The Corner

Obama and Romney on the Wage Gap

We hear it over and over again: the myth of the wage gap. In Tuesday’s presidential debate, Katherine Fenton asked President Obama what he intended to do about “women making only 72 percent of what their male counterparts earn.”

Just one problem: Women make about 95 percent of what their male counterparts earn, if the male counterparts are in the same job with the same experience.

Obama’s answer was to brag about the increased regulations he’s put in place through the Lilly Ledbetter Fair Pay Act, which he signed into law in January 2009 — even though women have brought only about 35 lawsuits under the new law.

Romney talked about the women he hired when he was governor of Massachusetts. He also said that we need to “have a strong economy, so strong that employers that are looking to find good employees and bringing them into their workforce and adapting to a flexible work schedule that gives women opportunities that they would otherwise not be able to afford.”

Neither candidate pointed out that women don’t make 72 cents on a man’s dollar, or 77 cents on a man’s dollar, one of Obama’s favorite statistics. This comes from comparing the earnings of all full-time male employees with all full-time female employees. This averages together women who work as social workers with men who work as investment bankers; female English-literature majors with male engineers; and male loggers with female administrative assistants. Part of the gap is differences in hours worked, because full-time means any number of hours above 35 hours, and full-time women work fewer hours than men, on average. When comparisons are made between men and women who work 40 hours per week, women make 87 percent of men’s earnings.

There’s really no reason that, on average, men and women should be paid the same if they choose different majors in college, different jobs when they graduate, and different hours of work. What’s important is comparing men and women with the same job tenure in the same position in the same firm. If there’s a big difference under those circumstances, then there may be discrimination, giving women grounds to sue.

When economists compare men and women in the same job with the same experience, they earn about the same. Studies by former Congressional Budget Office director June O’Neill, University of Chicago economics professor Marianne Bertrand, and the research firm Consad all found that women are paid practically the same as men.

Moreover, federal law for decades has provided legal remedies for women who encounter pay discrimination. If women actually were paid 77 cents — or even 90 cents — on the dollar for the exact same work as men, they could sue. It turns out that American women do not suffer from systematic discrimination.

President Obama says he’s in favor of equal pay, but women staffers in his White House are paid 90 cents on a man’s dollar — if one calculates the figure, incorrectly, based on simple averages.

Women have unparalleled freedom to choose their fields of study and careers. But many prefer to work part-time in order to combine work and family. Family-friendly jobs with flexible hours pay less than jobs with longer, inflexible hours.

It’s not the glass ceiling that keeps women out of the corner office; it’s a choice of how much time and effort to put into one’s career. The millennials call it “work-life balance.” For men and women, to make it to the corner office requires hours of work and travel and little time for family. That means missed birthdays, football games, and school productions. Women seem to mind missing these events more than men.

Look at women at Yale Law School, for instance. In 2012, as it has done in many other years, Yale Law Women — a group that features some of the smartest people in the world — made a list of “Top Ten Law Firms,” in categories related to family friendliness. Yale Law Women picked firms that supported part-time and flex-time work, and had generous parental-leave policies. “One of the goals of the Top Ten List,” the group wrote on its website, “is to generate discussion about family friendly policies at top law firms.” These are women who have the credentials to aim for the C-Suite at major corporations, but some are already planning for part-time and flex-time. There’s no problem with those choices, but these same women shouldn’t cry “discrimination” when they don’t make it to the top.

The myth of the wage gap is pervasive, but demonstrably false. Too bad neither presidential candidate had the guts to say so.

 Diana Furchtgott-Roth is a senior fellow at the Manhattan Institute for Policy Research.


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