by Heidi Hartmann, Ph.D., Barbara Gault, Ph.D., and Ariane Hegewisch
(This post is in response to Glenn Kessler’s two Pinocchio rating of “President Obama’s persistent ’77-cent’ claim” on April 9, 2014, in the Washington Post.)
Glenn Kessler presents a very one-sided discussion of the wage gap in this April 9th “Fact Checker” post in which he increased President Obama’s rating on his use of wage gap statistics from one Pinocchio (in the 2012 campaign) to two—he should have lowered it from one to zero. President Obama has correctly used a long standing data series issued every year by the Census Bureau. The 77 percent wage ratio figure is an accurate measure of the inequality in earnings between U.S. women and men who work full-time, year-round in the labor market.
Here are some other things to keep in mind about that statistic:
1) Kessler claims that President Obama uses the 77 percent wage ratio figure because it shows the biggest wage gap when other data series available from the Bureau of Labor Statistics show slightly smaller gaps. Leaving aside how Kessler could get inside the President’s head and know why he picked a certain series, everyone who writes about this issue should know that this figure based on median annual earnings is the historical headline figure that allows the longest comparison across time.
2) Kessler claims that the other series—weekly or hourly earnings—are more accurate, but there is simply no basis for saying so. The 77 percent figure actually includes the broadest range of kinds of earnings; for example annual bonus payments are a big part of remuneration in some fields and are included in the 77 percent figure, but are excluded from the weekly or hourly earnings figures.
3) In his first fact check column (posted online at 6:15 am on April 9, 2014), Kessler failed to note that other measures show a much larger gap than the 23 percent figure President Obama used. If part-time workers were included, a figure that Statistics Canada uses, the wage ratio would be 71 percent and the gap 29 percent. The United Kingdom has used life-time earnings ratios. One IWPR study found that across 15 years (ending in 1998, using the Panel Study of Income Dynamics), the typical American woman earned just 38 percent of the typical man. The Urban Institute, using Social Security earnings data, finds that the typical wife earns about 50 percent of what her husband does across their working lives. Kessler had updated his column to add mention of these other measures, but fails to alter his conclusion that the President used the biggest wage gap. In fact, the figure the President used falls in the middle of the range and is the one most commonly used for the past 60 years.
4) Kessler emphasizes that women ‘choose’ different and lower-paying college majors than men and seems to think such differences mean that the wage gap measure is not a good measure of economy-wide wage inequality. ‘Choice’ is, of course, an unverified assumption. There is considerable evidence of barriers to free choice of professions, ranging from lack of unbiased information about job prospects to actual harassment and discrimination in male dominated jobs. It is highly likely that there are many women who are freely choosing to become social workers, and are making well-informed decisions, and the same is likely to be true for men choosing to be engineers. However, there are no hard facts on how many, or indeed, how many would ‘choose’ otherwise in a world of complete information and nondiscriminatory employment. For example, in a world where half of engineers were women and half of social workers were men, men and women might ‘choose’ very differently than they do now. We do know that young women and men generally express the same range of desires regarding their future careers in terms of such values as making money and having some flexibility and autonomy at work, as well as time to spend with family members.
5) There are legal cases, as well as social science research studies, that show that, just by the mere fact of being a mother, women’s advancement opportunities shrink, and just by being a father, men’s grow. Yet, there is no proof that being a mother makes a woman less productive on the job. And why should women who may be decades past the phase of active childrearing still be suffering a wage penalty? While it is true that women typically take more time away from work for child rearing than do men, that decision often makes economic sense when a wife’s wages are lower than her husband’s—equal pay would likely lead to more equitable sharing of child rearing and to women and men working in the labor market about the same amount over their lifetimes. Research shows subsidizing the cost of child care and providing paid parental leaves of up to six months would help women and men return to work sooner. While Kessler has said the goal of his Fact Checker column is to provide needed context to what political leaders say, this is a part of the needed context he omitted entirely.
6) It is true, as Kessler notes, that when factors such as occupation and parental or marital status are used as control variables in statistical models aiming to explain what ’causes’ the wage gap, the size of that gap will be reduced, and what is left unexplained is generally thought to possibly be the result of discrimination. But it is just as likely that discrimination affects these ‘control’ variables as well as the size of the remaining gap. Unfortunately, Kessler cites only the literature that ignores the possibility of discrimination affecting the control variables. He cites economist June O’Neill, well-known in the field for her opposition to government intervention to reduce the size of the wage gap. He also cites a study commissioned by the George W. Bush administration and done by a conservative research firm, CONSAD, which Kessler “camouflages” by saying the St. Louis Federal Reserve Bank cited it. Kessler fails to cite peer reviewed literature surveys published in mainstream economics journals, including papers by Francine Blau and former Acting Secretary of Commerce Rebecca Blank and co-author Joseph G. Altonji. These latter studies estimate that 25-40 percent of the gross wage gap remains unexplained when factors reasonably thought to affect productivity are included as control variables in the models.
The 77 percent figure covers everyone working full-time, year round and does not reflect only women and men doing exactly the same job in the same firm; however, it does reflect women and men working full-time, year round not earning the same. The wage gap figure reflects a number of different factors: discrimination, lower earnings in occupations mainly done by women, and also the fact that women still tend to be the ones to take more time off work when families have children. Just because the explanation of the gender wage gap is multi-faceted does not make it a lie.
We should note that on occasion, many politicians—including U.S. presidents—journalists, and others present the 77 percent figure as comparing men and women who do the same jobs, and this unfortunate tendency has led to great confusion. But President Obama was careful in both his recent State of the Union speech and his Equal Pay Day speech to use the figure without that inaccurate qualifier. In his 2008 campaign, his literature often used the phrase ‘unequal pay for an equal day’s work’—that phrase is an accurate way to refer to men and women who both work full-time earning different pay.
Heidi Hartmann, Ph.D., is a MacArthur Fellow and the president and founder of the Institute for Women’s Policy Research.
Barbara Gault, Ph.D., is the vice president and executive director of the Institute for Women’s Policy Research.
Ariane Hegewisch is a study director at the Institute for Women’s Policy Research.
To view more of IWPR’s research, visit IWPR.org