White House, Women's Wages, Myths

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WASHINGTON-With Tuesday's arrival of Women's History Month, the White House published a compendium of information about women, Women in America: Indicators of Social and Economic Well-Being.

Although it makes important points about women's attainment in higher education, health, and employment, unfortunately the report's initial comment on wages repeats and exaggerates a myth about women's earnings.

Its first page of text states: "At all levels of education, women earned about 75 percent of what their male counterparts earned in 2009." This spurious comparison as used previously by President Obama was 77 percent. Lowering the figure by two cents on the dollar compounds the error.

This calculation does not hold up when the comparison of men and women accounts for differences in education, years in the workforce, and other factors that influence pay. One example: regardless of gender, people with more job experience typically are paid more. That is widely accepted because on-the-job experience improves skill and efficiency.

As the White House report acknowledges further along in its 97 pages of text, tables, and charts, women aged 25 to 34 earn 89 cents on a man's dollar, even without accounting for different jobs and work experience.

But the White House, in thrall perhaps to ultra-feminists, opened its discussion of women's pay by using a sensational headline-grabbing comparison, 75 cents on the dollar, and it did capture many of the headlines.

Before we go into the problems with the wage ratios, let us note some of the more useful and revealing findings in the report.

Women earn 57 percent of all BAs and graduate degrees awarded, and over half of PhDs. Girls in grades 4, 8, and 12 score higher than boys in reading, but lower in math and science. That's probably why women earn fewer than 50 percent of degrees in mathematics, engineering, and the physical sciences. As much as some feminists dislike it, the truth may be that women are not as strong in math and science as are men.

One warning in the report comes from the analysis of poverty data. "Poverty rates for unmarried female householders with children are particularly high, and have consistently been two or three times as high as overall male and female poverty rates since 1966."

Forty percent of female-headed households with children are below the poverty line. More women are having non-marital children by choice, not accident. Households have high poverty rates if the single parent-usually the mother-has only a high school diploma, or even less education. One solution not mentioned in the report is to get married before having babies.

As for the comparison of wages, the source table published by the Labor Department has a problem of internal inconsistency. True, earnings at individual levels of education, when averaged, purport to show that women earn 75 percent of what men earn. But the same table shows that the aggregated earnings of all full-time women at all educational levels are 79 percent of all full-time men's earnings.

Of course, neither the crude 75 nor the 79 figures are correct. The comparative wage calculations do not account for industry, educational field, occupation, or weekly time worked in excess of 35 hours. That's why women appear to earn less.

In the table, women who might have BA degrees in English are compared to men who might have BS degrees in physics. Women with associate degrees in social work are compared to men with associate degrees in computer science.

Since full time means 35 or more hours a week, the table compares men who work 50 hours with women who work 37.

And women do work less than men. The report states on page 27 that "women of every educational level and at every age spend fewer weeks in the labor force a year than do men." In addition, "on the days that they worked, employed married women age 25-54 spent less time in labor market work and work related activities than did employed married men in the same age group-7 hours and 40 minutes, compared to about 8 hours and 50 minutes."

That's about 5 hours fewer per week, or, in a 40-hour week, 11 percent. So, just on the basis of hours worked, women should earn 89 percent of what men earn.

Turning to page 32, we find that-surprise!-young women actually do earn 89 percent of what men earn, without accounting for education or vocation. No mention of how this squares with the 75 percent ratio discussed on the same page.

In addition, the report cites data showing that more women work part-time. On page 32, it states that in 2009 24 percent of women worked part-time, compared with 11 percent of men. If these women take full-time jobs, their earnings will be lower than they would have been if they had worked full time. That would also be true of men who opt for part-time work, then return to full-time.

That's the way the job market works. It rewards more generously people who work more, not less.

Nowhere does the report attempt to compare earnings of men and women in the same industry, the same job, at the same firm, or even with equal years of work experience. When such economic studies have been performed by researchers such as Professor June O'Neill of Baruch College, men and women are found to earn approximately the same.

In America the 75 cent wage gap is no more real than the 77 cent wage gap. Perhaps unwittingly, the White House report shows that educational choices, jobs, and hours worked are what lead to differences in pay.

Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is senior fellow and director of Economics21 at the Manhattan Institute. Follow her on Twitter: @FurchtgottRoth.   

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