How Much of the Gender Wage Gap Is Due to Discrimination?

By Wall, Howard; Reed, Alyson | Regional Economist, April 2001 | Go to article overview

How Much of the Gender Wage Gap Is Due to Discrimination?


Wall, Howard, Reed, Alyson, Regional Economist


The response to economist Howard Wall's October 2000 article on the gender wage gap prompted some spirited feedback from readers. Among those we heard from was Alyson Reed, director of the National Committee on Pay Equity, who asked if we would consider publishing an alternative view. The following is a summary of Wall's original remarks, Reed's response and Wall's rebuttal.

The Gender Wage Gap and Wage Discrimination: Illusion or Reality?

----------------- by Howard Wall-----------------

Despite laws to prevent wage discrimination in the workplace, the median weekly earnings for full-time female workers in 1999 was only 76.5 percent that of their male counter-- parts. A close analysis, however, reveals that much of this gap is due to non-discriminatory factors:

* Weekly vs. hourly wages. Women typically work fewer hours a week than men. When you compare hourly wages, almost one-third of the gap disappears.

* Education, experience, occupation, union status. A 1997 study shows that men's educational and experience levels are currently greater than women's and that men gravitate toward industries and occupations that are higher-paying than women, including union jobs. These factors reduce the remaining wage gap by 62 percent.

The remaining 6.2 cents of the gap, which is unexplained, is the maximum that can be attributed to wage discrimination. Some of this unexplained portion might be due to the difficulties involved in accounting for the effects of childbearing on women's wages. For example, women aged 27 to 33 who have never had children earn a median hourly wage that is 98 percent of men's.

If it is flawed as a measure of wage discrimination, what do we make of th gender wage gap? Perhaps it is best used to indicate the underlying expectations and social norms that drive our career and workforce decisions, which themselves may be affected by other types of gender discrimination.

Whatever You Call It, It's Still Discrimination and It Still Affects Women's Wages

----------------- by Alyson Reed -----------------

As Howard Wall notes in his article, the relationship between wage discrimination and the gender wage gap is complicated. As the national nonprofit coalition that has worked on this issue exclusively for more than 20 years, the National Committee on Pay Equity has tracked the debate, collected the facts and talked with women across the country about their experiences with discrimination on the job. This long-term involvement in pay equity issues informs our understanding of the complexities surrounding the wage gap and its use as an indicator of workplace equality.

I agree with Wall that not all of the wage gap is attributable to outright wage discrimination. He notes that differences in experience, training and occupation all contribute to the wage gap. I agree. However, it is important to understand whether the differences in experience, training and occupation themselves reflect larger workplace and societal discrimination. Indeed, Wall's point that other types of discrimination may have played a part in creating human capital and other differences between men and women is right on target.

The issue of occupational differences between men and women, and how the occupational segregation of these groups contributes to wage disparities, has been a focus of pay equity research. These differences may not constitute wage discrimination per se, but the disparities do reflect sex discrimination that limits the economic opportunities of many women. The issue of occupational segregation is a significant component of the wage gap because studies have shown that the more women are represented in a particular occupation, the less money it is likely to be paid. In other words, in a sexist society, the work of women tends to be undervalued.

The issues of experience and training are also significant. If women have less workplace experience than men do, it is typically because they have taken time out for family care-- giving. …

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