Gender wage gap (Men are Paid Higher Wages)


43 years ago, President Kennedy signed the Equal Pay Act into law,
making it illegal to pay men and
women employed in the same
establishment different wages for substantially equal work.

At that
time, the ratio of women's to men's average pay was about 58%.
Although the gap in average pay between men and women has decreased
since then, the gender gap in pay persists. Decreases in labor
market discrimination towards women may be partly responsible for
these improvements, but continued discrimination may also
contribute to the prevalence of the earnings gap.
The long-standing differences in the average pay of men and
women in the labor market are the result of many forces, including
differences in the positive attributes that men and women bring to
their
jobs, differences in the
characteristics of the jobs in which men and women work, (such
as average labor market experience, industry, and Union Status)
and discriminatory treatment of women by employers and
co-workers.

All of these factors interact in different ways,
making it difficult to determine how much of the difference in
female/male pay is due to discrimination and how much is due to
various choices and preferences by female workers. For example,
if women have less experience than men, they may choose
occupations where extensive experience is not necessary. If
women consistently choose different types of jobs than men,
stereotypes about women's abilities may be reinforced and
discriminatory behavior by employers may be perpetuated. If
employers make it difficult for women to enter certain
occupations, women's incentives to invest in training for those
certain jobs may be reduced.

(It becomes a cycle)
Women and men differ, both in terms of the jobs in which they
work and in their responsibilities for children (which affect work
at home and outside the home). Nevertheless, over time, women's
skills have become more similar to men's. The occupations and
industries in which men and women work have also become more
similar. But, there still are large differences between men and
women in their personal lives and the work force that influence our
wages.

And even when all of these differences are taken into
account, there still remains a significant gender wage gap. This
suggests that there is continuing discrimination against women in
the labor market.
This is a chart depicting the United States gender wage gaps
within ethnicity. These are the wages of women 15 years &
older, fulltime, year round median annual earnings as a percentage
similar to men's annual earnings from 1988 to 2001.

This graph
shows that the race of the employee does not matter, women still
make significantly less than their male counterparts in every
ethnicity. And also a surprising fact is that White women have the
largest gap in earnings to their male counter parts, once again
showing this is not a "race" issue, it is a gender issue.

The amount of hours women work can also be considered as a
contribution to the gender wage gap; however statistics show that
when women increase their work hours, the wage gap increases. The
U.

S. Bureau of Labor Statistics reports that the average person
working 45 hours per week earns 44% more than someone who works 40
hours. This leads many to believe that if women increase the hours
they work weekly, the wage gap would decline. However other
statistics from the Bureau of Labor dispute this argument.

Women
working 41 to 44 hours per week earn 84.6% of what men working
similar hours earn and women that increase their work load by
working more then 60 hours per week earn only 78.3% of what men in
the same time earn. Therefore, by women increasing their work hours
by 20 hours per week, the wage gap is increased by 6%.


Family status and the presence of children also contributes to
the influence of amount women get paid. The relationship between
family status and pay is different for men and women. While married
men, most of whom have children, typically earn more in the labor
market than unmarried men, for women the relationship is reversed.
Children are associated with lower wages for women but not for men,
in part because children tend to reduce women's work experience and
time with their employer.

The pay premium for married men appears
to have shrunk during the 1980s and 1990s. However,
trends in earnings differences
between mothers and women without children are less clear. Out
of all women, gains in average pay over the last three decades
have been greatest for married women with children. These
married mothers may have been able to excel in the work force do
to the increase of help with the children from their husbands.


Unmarried mothers have the lowest wage gain. There is also
evidence that for younger women, the wage gains for mothers were
much less than for non-mothers.
Another influence in the wage gap would be the type of
occupations that women and men are employed in. Men and women tend
to work in different occupations.

And wages differ substantially
according to the gender composition of the occupation. In
particular, men and women who work in predominantly female
occupations (Pink Collard) earn less than comparable workers in
other occupations.
Women have increasingly moved into traditionally male
occupations. Between 1983 and 1997, the proportion of employed
women who worked in managerial and professional occupations
increased from 23 to 32 percent, while the proportion of men in
these occupations rose only from 26 to 29 percent.

But women are
still much more likely to work in service and clerical jobs than
men, while men remain more likely to be in blue collar jobs.
The presence of unions are some what influential in the
persistence of the gender wage gap. Union membership is estimated
to boost wages of union members relative to non-union members by 10
to 20 percent. Men have traditionally been more likely to be union
members than women, which helped increase the gender pay gap.

