Myths about the Gender Wage Gap

Abigail Hail has a helpful post on The Beacon, the blog for the Independent Institute about the alleged gender wage gap, what she calls "a myth that just won't die." She rightly calls us to get the analysis straight before making political hay from a pet statistic that does not tell the whole story. As Hail notes,

The first thing to notice is that the “77 cents on the dollar” metric isn’t comparing apples to apples. It is a comparison of gross income. That is, it compares the income of all women to that of all men. It fails to take into account important factors—like education, experience, or even just comparing people in the same career. You wouldn’t compare the incomes of elementary school teachers with Bachelor’s degrees to those of individuals with PhDs in physics and complain that there is a “teacher-physicist wage gap” —but this is precisely what this statistic does.

When you take these characteristics into account, the purported “gap” all but disappears.

She then concludes by noting that a lot of the rhetoric that comes from the advocates of state intervention is rather condescending toward the very ones they claim to help.

Now, some will point to the statistics on the careers men and women tend to choose and say that women aren’t really “free” to choose their careers. This is not only incredibly patronizing, but ignores the fact that women in the U.S. are not only well educated, but also well-informed when it comes to selecting our careers. It’s not as if women are unaware that social workers and schoolteachers tend to earn less than engineers. We choose careers just as men do. We consider what we think is most important when selecting a career, look at our options, and make the best choices we can.

When it comes to issues of gender equality, there are a variety of issues to discuss. When having these discussions, however, it’s important for women and men to discuss the facts and present correct information. Otherwise, we not only perpetuate incorrect information, but we ultimately fail to advance these issues in any meaningful way.

I am very happy to see Hail's contribution to the debate, because she affirms many of the points I noted many years ago when I wrote on the same issue. Back in 1999 I came to the same conclusions.

All of this demonstrates that the performance of women's earnings over time is not the result of systematic discrimination. Whether egalitarians like it or not, for the "average" woman family life trumps other concerns on the margin. Employers and employees are merely recognizing this fact of nature: women and men are not equal in the sense of being identical. They are different and have different comparative advantages when it comes to work outside the home versus child rearing.

Of course, both men and women would like to work for much more than what they are getting paid, other things equal. But then, the other things are never equal. That fact serves as a useful device for egalitarian politicians and bureaucrats. Social engineers use the persistence of inequality of income as the warrant for never-ending regulation.