Economy & Business

No, the ‘Real Gender Wage Gap’ Isn’t 51 Percent

An Airbnb employee works from the company headquarters in the SOMA district of San Francisco, Calif., August 2, 2016. (Gabrielle Lurie/Reuters)
An Institute for Women's Policy Research study twists the stats.

For decades, the term “gender wage gap” has referred to the difference in median earnings between full-time working women and full-time working men. Often — erroneously — this statistical difference has been promoted as evidence that women are being paid less than men for doing the same work.

In recent years, especially as evidence emerged of “wage gaps” in the Obama White House and Clinton Foundation offices, many have come to understand that it’s an error to use wage-gap data as a proxy for discrimination, since there are many reasons why men end up earning more than women on average. Full-time working women tend to work fewer hours, to choose different industries and specialties, and to opt for better hours over more compensation, for example.

Unfortunately, the term is becoming confused again, thanks to a headline-making report released by the Institute for Women’s Policy Research. The study claims that the wage gap has been woefully understated, and that in reality women “earn just 49 cents to the typical men’s dollar, much less than the 80 cents usually reported.”

How did they come to this jaw-dropping conclusion?

Simple. They have redefined the “gender wage gap.” They are no longer looking at full-time workers, or even at consistent part-time workers. Rather, they are comparing the earnings of all women and all men who worked at any point during a 15-year period. More than four out of every ten women took more than a year out of the work force during that period, which was nearly twice the rate of men. As a result, women, on average, earned a lot less. That’s hardly a shock.

When you cut past the hyperbole, the report makes important points that could be useful to women and policymakers. For instance, absences from work affect earnings not just in the short term, but years down the road. This is something for people to consider when they are making decisions about career and family life. Policymakers should consider policies that will make it easier for parents to continue to work.

However, IWPR is misleading readers with the suggestion that the “wage gap” is really 49 cents on the dollar. That takeaway being pushed in the press seems designed either to serve as clickbait or to convince more women that the economic deck is irrevocably stacked against them. Neither is helpful to the public debate or to women.

Rather than try to convince women that they are doomed to massive gender discrimination, those who care about women’s economic advancement should seek to build an awareness of the very real consequences of the choices women make they decide what to study, which fields to enter, and how to plan their work lives so they can make informed choices. Overwrought headlines won’t help with that.

Carrie Lukas is the president of the Independent Women’s Forum.

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