Friday, May 8, 2009

Male and Female pay: the wedge

I get a lot of keyword searches for male and female pay. Well, the BLS reports median weekly earnings by gender on a quarterly basis :
Women who usually worked full time had median earnings of $649 per week, or
78.9 percent of the $823 median for men. The fe- male-to-male earnings ratios
were higher among blacks (93.9 per-cent) and Hispanics (88.4 percent) than among whites (77.9 per-cent) or Asians (81.3 percent).
The chart illustrates the annual average of quarterly real median weekly earnings for men and women 16 years and older roughly every 5 years since 1980. The real number extracts the effects of inflation on earnings. The eye-popping result is the wedge between male and female earnings, roughly 25% on average over the sample. Also, real median female earnings are growing on average, while male earnings are falling.

Here is what the BLS says about the earnings gap:
This article sheds some light on reasons for the gender earnings gap, focusing on the role that the share of women in an occupation plays. We utilize the methodology employed by George Johnson and Gary Solon to identify the sources of the relationship between wages and the share of women in an occupation.3 Johnson and Solon used Current Population Survey (CPS) data to estimate the relationship between wages and the concentration of females within occupations. They found that the relationship was negative, even after controlling for worker and job characteristics. Industry was found to have the largest effect on the relationship, primarily because predominately male industries, such as construction and manufacturing, pay higher wages.
I haven't read the paper, but this is how I read the conclusion: women hold a smaller share of jobs in the industries that pay more. Likewise, there is a big discrepancy between male and female executive pay, as documented by Fortune (with my take on it here).

I will leave it to you all to comment on the dichotomy of earnings across men and women. The earnings data are from the BLS' massive current population survey and exclude self-employment income.

Rebecca Wilder


  1. Smack MacDougalMay 8, 2009 at 4:53 PM

    This BLS report reflects the kind of results you get when you torture statistics.

    Agglomerating work data becomes about as useful as GDP data.

    Only one correlation exists with pay and work -- those jobs that involve higher risk to loss of life and those jobs that take a greater combination of wit and skills or body and skills are those jobs that pay higher.

    Face truth.

    From MLB players to NBA players, men earn more because men offer up great combinations of body and skills, which investors believe they can get a greater return.

    Also, you cannot find many women working as underwater welders, coal miners and radio-active waste remediation technicians putting themselves at high-risk.

    If economists, feminists and other academics were honest, they would compare, say retail sector pay for men and women.

    Quickly, they would get forced to show that no pay discrepancy exists in work where females can deliver the same combination of wit and skills through time as males.

  2. I'd like to see apples to apples comparisons (in the U.S.).

    At the minimum wage level, no company can get away with paying men vs women differently. (I can see an attractive waitress making more tips than waiter but that would be with any tip based wages, I'd think.)

    Even at, say, engineering level, I don't know how companies can get away with paying men vs women differently for the exact same job. For the same experience and same skill set (and job description), I'd expect the pay to be the same.

    I can't see any public job like teaching could be discriminated, either.

    I know with relatively set fees like doctors, the amount that the insurance co will pay won't differentiate between male and female doctors. It all boils down to how many patient you see per day (how popular you are will the patients). My sister is a MD and makes as much money as she wants (with fixed rate per patient). The more she sees, the more she'll make. There is no difference between male or female, as far as I can tell.

    So, what other jobs allow companies to discriminate between male and female?