equal pay

Equal pay for women

Equal pay for women is an issue involving pay inequality between men and women. It is often introduced into domestic politics in many first world countries as an economic problem that needs governmental intervention via regulation. Generally, in third world countries due to cultural and/or religious reasons the pay disparity is much higher. However, there are some societies where women earn more than men: according to a survey on gender pay inequality by the International Trade Union Confederation, female workers in the Gulf state of Bahrain earn 40% more than male workers (due possibly to very low female participation in paid employment).

United States Equal Pay Act of 1963

Legislation passed by the Federal Government of the United States in 1963 made it illegal to pay men and women different wage rates for equal work on jobs that require equal skill, effort, and responsibility and are performed under similar working conditions.

United Kingdom Equal Pay Act of 1970

The Equal Pay Act of 1970 was established by Parliament to prevent discrimination as regards to terms and conditions of employment between men and women.

A similar act to these was passed in France in 1972.

These reflected Article 119 of the original EEC Treaty, which started: "Each Member State shall in the course of the first stage ensure and subsequently maintain the application of the principle of equal remuneration for equal work as between men and women workers."

Gender Wage Equity in the United States

Two questions naturally arise: (1) is there actually a wage gap disparity and, if so, where? (2) why and how has it arisen or maintained itself? Over time, two points of view have availed themselves: one that credits the difference to questions of personal choice, and another that ties the disparity to continuing or vestigial bias or discrimination.

The "Choice" Theory

There have been studies published which have shown that once variables have been removed, pay for men and women with the same experience and education is virtually identical. This has highly advanced the argument that the pay disparity exists due to different choices and values that men and women consider in their careers - men routinely accept more dangerous and higher paying careers than women while women typically choose to devote a substantial amount of their career path time to families and parenting (mommy track). Similarly, men are more willing to travel or relocate, take less time off, and work more hours per week.

This is the point of view espoused in "The Wage Gap Myth" and in a recent installment of John Stossel's "Give Me a Break" and described in more detail in the follow-up reference "'Gender Pay Gap' is pap".

The 'choice' theory is explored from a practical point of view in Warren Farrell's book "Why Men Earn More" (The Startling Truth Behind the Pay Gap - and What Women Can Do About It). Farrell has advocated the idea that "the power of money is not in its earning but in its spending", and has thus emphasized the fact that American women account for 80+% of consumer discretionary spending, which points to the existence of a massive transfer of wealth from men to women that is entirely overlooked by all studies based only on the analysis of wages.

Proponents of the 'choice' theory argue that if employers were allowed to pay women with the same experience and education as men much less than men, then employers would disproportionately hire women to increase profits.

An April 15, 2005 article titled "Gender Wage Gap Is Feminist Fiction" from the libertarian Independent Women's Forum states, "A study of the gender wage gap conducted by economist June O' Neill, former director of the Congressional Budget Office, found that women earn 98% of what men do when controlled for experience, education, and number of years on the job.

The "Discrimination" Theory

In this point of view, espoused by the EOC and described in "Whatever Happened to Equal Pay", the effects of continuing inequity still make themselves felt in the form of gender segregation in the work force, the undervaluation of the types of jobs held prevalently by women, inequities built into the pay system, itself, and the differences in working patterns (e.g. the mommy track).

In a free market capitalist economy this wage gap would quickly be exploited. Corporations could hire only females and return the reduced labor costs to share holders.

Differences in ability

Hedges and Nowell (1995) mentioned that male advantage in edges and Nowell (1995) performed a meta-analysis of national ability surveys that cover a 32-year period. Their primary conclusion is that male scores show greater variance in most abilities. The use of representative samples gives them reassurance that these differences in variance are true, and not the result of differential selection by sex. Their second finding is that average differences in most abilities are small. Exceptions include moderate to strong average advantages for men in math and science and typically male vocations, and moderate to strong average disadvantages to men in reading. They suggest the male advantage in measures of typical male vocations is not predictive, but that the other strong differences are. Thus, they are concerned about the relative disadvantage of men in writing and the disadvantage to women in science and math. However, test scores in both Europe and Asia have shown that in many countries, girls actually outscore boys in math and science, which leaves the differences and similarities between the sexes controversial

Time of Birth as the Primary Factor

A comparison frequently cited women make 75.3 cents on the dollar to men is derived from statistics maintained by the United States Census Bureau from 2003, relating specifically to an across-the-board comparison of year-round full-time workers. Series P-60 of the Current Population Reports maintains regular updates on the distribution of the American population by income, broken down by various demographic attributes, including age and gender.

