The "77 Cents on the Dollar" Myth
December 11, 2014
Pundits have spent the last few years touting the claim that women are paid 77 cents for every dollar that men are paid for the same work, as if employers are discriminating against women by offering lower pay. But that claim is untrue. As Mark Perry, scholar at the American Enterprise Institute, explains, most of the difference in male and female pay is due to age, marriage and hours worked -- not gender.
The Bureau of Labor Statistics (BLS) just released a new report on women's earnings. According to the BLS, full-time female workers made just 82.1 percent of the median weekly earnings of comparable male workers in 2013.
What's responsible for that wage gap? It's not discrimination, says Perry. He delves into the details of the BLS report, first noting that men tend to work more hours than women. Of full-time workers (those working at least 35 hours per week), just 14.3 percent of women worked at least 41 hours in 2013, compared to 25.5 percent of men. Similarly, 6.3 percent of men worked 60-hour weeks, compared to just 2.7 percent of women. By comparing women who work 40-hour weeks to men who work 40-hour weeks, women actually earn 89.6 percent of male earnings.
Age plays another role: comparing workers between the ages of 25 and 34, women actually earn 89.4 percent of what comparable male workers earn.
Additionally, part of the pay gap is due to marriage: for full-time, single workers who have never been married, women earn 95.2 percent of men's earnings, reducing the wage gap to just 4.8 percent. According to Perry, marital status explains 75 percent of the 17.9 percent wage gap identified by the BLS. And by adding in children, the wage gap shrinks even more: comparing full-time, single workers with no children at home under the age of 18, women earned 96.1 percent of men's earnings.
Even if most of the pay gap is explained by marriage, children and age, does this mean that employers are discriminating against married women and those with children? No, says Perry, noting that such women tend to desire workplace flexibility and make career choices different from those of men. As Perry and AEI scholar Andrew Biggs wrote in the Wall Street Journal, mothers with children tend to exit the labor market (meaning that they have less work experience when they return than their male counterparts) and tend to seek jobs that allow for telecommuting and other flexibility that generally pays less.
Source: Mark J. Perry, "New BLS report on women's earnings: Most of the 17.9% gender pay gap in 2013 is explained by age, marriage, hours worked," American Enterprise Institute, December 9, 2014.
Browse more articles on Economic Issues