Jonathan H. Todd

Finance, Investing, Economics

The Myth of the “Wage Gap Myth”

The opening line of the Wall Street Journal op/ed “The ‘Wage Gap Myth’ That Won’t Die” yesterday reads, “When it comes to economically foolish laws, California is second to none.” Fine, and the author, Sarah Ketterer, goes on to cite plenty of statistics that show that the wage gap is essentially non-existent.

Except, it is still very much existent, and in danger of getting much worse.

Ketterer has two main theses:

First, that equalizing hours worked, women earn as much as men.

Second, women self-select to lower-paying careers.

The myth of the myth of the wage gap

Let’s start with this: many higher-paying careers, like those in finance and IT, require working more hours.

We know that women work fewer hours, thus earning lower weekly wages, and women have narrowed the earnings gap over the past several years. But we also know that much of this is due to the fact that typically male-dominated industries, that are more physically demanding, will be (have been) the first to be replaced by automation, which has pushed down wages and hours for males.

With that, the remaining industries that require a high number of hours worked are going to be higher wage jobs, such as those in STEM. Women are woefully underrepresented in STEM-related industries, even though women a) score as high, if not higher, as men in math and science testing, and b) women graduate from college at a higher rate than men.

This seems to be more of a cultural problem in these industries than anything (and this is hardly an American phenomenon).

If women are somehow discouraged from learning the skills or taking jobs as web developers, statisticians, or chemical engineers, even if they are more prepared than men to go into these industries, that’s a big problem. If this were indeed the case (which it seems to be), women aren’t self-selecting into lower-paying industries. Industries are self-selecting those within it.

And unless this is somehow checked, this is only going to become a bigger issue. The Bureau of Labor Statistics estimates that STEM-related jobs are going to grow 13% between 2012 and 2022, faster than the 11% growth of all jobs. The median wage in STEM industries is also more than double the national median wage.

If this current trend continues, there will be two effects: first, the wage gap for women in these professional industries will only widen, and second, we’ll effectively be constraining the number of qualified workers in these key growth industries.

There are a lot of problems with the current structure of labor markets for women. A persistent women’s wage gap is bad enough. Letting it become a national productivity and industrial potential crisis is worse.

4 Comments

  1. Considering the stark contrast between single females without children and married females with children the vast majority of the wage gap lies bare.

    Further, the highest earners, married men, cover the income disparity so clearly defined when the above unaccounted discrepancy is considered. If a couple splits the income of a single predominant earner, then isn’t it clear the non earner is benefiting without account?

    One is then prompted to ask: “What is the income distribution gap?” Given that question it becomes obvious women are the primary beneficiaries of the male wage both through government benefits and private exchange.

  2. Married women shouldn’t care about the wage gap, because their spouses are the highest earners? No.

    • Exactly! It really annoys me that people put forward the argument that it’s ok to have the wage gap because we can identify the factors that contribute to the wage gap!!!!??? WHAT????

      Controlling for variables DOESN’T make it ok. We have to change the system so that women have the OPPORTUNITY to work longer hours at the office rather than at home and therefore be able to catch up… That’s the argument that is being made.

      The idea that we can ignore the wage gap because once you control for hours worked and time away for maternity leave is ludicrous. The problem still exists. So how do we fix it?????

      • Thanks for the comment, Laura.

        Totally agree with you, and I wish I had a fix. I think there are plenty of options that would certainly begin to attack the problem (UBI, better employee protections, and getting more companies to adopt better policies – which is a complete prisoner’s dilemma), but don’t think they’re exactly politically palatable – at least here in the US.

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