In America, Women and Men Earn Equal Pay for Equal Work

By James D. Agresti
April 10, 2018

Certain media outlets are giving fawning coverage to “Equal Pay Day,” a “public awareness event” invented by the National Committee on Pay Equity to “illustrate the gap between men’s and women’s wages.” This group claims that women earn much less than men because of “discrimination.”

Parroting that storyline, NBC News published an article entitled “What Is Equal Pay Day? Here’s Everything You Need to Know.” Penned by Shira Tarlo, this article states that:

• women make “77 cents for every dollar that men earn.”
• Republican Senators and Donald Trump have blocked measures to solve this problem.
• “Equal Pay Day is a reminder that despite some progress, the wage gap persists, and women have ways to go when it comes to economic equality.”

Likewise, Brett Molina of USA Today reports: “On average, women are paid about 80% of what men are paid. To reach pay parity, women will have to wait until 2119, according to AAUW [American Association of University Women]. If you are a woman of color, that gap is even wider.”

Many other journalists, activists, celebrities, and politicians are making similar claims, but the facts are clear that women in the United States earn the same compensation as men for doing the same work. On average, full-time, year-round female workers earn about 20% less cash wages than males, but when four factors relating to equal work and pay are taken in account, all or nearly all of this gap disappears. These four factors are:

• Full-time male workers average 6% more workdays per year and 5% more workhours per workday than full-time female workers.
• Males typically have more work experience and are more likely to pursue technically demanding and higher-paying careers, such as computer science and finance.
• More than 28% of U.S. workers are in physically challenging occupations (like construction), and most men have considerably more muscular strength than most women.
• Women are more apt to take jobs that offer higher fringe benefits in exchange for less cash wages.

Various studies that have attempted to account for some—but not all—of these factors have found:

• “Once we control for outside factors the wage gap between men and women shrinks considerably. Now women earn typical pay that is on average 98% of the typical pay for men by major. Occasionally, women may even earn more. Therefore, when looking at gender-specific pay by major for a controlled sample, the wage gap all but disappears.”
  – PayScale, 2009
• “[A]fter we controlled for all the factors included in our analysis that we found to affect earnings, college-educated women working full time earned an unexplained 7 percent less than their male peers did one year out of college.”
  – American Association of University Women, 2012
• “Our analysis of the gender pay gap is the first to include fringe benefits in a comprehensive measure of compensation for men and women. The results show that including fringe benefits makes a considerable difference in the analysis of earnings differentials. In fact, we conclude that any measure of earnings that excludes fringe benefits may produce misleading results as to the existence, magnitude, consequence, and source of market discrimination. For our sample of working men and women between the ages of 26 and 34 in 1990, the average female wage rate was 87.4% of the average male wage rate; but when an index of total compensation is used, the estimate rises to 96.4% of male compensation.”
  – Industrial Labor Relations Review, 1995

Per a 2009 analysis of gender wage studies conducted for the U.S. Department of Labor by CONSAD Research Corporation:

It is not possible to produce a reliable quantitative estimate of the aggregate portion of the raw gender wage gap for which the explanatory factors that have been identified account. Nevertheless, it can confidently be concluded that, collectively, those factors account for a major portion and, possibly, almost all of the raw gender wage gap.

Deceiving the Public

The National Committee on Pay Equity asserts that a 2003 study by U.S. General Accounting Office “found a 20 percent earnings gap between women and men that could not be explained, even when accounting for demographic and work-related factors such as occupation, industry, race, marital status and job tenure. This gap is attributable to discrimination; certain jobs pay less simply because they are held by women and people of color.” To the contrary, this study explicitly states:

Due to inherent limitations in the survey data and in statistical analysis, we cannot determine whether this remaining [wage] difference is due to discrimination or other factors that may affect earnings. For example, some experts said that some women trade off career advancement or higher earnings for a job that offers flexibility to manage work and family responsibilities.

The study goes on to detail that it does not account for:

• “fringe benefits—most importantly, health insurance and pension coverage.”
• “job characteristics such as flexibility that men and women may value differently.”
• “education quality or field of study, such as college major.”
• “cognitive ability or measures of social skills, all of which may affect earnings.”

The National Committee on Pay Equity does not even link to this study, which is unsurprising given how it distorts it. Yet, instead of exposing this deception, many media outlets are serving as mouthpieces to amplify it.

Stirring Up Racial Strife

The same reporters and media outlets are also echoing the rhetoric of the National Committee on Pay Equity about wages and race. For example, NBC News claims: “While women across all races and ethnicities lag behind those of white men, as well as men in their own racial or ethnic group, minority women face greater challenges in this regard. Data from a 2016 study illustrates that while white, non-Hispanic women make 83 cents for every dollar, Black women make 66 cents, and Hispanic women make 60 cents.”

Just as with gender, the facts are clear that people of all races in the United States earn the same compensation for doing the same work. Racial wage gaps can be traced to differences in work output due to factors like education, marriage, career choices, English fluency, and skills in reading, writing and math.

People who falsely claim that discrimination is the cause of wage differences can stir up racial strife by fueling resentment and bitterness. Gallup polls conducted from 2001 to 2016 found that both blacks and whites felt that racial harmony reached an all-time modern low in 2015 and 2016.

Holding People Down

Another effect of false discrimination allegations is that they cultivate a victim mentality that prevents people from reaching their potential. A 2015 paper in the Proceedings of the National Academy of Sciences investigated people’s views about freewill, or “the belief that they are responsible for their actions.” The study found that:

• “freewill beliefs are intricately linked to basic motor processes critical to effective self-control.”
• “discouraging a belief in freewill decreases activation in brain regions associated with intentional—and arguably goal-directed—action.”
• “belief in freewill appears critical to individuals’ ability to overcome the temptation to engage in self-detrimental and antisocial behavior.”
• “hallmark indicators of self-control are the abilities for individuals to regulate their attention and to persist at challenging tasks.”

In sum, the facts show that much rhetoric surrounding Equal Pay Day slanders employers who have done no wrong, stokes gender and racial hostility, and hinders people from being successful.