The
decline over the last 25 years in the fraction of the workforce
that is unionized has raised women's relative pay as fewer men
receive union wages. In addition, the share of unionized workers
who are female has increased as unions have grown in certain public
sector and service-related occupations that have a greater share of
female workers. These female union members have benefited from
higher union wages. But, overall, the decline of unions has had a
relatively small role in the declining gender pay gap; by itself,
it would have caused the gender pay gap to decline by about one
percentage point over the 1980s and 1990s.


Over the years there have been significant changes in the wage
structures. Two major trends have worked to widen the gender gap;
increases in the pay premium associated with higher "skills" like
higher levels of education and labor market experience, and
increased pay differences across industries and occupations. This
has served to widen the gender gap because female workers continue
to have less labor market experience, on average, than male
workers, and are, on average, in lower-paying occupations. The
rising wage inequality and increasing economic returns to skills
slowed women's progress.


DISCRIMINATION
Gender discrimination may take a variety of forms, from
practices that reduce the chances that a woman is hired to
differences in pay for men and women who work side by side doing
the same tasks equally well. There are a variety of theories about
how and why women face discrimination in the labor market. An
employer may dislike female employees or underestimate their
abilities; customers may dislike female employees or underestimate
their abilities; or male co-workers may resist working with women.
These attitudes may not be directed toward all workers but may only
focus on women in higher status occupations.

For instance, male
employees may not object to having women work for them but may
object when women are their superiors. In addition, employers may
engage in what is called "statistical discrimination," meaning that
they assume an individual woman has the average characteristics of
all women. For example, because women on average have higher
turnover rates than men, an employer may assume that a given female
job candidate is more likely to leave the firm than a similar male
candidate. Statistical discrimination, like other forms of
discrimination, is illegal.

An employer is required to base hiring
or pay decisions on specific information about an individual, not
on presumptions based on gender.
The unexplained portion of the gender gap
Although the gender gap has narrowed since the late 1970s, at 25
percent it is still substantial (see figure 1). And as late as the
1980s, the date of the most recent detailed longitudinal study, a
gender pay differential of about 12 percent remained unexplained
even after adjustments for gender differences in education, labor
market experience, broad occupational and industrial distributions,
and union status. According to this study, the gender pay gap ratio
in 1988 was 72 percent.

Women's lower full-time experience
explained roughly one-third of the pay gap, and gender differences
in industry, occupation, and union status explained about 28
percent of the pay gap. This left about a 12 percentage point pay
gap unexplained. This unexplained differential, after adjustments,
declined by half over the 1980s, from about 22 percentage points to
about 12 percentage points. This decline alone would have reduced
the gender gap by about 10 percentage points.


The unexplained portion of the pay gap is often interpreted as
the result of discrimination. In this view, once differences
between men and women in the relevant determinants of wages are
taken into account, any remaining difference in pay must be due to
discrimination. But this explanation may be too simplistic. To the
extent that discrimination affects women's educational, job, and
family choices, the "unexplained" differential will understate the
true effect of discrimination.

And, to the extent that an analyst
cannot adequately measure all the determinants of wages using
available data, there may be significant unmeasured labor market
skills that differ between men and women. For instance, if women's
labor market experience is less likely to be continuous (for
example, due to childbearing), then just controlling for years of
work may not fully control for the differential effects of
experience on male and female wages. In this case, the
"unexplained" differential will overstate the true effect of
discrimination, because it includes the effect of relevant
unmeasured factors that influence the relative productivity of male
and female employees.
The decline in the "unexplained" portion of the pay gap over the
1980s could either be due to a relative improvement in women's
unmeasured labor market skills or a decline in discrimination.

Both
explanations are plausible. Women's unmeasured skills may have
improved relative to men's over the 1980s. (For instance, women
have entered elite private universities -- many of which were
closed to women before the mid-1970s -- at an increasing rate in
recent decades, perhaps increasing the quality of their schooling.)
But reductions in discrimination may also have played a role in
reducing the "unexplained" difference between men's and women's
wages.

For example, as women increased their commitment to the
labor force and improved their job skills, statistical
discrimination against them may have diminished. In addition,
reduced discrimination could also have contributed to the decline
in the explained portion of the pay gap if earlier
anti-discrimination efforts encouraged women to invest more in
labor market skills and to move into traditionally male
occupations.
Importance of ending the gender wage gap
Working families in the US lose around $200,000 Billion in
income each year due to the wage differential between men and
women. This is an average of more than $4,000 each for working
women's families, taking into account differences in education,
age, location and number of hours worked.


If married women were as much as men, their family incomes would
rise by almost 6%, and their family poverty rates among them would
drop form 2.1% to .8%
If working mothers earned as much as men, their income would
increase 17% and the poverty rate among them would change from
25.3% to 12.

6%
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