Is the Gender Pay Gap Real?

Gender Pay Gap

While it’s universally acknowledged women are paid less than men, there are a number of differing thoughts on why it happens. What’s more, some pundits have stated that doesn’t necessarily mean the gender pay gap really exists.

So, where does the truth lie?

Is the gender pay gap real?

Let’s take a look.

What is the Gender Pay Gap?

Simply put, the gender pay gap is the difference in pay between women and men. While there are many different ways to calculate the disparity, there does appear to be unanimity. Women are largely paid less than men.

Moreover, women of color experience an even broader gulf in compensation for their work. According to Census Bureau statistics, women earn on average 18 cents less than men. However, when broken down by ethnicity, it’s an average of 10 cents less for Asian women, 21 cents less for Caucasian women, 38 cents less for African American women, 43 cents for Indigenous women and 46 cents for Latinas.

However, some say looking at the numbers alone misses the point.

Why is it Disputed?

In a 2016 article for Forbes entitled, Don’t Buy into the Gender Gap Myth, Karin Agness Lips asserted the notion of the gender pay gap was nothing more than statistical manipulation designed to convince women they’re being victimized by discrimination.

She said the data fails to account for the different choices men and women make in terms of education and experience, as well as the number of hours worked by each gender.

To bolster her position, Ms. Lips quoted author Hanna Rosin as having stated the fact that statistics show women’s earnings are a certain percentage less than men’s, does not mean they are making a corresponding amount less for doing the same work. One must be careful to perform exact comparisons, lest the result be skewed.

On the Other Hand

Four years later, also in Forbes, in an article entitled On Equal Pay Day, What Is The Real Gender Pay Gap? Kim Elesser said while those choices do matter, that logic doesn’t hold up. Ms. Elesser’s position is that such comparisons ignore the role societal gender bias plays in women’s career choices, promotions and childcare.

In other words, simply running the numbers and saying, “it’s because men and women do different work,” fails to take into account the differences in opportunities for men and women. These can constrain the choices women can make before they ever negotiate a salary offer with an employer.

She says the only true way to accurately measure is to run a gender pay gap analysis in which an organization’s average male worker’s salary is measured against the average female’s. Where there is a discrepancy, there is also the likelihood of bias.

So, Who’s Right?

Whatever the cause, the gender pay gap is very real.

Moreover, it affects us all in a number of different ways. In households in which women are the sole breadwinner, or contribute significantly to the household income, the likelihood of poverty is greater because women are paid less. In fact, 56 percent of children living in poverty live in households headed by women.

When it comes to Social Security benefits, the pay gap means women receive lower payments each month. It also means they had less money to put toward retirement plans, so their post-career choices are often more restrictive than those of their male counterparts. As a result, more than twice as many women over the age of 65 live in poverty than men.

One more thing, closing the gender pay gap would add some $512 billion to the nation’s GDP.

So yes, the gender pay gap is very real — and we all suffer because of it.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.