A closer view of these statistics tends to show that both points of view have missed the mark in serious ways. Indeed, both aggregate statistics and the various methods of breaking down the work world by segments and doing side-by-side comparisons miss the most significant feature of the inequity -- the time of birth: the generation or cohort of the population.

Once this is taken into account, the pattern of inequity in the United States becomes largely predictable. Therefore, it should be considered as the primary factor, with others that may be present derived from it. Indeed, much of what is otherwise attributed to this issue may rightfully be considered to already be subsumed by this single attribute. The society one is born and raised in, in large measure, conditions the values one is instilled with and, subsequently, the propensity toward choosing one or another type of career. Likewise, it conditions the attitudes of potential coworkers, underlings and bosses ... as well as those who would have the power to hire, promote or fire an individual.

In this way, both points of view are incorporated as corollaries.

Three interesting features stand out, when the demographics are broken down by time of birth:

  1. For a given generation, the relative wage disparity tends to remain the same over time. Overall, there is a slight downward trend, but compared to nearby generations, the difference is not that significant.
  2. The disparity does not have a history of having steadily diminishing over time. In fact, it reaches its maximum with the generation preceding the baby boom generation, bottoming out for those who reached their 20th birthday in the mid 1950s.
  3. Following this generation, there is an abrupt transition going from generation to generation. Roughly speaking, for the baby boomers' parents, it's around 60 cents on the dollar; for the baby boomers, about 70-75; for those who reached their 20th birthday in the mid 1980s, about 80-85; and for the youngest workers today, it's reached and passed 95 cents on the dollar.

The momentum does not show significant signs of abating, and it is very close to linear. If extrapolated, based on the figures for these generations drawn from the 1970, 1975, 1980, ..., 2000 compilations, it shows an indication of reaching and exceeding 100 cents on the dollar by around 2010.

The best linear fit done based on the P-60 figures for 1980-2000 (and 2001 and 2002) for those born on or after 1945 included 38 data points and a 90% goodness of fit. The P-60 figures used broke down the 15-25 group into 15-20, 20-25 in 1985, but aggregated them for the other dates. The remaining age groups were segmented into 5 year ranges (25-30, 30-35, etc.). The linear fit has the characteristics

  • 77.01 cents on the dollar in 1995 for someone whose 20th birthday was in 1980
  • 3.26 cents on a dollar decrease per decade, for each generation
  • 8.96 cents on the dollar increase per decade in time of birth

A quadratic fit shows a slight tendency toward levelling off.

Another lesser trend (which may be a product of the small sampling size of the P-60 data for the age group in question and large statistical fluctuations resulting from it) is that there is a noticeable upturn in relative wage equity for the oldest workers, whose 20th birthdays preceded the 1950s. This is not just with respect to generation, as already noted above, but also over time. The 2000 P-60 figures for those who reached 20 before 1950 indicate a relative wage level of about 80 cents on the dollar (but 77 in 2001, 70 in 2002, 65 in 1995).

Based on the P-60 data, the following "dividers" may be noted, based on the current age and the period in question:

For 70 cents on the dollar:

  • In 1970: ages 30 and below
  • In 1975, 1980: 25 and below
  • In 1985, 1990: 30 and below
  • In 1995: 40 and below
  • In 2000: 45 and below
  • (In 2002: 50 and below)

This list excludes those born before 1925, whose members tend to be above the 70 cents on the dollar divider, but where the above-noted fluctuations occur.

