Bruce Bartlett Opinion Editorial: Women Receive Higher Pay -- And Pay A Higher Marriage Penalty

Opinion Editorial
Monday, May 31, 1999
Women Receive Higher Pay -- And Pay A Higher Marriage Penalty

A new report from the Labor Department shows that women are continuing to make gains in the workplace. However, a study from the Treasury Department shows that such gains are coming at the cost of higher taxes, while a report by the Council of Economic Advisers says they are causing a time squeeze for working mothers.

According to the Labor Department, median weekly earnings for women reached $456 in 1998, an increase of 14 percent since 1979 in real (inflation-adjusted) terms.
By contrast, earnings for men have declined by 7 percent over this same period, from $642 to $598.
As a result, women made 76.3 percent of what men made last year, compared with 62.5 percent in 1979. Interestingly, women did better in some places than others.
Women in Washington, DC did best of all, earning 92.1 percent of what men made last year.
Those in California, New York, Missouri and Florida made more than 80 percent of men.
Those in North Dakota, Connecticut, Indiana, Utah and Wyoming, on the other hand, did worse, making less than 70 percent of men (see figure).

Women's earnings are likely to improve in coming years, as older women who had less education and were subject to greater discrimination retire. Younger women, who have had greater career opportunities in areas their mothers had no hope of entering, are now virtually equal to their male counterparts. Women between the ages of 16 and 24 made 91.3 percent of men in 1998.
The Labor Department also reports that women college graduates are gaining on men at a rapid rate. They have seen their earnings rise 21.7 percent since 1979, while male college graduates have raised their earnings just 7.7 percent. One reason for this is that women are gaining on men in occupations typified by high earnings growth. In 1998, 46.4 percent of full-time workers in executive, administrative and managerial positions were women, up from 34.2 percent in 1983.
Increases in the number of women working and improvements in their pay, however, have also led to a higher marriage penalty from the tax code. Marriage penalties apply only to two-earner couples and hit those where each spouse has a similar income the hardest. According to the Treasury Department, this year 64 percent of two-earner couples will suffer a marriage penalty. In the aggregate, they will pay $28.3 billion more in federal taxes than if each spouse could file as a single.
Another cost of women's gains in the workplace is a loss of time with their children, according to a Council of Economic Advisers report. It says parents had 14 percent less time for their children in 1996 than in 1969, mainly because more women now work outside the home.
Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, May 31, 1999.

For CEA report http://www.whitehouse.gov/WH/EOP/CEA/html/famfinal.pdf

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