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AEIdeas



Here’s Tim Worstall writing in Forbes today (“Facebook’s Sheryl Sandberg Wrong Here – Just Paying Women More Won’t Close Gender Pay Gap“), emphasis added:

The idea that we can close the gender pay gap just by paying women more seems reasonable enough, as Facebook’s Sheryl Sandberg (pictured above) has intimated on BBC radio. Sadly though this isn’t in fact the correct answer. The gender pay gap does not exist because men and women are paid less for the same jobs, it exists because men and women tend to do slightly different jobs. When equal jobs being done out there is reached then we will have gender pay parity. Because, as before, we already have the same pay for the same job. This thus is wrong, or at best an incomplete understanding of the issue: Fairer pay for women must be backed up by stronger policies at work, according to Facebook’s Sheryl Sandberg. But the firm’s chief operating officer, in an interview for BBC Radio 4’s Desert Island Discs, said the first step is to “start paying women well.” That’s rather to put the cart before the horse for the company of course. Why would anyone just want to have to pay more wages? But it’s also to miss the actual construction of the gender pay gap itself. It simply is not that a woman and a man doing exactly the same job get different pay because of their genders. Quite apart from anything else that is illegal and in a society as litigious as ours if it were happening on any scale we’d never be able to use the courts for anything else. Half the legal profession would be taking such cases on contingency fees. What does happen is that men and women slightly end up doing different jobs and more than that there’s a large difference in the number who climb the greasy pole to the top. It isn’t that, say, female senior managers are paid less than male senior managers it’s that there are fewer female senior managers than male. This hugely skews those average figures like the 77 cents per dollar that are bandied about. Sandberg, the chief operating officer of Facebook, told BBC Radio 4’s Desert Island Discs on Sunday she believed job openings should be contested by equal numbers of women and men. “We need to start paying women well and we need the public and the corporate policy to get there,” she said. “Certainly, women applying for jobs at the same rate as men, women running for office at the same rate as men, that has got to be part of the answer.” The other half of that proposal is absolutely correct given the above analysis. As and when there are equal numbers of each gender doing the same sorts of jobs to the same sort of level then there will be no gender pay gap.

MP: It’s an important, but overlooked point that there really is no gender wage gap, rather, there’s a gender earnings gap and that pay gap has almost nothing to do with gender discrimination. That is, there is almost no evidence that men and women working in the same position with the same background, education and qualifications are paid differently. Whether it’s the Target Corporation, Facebook, the University of Virginia, the United Way, the White House or McDonald’s, there is almost no evidence that any of those organizations have two pay scales: one for men (at a higher wage) and one for women (at a lower wage). Of course, that would be illegal, and if that practice existed, organizations would be exposed to legal action and “half the legal profession would be taking such cases on contingency fees” as Tim points out.

What certainly does exist is a well-documented gender earnings gap when the unadjusted median earnings of men and women are compared without correcting for any of the dozens of relevant factors that explain the natural differences in earnings by gender. For example, it’s been a verifiable statistical fact that a gender earnings gap has existed at the White House for as long as those salary records have been available (since 1995). Although men and women at the White House get paid the same for the same job, there are always more men than women in the highest-paid positions and more women than men in the lowest-paid, and that’s the case for both Democratic and Republican presidents. So while there’s likely no gender discrimination and no gender wage gap at the White House, there IS a gender earnings gap that persists year after year, regardless of the president or party. And the gender earnings gap at the White House, like the gender earnings gap that exists for most organizations and throughout the entire US economy, reflects the fact that men and women “do slightly different jobs” as Worstall says. Actually, it’s more accurate to say that men and women mostly do much different jobs, and labor market data show huge gender differences by occupation.

Therefore, if the goal is to close the gender earnings gap, Sandberg’s solution “to start paying women well” will fail – men and women are both getting paid well when they both work in the same position and have the same job qualifications. For example, women who work at the White House are already getting paid well, and receive the same wage as their male counterparts. To close the gender earnings gap at the White House would require that more women remain in the labor force and acquire continuous work experience to qualify for the highest-paid, senior-level positions. Currently, there are just apparently more men than women with the extensive and continuous work experience, who are willing to work long hours under demanding conditions to be hired for the senior White House positions – and that was the same for Bush II, Obama, and Trump.

To close the gender earnings gap — assuming that is even a desirable goal — wouldn’t involve closing a gender wage gap that doesn’t even really exist, it would involve closing lots of other gender gaps that do exist and lead to gender differences in earnings. Below are 20 gender gaps that reflect gender differences in the labor market, and are gaps that generally favor men and help explain why men earn higher incomes on average than women. (Most of the gender differences below are discussed in Warren Farrel’s excellent book “Why Men Earn More: The Startling Truth Behind the Pay Gap — and What Women Can Do About It.“)

Men disproportionately gravitate towards higher paying occupations in technology and hard sciences (e.g., petroleum engineer). Men disproportionately choose higher-risk, higher paying occupations with greater safety risks for occupational injuries and fatalities (e.g., oil field worker, roofer, and logging). Men are more willing to work outdoors in uncomfortable, physically demanding work environments (construction, oil field workers, commercial fishing, logging). Men are more willing than women to choose demanding, intense jobs where you can’t check out at the end of the work day (e.g., corporate attorney, senior White House staff). Men select jobs with higher pay but with lower personal fulfillment (tax accountant). Men select jobs with higher financial and emotional risks (e.g., venture capitalist). Men are more willing than women to work the worst shifts during the worst hours. Men often choose higher paying subfields (e.g., surgery and anesthesiology). Men are more willing to work in dirty or unpleasant environments with minimal human contact (e.g., prison guard, steel worker, truck drivers). Men work longer hours per week than women on average. Men more frequently than women invest in updating their skills with greater financial payoffs (e.g., master’s degree in computer technology vs. master’s degree in education). Men are more likely than women to have more years of continuous experience in their current occupation. Men are more likely than women to have more years of recent, uninterrupted experience with their current employer. Men work more weeks during the year than women, on average. Men are less likely than women to be absent from work (e.g., doctor’s visits, sick days, taking time off when children are sick, etc.). Men are more willing than women to tolerate longer commute times. Men are more willing to relocate, especially to undesirable locations at their company’s request. Men are more willing than women, on average, to travel extensively on the job. Men are more willing than women to take the risk of a variable income, e.g., to be paid by commission vs. a fixed salary. Men often produce more output, e.g., scholarly research articles for university professors.

Note: None of those gaps above apply universally, but reflect overall gender differences that apply in general and on average.

Bottom Line: To close the gender earnings gap, women have a lot of gaps to close and Sheryl Sandberg at least partially recognizes that. Women have to be willing to work more hours per week, more weeks per year, work more in higher-risk jobs and be more exposed to occupational injuries and fatalities (e.g., be willing to experience 50% of workplace fatalities instead of the current 7%), work more in jobs that are physically demanding in more hostile work environments, be willing to commute longer distances, take less time off work for family reasons, take fewer sick days, be willing to accept higher-risk variable incomes like commission-based compensation, be willing to travel more and relocate more often, accept jobs with less human contact, sacrifice job-related personal fulfilment, etc. To paraphrase Worstall, unless and until there are equal numbers of each gender working in the same occupations, for the same number of hours and with the same years of continuous experience, commuting the same times, suffering the same number of occupational fatalities, etc., there will be a gender earnings gap. The only way to close that gap is to get to a point where men and women are completely interchangeable in their family and work roles, and getting to that outcome is probably impossible; and an outcome that even women apparently don’t want, given their current demonstrated preferences for career options, work hours, commute times, and family responsibilities.