For 80 cents on the dollar:

  • Before 1980: Non-existent
  • 1980, 1985: ages 25 and below
  • 1990: 35 and below
  • 1995, 2000: 30 and below
  • (In 2001: 35 and below)

For 90 cents on the dollar:

  • Before 1985: Non-existent
  • 1985: ages 20 and below
  • 1990, 1995, 2000: 25 and below
  • (In 2001: 30 and below)

The disparity seen in the aggregate 75 cents on the dollar (or whatever figure is quoted) is thus seen to arise because the baby boomers and their parents are pulling down the average. However, as they are now reaching retirement age, this masking effect will be removed, and the abrupt transition seen from generation to generation will come to be reflected in a similar abrupt transition in the overall average.

The Possibility of a Coming Reversal in Gender Wage Gap Inequity

The momentum of the change has been dramatic with the most recent generations. However, a closer look at the figures shows that -- at present -- we are still in the linear region of the transition, with little sign of a slowdown yet. Therefore, the possibility arises that we may actually see a reversal in the coming decades, with women outearning men in the aggregate.

This is the most important aspect of the overall picture missed by the two prevailing points of view. While the discussion continues on why the inequity "still exist", the most recent changes in the world are blindsiding all involved.

A dramatic picture of this change -- particularly how it is being masked under the weight of the baby boomer generation and older world -- is seen in the TV news sector. An aggregate comparison of women's and men's salaries for TV news anchors shows that women are making 38% less than men overall (as of 2000), yet women are outearning men at each age range.

Age Group 20-29 30-39 40-up
Comparison +10% +15% +14%

This is an example of Simpson's paradox. The complete disconnect between aggregate and age-related figures is actually somewhat predictable as a consequence of the gender shift that has taken place in this field. The vast majority of graduates from Communications schools in the United States are now female. Yet, there is still a significant vestige from the older, male-dominated, era -- particularly at the highest positions in the field. The net result is not only a gap in the average ages (29 for females, 38 for males) but, with the influx of women from the colleges, a widening in the age gap, and very likely the aggregate wage gap, itself!

This widening is, therefore, actually a precursor of a forthcoming reversal in the direction of movement, rather than a sign of a worsening situation.

The time inevitably comes when the older generations must leave the field -- whether by the attrition of retirement or death. In the national TV news arena, this has already started to happen. With the departure of the older cohort, the masking effect of the pulling down of the average by the baby boomers' and earlier generations will be removed, resulting in what will appear to be a sudden upswing in the aggregate wage gap and even a reversal.

Reference:

Detailed Comparisons

The following data, derived from the Current Population Report, Series P-60, shows in greater detail the progression of the wage gap over time. The birthdates are taken as of March of the following year, the original P-60 data was arrived at by estimation of distributions. The standard error is around 1-2% until later ages around the 60's and beyond, where it shoots up to around 5-10%.

On average, females are paid five thousand dollars a year less than males. Sources for this and further data may be found in the following:

  • U.S. Census Bureau; Current Population Reports, Series P-60
  • 1970: 80 Table 49
  • 1975: 105 Table 47
  • 1980: 132 Table 50
  • 1985: 156 Table 34
  • 1988-1990: 174 Table 24
  • 1990-1992: 184 Table 24
  • 1993: 188 Table 5
  • 1995: 193 Table 7

References earlier data on-line may be found in the following:

and for recent years

* 1994 Male * 1995 Male * 1996 Male * 1997 Male * 1998 Male * 1999 Male * 2000 Male * 2001 Male * 2002 Male
* 1994 Female * 1995 Female * 1996 Female * 1997 Female * 1998 Female * 1999 Female * 2000 Female * 2001 Female * 2002 Female

In the following tables, the starting years of the age ranges are listed. Most listings are for 5 year intervals, though some were aggregated over 10 year intervals. For the older age groups, the aggregation goes the starting age on up. Some figures may need to be more closely investigated, such as the 1970 quote of 72 cents on the dollar for 25-35 year olds. The median earnings are in US dollars, no adjustment made for inflation.

