Why Are There So Many Different Gender Wage Gap Calculations?

Why Are There So Many Different Gender Wage Gap Calculations?

What is the correct figure for how much women are paid relative to men? Is it 80 cents to the dollar? Or is it 83 cents?

The answer, it turns out, is both: There are alternative methods for measuring the gender wage gap, and a Wednesday panel discussion at the Economic Policy Institute in Washington, D.C., focused on the myriad ways the gap shortchanges female workers. The event centered on a new EPI report entitled “What is the gender pay gap and is it real?”

“Different gender wage gaps are answers to different questions,” said EPI senior economist Elise Gould, a co-author of the report, during the discussion. “It doesn’t mean [the wage gap] is not real.” While 80 cents to the dollar reflects the median discrepancy for women working full-time, Gould said that EPI uses the 83 percent figure because it looks at per-hour wages and includes part-time workers.

In practical terms, that means that women’s median take-home pay amounts to $15.67 an hour, compared with $18.94 for men. Over the course of her lifetime, the gender pay gap costs the average woman worker more than $530,000 in lost wages. The lifetime wage losses are even greater for college-educated women, averaging close to $800,000. The wage gap reflects not just employers’ decisions to pay women less, the panelists stressed, but also institutional barriers and the work-life decisions that women make.

The gap tends to widen with education levels in part because of wage floors like the federal minimum wage, but also because women face penalties throughout their professional lives for having children or caring for family members. “Women can’t simply educate themselves out of the gender wage gap,” said Gould.

Nor can women simply choose different and higher-paying careers, agreed Wednesday’s panelists, who also included Sarita Gupta, the executive director of Jobs With Justice; Heidi Hartmann, president of the Institute for Women’s Policy Research; and Latifa Lyles, the director of the Women’s Bureau at the Department of Labor.

Occupational segregation still contributes to large pay discrepancies across similar fields, and subtle gender discrimination can inhibit women from crossing over—Hartmann cited the examples of a female machine operator who could make $13,000 more as a welder, and a library assistant who could make $24,000 more as an IT specialist. Gould also noted that as women enter a particular field in increasing numbers, the pay will often decrease as the work becomes devalued.

One of the most consistently devalued occupations is caregiving, a field dominated by women and people of color. Gupta, who is also the co-director of Caring Across Generations, emphasized the need for a better “care infrastructure” that would help both low-paid workers and women who are unpaid caregivers to family members.

In the absence of better paid leave policies for both women and men, said Lyles, “a lot of women are going to have some reason to leave the workforce” in their lifetimes, and that translates into “lost earnings that compound over a lifetime.”

Better paid leave policies would also alleviate a barrier faced by women in high-profile professions that demand longer hours. “I do believe that these long hours were created to reserve these jobs for men,” Hartmann said. Gould added that the willingness to work late is often “an incorrect signal” for productivity.

The EPI report also highlighted the uptick in economic inequality since 1980, which is what primarily accounts for any narrowing of the gender pay gap over those decades. “The stagnation and decline of median men’s wages has played a significant role in the decline in the unadjusted gender wage gap,” the report states. Also Wednesday, Gould unveiled the EPI’s gender pay gap calculator, which tells users how much money they would be making in the absence of a gender wage gap, and how much they would be making if wages had increased with economic growth, as they in the three decades after World War II. For example, a 30-year-old woman with a Bachelor’s degree and an annual salary of $40,000 would be making $44,785 in the absence of a pay gap, and $64,420 if inequality hadn’t increased.

But regardless of gender, the conclusion was the same: “Had workers’ wages continued to keep pace with productivity, both men and women would be earning much more today.”