Last week, President Obama announced an Executive Order and a Presidential Memorandum aimed at addressing the gender wage gap that persists in the United States workforce. President Obama also encouraged Congress to pass the Paycheck Fairness Act, a bill he feels is crucial for efforts to close the wage gap. President Obama cites U.S. Census statistics that demonstrate, “On average full-time working women still earn 77 cents to every dollar earned by men.” The White House attributes this difference to gender discrimination, and thus, the Paycheck Fairness Act will attempt to recognize and attack discrimination and thereby ensure “equal pay for equal work.” However, evidence clearly demonstrates the basis for the President’s actions is inherently flawed and therefore has provoked a response from the White House that, at best, demonstrates misguided policy, and, at worst, reflects policy that will work contrary to its stated goals. The claim that full-time female employees make 77 cents to every dollar earned by full-time working males, attributable to only gender discrimination is false. First, the statistic does not accurately define “full time.” Men are almost twice as likely as women to work more than 40 hours a week, and women are almost twice as likely to work between 35 and 39 hours a week. When controlling for hours per week, female employees earn 88 cents to every dollar a male employee earns. While a fair definition of “full time” closes 11 cents of the gender pay gap, it obviously does not eliminate it. However, further evidence suggests that a number of others factors are most likely the cause of the additional 12-cent pay gap. These factors can be grouped in two categories: career choices and family considerations. This first can help to explain why young women make less than men when first entering the work force (93 cents to every dollar, according to the Pew Research Center), and the second can explain why the overall pay gap rests at the 88 cent figure described above. On average, women tailor their education to fields that are less prosperous in the market than men. Women are more likely to major in a field with lower starting salary prospects, like education or liberal arts studies. In contrast, men are more likely to major in fields with higher starting salary prospects, like law or finance. Men are also much more likely to enter into dangerous occupations, which, by nature of the added risk, raises salary earnings. These two factors present a logical basis for the initial seven-cent differential in earnings when women enter the workforce. Marriage and family considerations can then help explain the remaining income gap between men and women over the course of their careers. Women are much more likely than men to interrupt their career for family considerations, including reductions in work hours and significant time off. Further, women are more likely to turn down a promotion in order to care for their families. These interruptions, on average, limit a woman’s earning potential and career advancement. The fact that single women without children — the best way to “control” for family or marriage considerations ⎯ earn 96 percent of men’s earnings helps exemplify this notion. Despite the evidence above, gender discrimination most likely contributes to this pay gap as well. However, most evidence indicates that the difference is very small and difficult to attribute to a general societal trend of discrimination. Though I agree that this form of discrimination is unacceptable, it does not warrant new legislative action, as both the Equal Employment Opportunity Commission and the Office of Federal Contract Compliance are tasked with fighting labor market discrimination. While a gender wage gap does exist, it seems clear that it is primarily attributable to factors other than gender discrimination and more likely reflects a woman’s individual choice in education, career path and family considerations. This recent attempt by the White House to “attack” gender discrimination in the workforce is both misguided and potentially even harmful to securing a better work environment for women. Many experts have pointed to the detrimental components of the Paycheck Fairness Act, as it limits an employer’s ability to respond to the demands and needs of employees. These demands include merit pay considerations and flexibility for working mothers. Women still face a number of hurdles and challenges in the workforce that should be addressed, but the Paycheck Fairness Act does not appropriately address these challenges. Attacking a problem that is based on misleading statistics and is already being addressed by two federal agencies is a poor allocation of government resources and more importantly, does not promote a more equal workforce for female employees.