1970 All 25-34 35-44 45-54 55-64 65-up
Male 9521 8256 10258 9931 9071 6754
Female 5616 5923 5531 5588 5468 4884
Wage Gap .59 .72 .54 .56 .60 .72

1975 All 18-24 25-34 35-44 45-54 55-64 65-up
Male 13157 8171 12777 14730 14808 13518 11501
Female 7726 6360 8401 8084 7980 7785 7250
Wage Gap .59 .78 .66 .55 .54 .58 .63

1980 All 15-24 25-34 35-44 45-54 55-64 65-up
Wage Gap .60 .82 .69 .56 .54 .57 .72

1985 All 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-up
Male 24999 9050 13827 20499 24573 28020 30341 30290 29250 28967 27483 27714 23694
Female 16252 8372 11757 15986 17805 18459 17507 17195 16788 16716 16835 17832 19178
Wage Gap .65 .93 .85 .78 .72 .66 .58 .57 .57 .58 .61 .64 .81

1990 All 15-24 25-34 35-44 45-54 55-64 65-74 75-up
Male 28979 15462 25355 32607 35732 33169 35873 31665
Female 20591 13944 20184 22505 21938 20755 22978 22885
Wage Gap .71 .90 .80 .69 .61 .63 .64 .72

1995 All 15-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-up
Male 32199 16659 25313 30413 35268 37317 41361 40666 39424 37298 41893 38930 42047
Female 23777 15141 21747 23757 25142 27254 26513 25617 24257 23700 24728 31925 27411
Wage Gap .74 .91 .86 .78 .71 .73 .64 .63 .62 .64 .59 .82 .65

2000 All 15-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-up
Male 39020 20824 31059 36918 40196 43719 45495 48078 47408 45175 48284 47613 45494
Female 28820 18950 26977 29310 30149 30756 31760 32250 30542 29738 33267 33341 36852
Wage Gap .74 .91 .87 .79 .75 .70 .70 .67 .64 .66 .69 .70 .81

2001 All 15-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-up
Male 40136 21120 31459 36921 41296 44864 46131 47303 47574 45154 51321 45068 43360
Female 30420 19859 28389 30657 31167 31466 32387 33157 32641 29970 35417 35658 33553
Wage Gap .76 .94 .90 .83 .75 .70 .70 .70 .69 .66 .69 .79 .77

2002 All 15-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-up
Male 40507 21342 31356 37744 41956 45115 47276 48332 49885 47789 51072 54071 51656
Female 30970 19570 29051 31246 31692 31809 33133 34280 33377 32030 35161 31909 36129
Wage Gap .77 .92 .93 .83 .76 .71 .70 .71 .67 .67 .69 .59 .70

Canadian Legislation

In Canadian usage, the terms pay equity and pay equality are used somewhat differently than in other countries. The two terms refer to distinctly separate legal concepts.

Pay equality, or equal pay for equal work, refers to the requirement that men and women be paid the same if performing the same job in the same organization. For example, a female electrician must be paid the same as a male electrician in the same organization. Reasonable differences are permitted if due to seniority or merit.

Pay equality is required by law in each of Canada’s 14 legislative jurisdictions (ten provinces, three territories, and the federal government). Note that federal legislation applies only to those employers in certain federally-regulated industries such as banks, broadcasters, and airlines, to name a few. For most employers, the relevant legislation is that of the respective province or territory.

For federally-regulated employers, pay equality is guaranteed under the Canadian Human Rights Act. In Ontario, pay equality is required under the Ontario Employment Standards Act. Every Canadian jurisdiction has similar legislation, although the name of the law will vary.

In contrast, pay equity, in the Canadian context, means that male-dominated occupations and female-dominated occupations of comparable value must be paid the same if within the same employer. The Canadian term pay equity is referred to as “comparable worth” in the US. For example, if an organization’s nurses and electricians are deemed to have jobs of equal importance, they must be paid the same. One way of distinguishing the concepts is to note that pay equality addresses the rights of women employees as individuals, whereas pay equity addresses the rights of female-dominated occupations as groups.

Certain Canadian jurisdictions have pay equity legislation while others do not, hence the necessity of distinguishing between pay equity and pay equality in Canadian usage. For example, in Ontario, pay equality is guaranteed through the Ontario Employment Standards Act while pay equity is guaranteed through the Ontario Pay Equity Act. On the other hand, the three westernmost provinces (British Columbia, Alberta, and Saskatchewan) have pay equality legislation but no pay equity legislation. Some provinces (for example, Manitoba) have legislation that requires pay equity for public sector employers but not for private sector employers; meanwhile, pay equality legislation applies to everyone.

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