The Equal Pay Day 20% Pay Gap Myth

Hans Bader
By Hans Bader | April 2, 2019 | 4:35 PM EDT

Then House Minority Leader Nancy Pelosi (D-CA) (R) speaks during a news conference to mark Equal Pay Day and urging Congress to pass the Paycheck Fairness Act, on Capitol Hill, April 8, 2014. (Photo by Drew Angerer/Getty Images)

Today is Equal Pay Day. That means it’s time for people to peddle myths about what women are paid for doing the same job as a man.

Many of those who promote Equal Pay Day cite a misleading statistic that the average woman makes 20 percent less than the average man. But this statistic compares women to men even if they are in completely different jobs. And it doesn’t take into account the number of hours worked — while the statistic is for full-time employees, male full-time employees work more hours on average than women do, thanks to overtime and other factors. Nor does it take into account fringe benefits.

Yet those touting Equal Pay Day make it sound as if the 20 percent statistic compared men and women in the same job performing “equal work.” The National Center for Pay Equity claims that women receive 20 percent lower pay on average for doing the same work as men. Similarly, at Forbes, Claire Zillman writes that “the reality of women’s unequal pay for equal work—remains. The gender pay gap … now hovers in the 20% range.” Zillman cites this 20 percent gap to argue that a new federal law governing employee pay needs to be passed, known as the Paycheck Fairness Act. Other laws, such as the Equal Pay Act and the 1964 Civil Rights Act, already ban paying women less than men when they do equal work. But on March 27, the House of Representatives passed the Paycheck Fairness Act, on a largely party-line vote.

But these claims are misleading. A key reason women earn less than men on average is that women work fewer hours on average than men even when they work full-time. As Washington Post fact-checker Glenn Kessler noted in 2013, government data shows women work fewer hours than men, which explains much of the apparent pay gap: “since women in general work fewer hours than men in a year, the [pay gap] statistics used [to push for passage of the proposed Paycheck Fairness Act] may be less reliable for examining the key focus of the legislation — wage discrimination.”

Similarly, Ramesh Ponnuru noted at Bloomberg News that the pay gap between men and women “reflects the fact that women, on average, work fewer hours than men.” Family responsibilities also play a role. Economist Diana Furchtgott-Roth cites a 2005 study which found that “There is no gender gap in wages among men and women with similar family roles.” In addition to being more likely to seek part-time work, women are also more likely to have gaps in their employment history and to enter lower-paying fields, she notes, and “a 2009 report for the Labor Department, found that these factors account for most of the pay gap.”

The 20 percent statistic also doesn’t take into account fringe benefits. Women have, on average, better fringe benefits than men. As Furchtgott-Roth notes, if you control for hours worked and fringe benefits, most of the wage gap disappears.

It’s obvious that employers don’t pay women 20 percent less for the same work. If they did, employers could (and some would) crush their competitors just by hiring only women, who cost less to employ, to reap a huge cost advantage. But no major employer has ever done so. As one commenter notes, if this massive pay disparity actually existed, “why wouldn’t any company seeking to enhance its competitive position (i.e., all of them)  simply hire only women? After all, such a company could offer, say, 90 cents and attract untold numbers of female applicants for employment and still have a distinct advantage in the cost of its labor.” The supposed 20 percent pay disparity is vastly bigger than the profit margin of most major companies.

Misconceptions about the wage gap between men and women are driving support for the Paycheck Fairness Act, which could require equal pay for unequal work in some cases. In 2009, an unnecessary law called the Lilly Ledbetter Fair Pay Act was enacted based on false claims about the facts and ruling contained in a Supreme Court decision dealing with pay discrimination (the Ledbetter Act extended the statute of limitations for suing over pay discrimination, under one of the existing laws banning pay discrimination, Title VII of the Civil Rights Act of 1964. It was unnecessary because another law, the Equal Pay Act, already had a longer deadline for suing, that gave women plenty of time to sue over pay discrimination. Lilly Ledbetter lost her lawsuit because she argued her pay discrimination claim under the law with the shortest deadline for suing.).

Supporters of the Paycheck Fairness Act tend to assume that pay disparities are the result of gender bias. But many disparities reflect the fact that men and women often choose very different lines of work, with men disproportionately represented in some of the nastiest and most dangerous jobs. According to the federal Bureau of Labor Statistics, 92 percent of all workers who die on the job are men. As Steve Tobak noted at CBS News,

Men are far more likely to choose careers that are more dangerous, so they naturally pay more. Top 10 most dangerous jobs (from the U.S. Bureau of Labor Statistics): Fishers, loggers, aircraft pilots, farmers and ranchers, roofers, iron and steel workers, refuse and recyclable material collectors, industrial machinery installation and repair, truck drivers, construction laborers. They’re all male-dominated jobs. … Men are far more likely to take work in uncomfortable, isolated and undesirable locations that pay more. Men work longer hours than women do. The average fulltime working man works six hours per week or 15 percent longer than the average full-time working woman.”

Hans Bader practices law in Washington, D.C. After studying economics and history at the University of Virginia and law at Harvard, he practiced civil-rights, international-trade, and constitutional law. He also once worked in the Education Department.

Editor's Note: This piece was originally published by Liberty Unyielding and was reprinted with permission from the author.

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