April 16, 2007

An "old wives tale"

Kathleen Jacobs in today's News Journal states in an op-ed the following:

According to the U. S. Census Bureau's statistics for 2006, women earned 77 cents for each dollar comparable to what a male worker earned across all occupational paths.

I have heard this statistic thrown about quite often (usually it's 75 cents to the dollar, or "3/4 of what men make"). I also was once booed and heckled in a grad class full of all females (yep, I was the only male -- damn ed. classes!) when I stated that the figure is misleading since it doesn't compare equal pay for equal work, as Jacobs mentions earlier in her article today. What the figure does do is "compare the median income of a full-time working (outside-the-home) woman to that of a full-time working man."

Unfortunately, this ignores more than it reveals. Important factors including occupation, number of years and hours worked, and education arenít taken into account. Moreover, on average, women tend to make lifestyle choices that lead to lower earnings than men. (Link.)

Indeed. And as Shawn Ritenour writes in the Mises Institute monthly The Free Market,

Indeed, when the data are broken down, this is what one finds. Don't compare the "average" man and the "average" woman; compare men and women of similar ages, education, major fields of study, occupation, and marital status. The so-called "earnings gap" shrinks dramatically. Even the government admits that, statistically, only one-third of the 24-cent pay gap is "unexplained" by the above mentioned factors.

In other words, only an 8-cent difference is unexplained. Of course, this 8-cent "unexplained" pay difference is written off by the administration as sexual discrimination. It never occurs to them (they do not want it to) that the remaining perceived 8-cent pay gap for similar-appearing men and women is due to things that are immeasurable.

What they should know, however, is that there are good reasons why the "average" woman earns less than the "average" man, almost all of which are connected to the fact that a woman's primary concern tends to be her family. The big difference between men and women is how they react to marriage and child-birth. Marriage tends to increase men's participation in the labor force and decrease women's. The hours men work tend to increase with the birth of a child. Hours that women work tend to decrease when a child is born. Mothers tend to work less overtime and take fewer jobs requiring them to work long hours in return for high pay than fathers do.

Marriage and child rearing contribute to a number of choices that women make that place them on a lower earning trajectory over time. Women have higher turnover rates and fewer continuous years on a single job than men do. More women work part-time jobs than men do, so they can devote time to the family. They also have a higher absence rate than men. Further, women tend to take those occupations where an absence of five to six years to raise a pre-schooler will not make them obsolete.

Emphasis mine. Why couldn't Ms. Jacobs make any mention of these tidbits in her op-ed instead of just repeating an old and totally misleading statistic? Who knows. Look, I am certain there is sex discrimination out there. But to speak as if there has been virtually no progress in this realm is plain silly. This belief leads to advocation for things like the Fair Pay Act which features nebulous language mandating equal pay NOT for identical but "similar" jobs, and not equal educational background but "comparable." I guess it's what we should expect from that belief. I haven't read the actual bill, only Jacob's description of it in her op-ed, but that's an eye-roller all by itself. I can just imagine the overly verbose [typical government] bill and how that would be interpreted by zealous government attorneys anxious to "prove" discrimination.

Posted by Hube at April 16, 2007 09:10 PM | TrackBack

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