Discrimination and Gender Wage Gap

“We’d all like to think, in 2012, that pay discrimination is a thing of the past,” the progressive activist Joy Lawson wrote in the Huffington Post recently. “But the pay gap still exists, and it’s big: women earn an average of 77 cents on a man’s dollar.”

The pay gap is exaggerated, discrimination doesn’t drive it and it’s not clear that government can eliminate it — or should even try.

Problematic Stats

Conservative economist Diana Furchtgott-Roth runs through the problems with the statistic in her book on the economic progress of women, “Women’s Figures.” She points out that part of the gap reflects the fact that women, on average, work fewer hours than men. Among people who work 40 hours a week, according to the Labor Department, women make 87 percent of what men do.

Furchtgott-Roth cites a 2005 study by economists June O’Neill and Dave O’Neill, which found that for the most part “the gender gap is attributable to choices made by women concerning the amount of time and energy to devote to a career.” They continue: “There is no gender gap in wages among men and women with similar family roles.”

In addition to being more likely to seek part-time work, women are also more likely to have gaps in their employment history and to enter lower-paying fields. The consulting company Consad, in a 2009 report for the Labor Department, found that these factors account for most of the pay gap. Correct for them, and men make only 5 percent to 7 percent more than women for the same work.

Even the American Association of University Women, in a recent report playing up the pay gap, conceded that 5 percent is a reasonable estimate of the difference between men’s and women’s wages that cannot be explained by choice of occupation, employment history and the like.

Not even that smaller gap can be attributed wholly to employer discrimination. Lawson, although she favors “legislative solutions,” also writes that women are less likely than men to drive hard bargains in salary negotiations. If true, that would explain part of the gap, as well…

via Don’t Blame Discrimination for Gender Wage Gap – Bloomberg.

Related Article @ Are men and women really all that different?