectiveness of the European Union and legislation. So, even in the EU, it is admitted that direct discrimination does exist, but it’s argued that it’s small.2

The US Department Of Labor5 says that “decades of research shows a gender pay gap even after factors like the kind of work performed and qualifications (both education and experience) re taken into account”, so here we have even the Department Of Labor in The US and The EU Council admitting that the gender pay gap exists, even after decades of research are taken into consideration. Even after decades of pay equality laws, this still persists. Basically, no matter how you slice the data, gender pay gap is still visible. You can reduce it, by eliminating all factors and focus only on the exact same job, but it’s still there. Let’s see more examples:

CNN money column cites research where school teachers are taken into account. Women there hold more than 70% of the jobs, yet men still earn more for the same role. Female teachers earn about 87 cents to a man’s dollar. They also mention retail where women earn 70 cents and layers 83 cents on a dollar. For a huge table of data for US jobs in 2016 visit the US Bureau of Labor Statistics. Over there same jobs are directly compared. On the bright side, CNN money in another analysis from 2014 has found that one very bright spot is held by the pharmacists. But even the most optimistic studies, that completely adjust for any factors and ignore the fact that women can be excluded from highest position, which then results in the data being equal did not manage to get the gap equal – and on top it was in the field of software development – gender pay gap still existed around 1%.6 And we are talking about the most progressive industry in the world, in the US, an first-world country. But, even if you are prepared to take their study at a face value, you still have to wonder why are 90% of these workers men? This study does not begin to address this point, although it mentions a larger gap at executive levels.

Then there’s an article by The Nation’s Bryce Covert where it’s shown exactly that even in women’s fields, men earn more. They also quote the study where “managers were told they have the limited amount of money to give out in raises to employee with same skill and experience level, managers gave men raises that were larger than women’s“. So, it is clear that discrimination is going on.

As the Tackling the gender pay gap in the European Union specifies, Women’s skills are often undevalued, especially in occupations where they are in the majority.

This results in lower rates of pay for women. For example, physical tasks, which tend to be carried out by men, are often valued more favourably than those carried out by women. For instance, a female cashier in a supermarket earns less than a man working in the stockroom. – 2014.

(PDF)

Another study from GPI Atlantic states:

When controls are introduced for such demographic, labour market, and productivity-related characteristics as education, work experience, marital status, job tenure, job status, union status, size of firm, size of residential area, industry of employment, and occupation, the wage rate paid to a female worker in New Brunswick continues to be about 17 percent lower than that paid to a man. A similar national study conducted by Statistics Canada found this result to be 11 percent for Canada as a whole.

(PDF)

When all this data is taken into consideration, the gap still exists, however small, but it’s still there. And do not forget that things like bonuses that are more likely to be given to men have the option to increase this even further. So, adjustments only get us so far. There still exists this – as some would say “unknown” component of the gap. You might call it unknown yes, but some of it is known and it’s discrimination. By the way, the adjustments in Pay Gap can be reversely analyzed. To quote from Wikipedia:

A wide-ranging meta-analysis by Doris Weichselbaumer and Rudolf Winter-Ebmer (2005) of more than 260 published adjusted pay gap studies for over 60 countries has found that, from the 1960s to the 1990s, raw wage differentials worldwide have fallen substantially from around 65 to 30%. The bulk of this decline, however, was due to better labor market endowments of women. The 260 published estimates show that the unexplained component of the gap has not declined over time.

Wikipedia

So what this showed is that reductions in the Pay Gap are because different jobs have become more available to women, not that the “unexplained component” has gone down.

Other important things to consider

While these things are not directly related, it should be worth to consider that women do a lot more unpaid work than men. Basically, household work is unpaid and this is expected from women by the society, and women more-or-less fall into this trap, where they devote more of their time to family, household, etc., while the same is not expected from men, so they work longer hours and this is reflected in the unadjusted gap. So, if you want to reduce the unadjusted gap, both women and men should be expected to do house work or being-with-children work. This is not directly a discrimination in first-world countries, but it is kind of conventional wisdom, which we are almost unaware nowadays. If you want to read more about this and other Time poverty problems, read the Melinda Gates Annual Letter for 2016.

Another important thing to consider is that there is evidence that managers tend to think that as man is the breadwinner, it is more important for a man to get a promotion or a job (RationalWiki quoting Eurofound).

There is also evidence that women are more likely to be fired as a result of downsizing.

Conclusion

Taking everything into consideration it is clear that both unadjusted and adjusted wage gaps do exist. They might get very small, close to 1% in some areas, but they do exist. And a large number of them can only be explained with unknown factors, meaning there is some sort of discrimination going on.

Part of the conclusion is also that some women are not socialized to negotiate for a higher salary, because of their upbringing. This is possible, and the cause should be addressed. Same with the conclusion that women are poorly represented in some areas – STEM comes to mind as a prime example. This also must be analyzed. It is also possible that most of the Gender Pay Gap is not due to conscious discrimination, but also a part of men’s socializing and this is yet another problem that must be addressed. The actual conclusion is that pretending the gap doesn’t exist or that it’s entirely the fault of women themselves won’t get us anywhere. We need to be brave and as a society tackle all these problems that have been laid out. Humanity can do this.

Citations:

1. O'Brien, Sara Ashley (April 14, 2015). "78 cents on the dollar: The facts about the gender wage gap". CNN Money. New York
2. European Commission on Justice & Gender Equality – What are the causes?
3. RationalWiki, citing amptoons.com
4. Toronto Sun, from Reuters (2012)
5. Myth Busting the Pay Gap (2012)
6. Payscale.com

Sources & further reading:

1. Wikipedia
2. RationalWiki
3. The Global Gender Gap Report (PDF)
4. Gender Focus
5. Gender pay gap on European Commission Website