In his rambling and wan State of the Union speech, Barack Obama tried using a cultural reference to score a little rhetorical flourish on an old canard. Leveraging his income inequality agenda, Obama claimed women make only 77 cents for every dollar a man does in the workplace, calling it a vestige of “Mad Men” society:
Today, women make up about half our workforce. But they still make 77 cents for every dollar a man earns. That is wrong, and in 2014, it’s an embarrassment. A woman deserves equal pay for equal work. She deserves to have a baby without sacrificing her job. A mother deserves a day off to care for a sick child or sick parent without running into hardship — and you know what, a father does, too. It’s time to do away with workplace policies that belong in a “Mad Men” episode. This year, let’s all come together — Congress, the White House, and businesses from Wall Street to Main Street — to give every woman the opportunity she deserves. Because I firmly believe when women succeed, America succeeds.
This statistic has been repeatedly busted as false. Just before the 2012 election, economist Dean Kalahar knocked down the methodology behind “averaging” wages in a free market (via Power Line):
First of all, the wage gap is based on inappropriate use of data and statistical analysis. In the U.S. the 77% number is calculated by looking at the median yearly earnings of women to men. The median is defined as the middle value of all the wages in a given sample. Using the median is useful if we are comparing winter temperatures between New York and Tampa, where one dimensional data has validity, but applying it to humans that have free will and biological differences proves nothing except that demagoguery works.
Is the median wage lower for women? Absolutely it is, but the statistic is not an apples to apples, job for job comparison and thus has nothing to do with “paying women less than a man for doing the same job.” Using the median without taking into consideration specifics of individuals in the workplace is intentionally misleading or ignorant.
So what causes the variation in pay? Personal and workplace choices account for much of the gap. Labor Department research shows that men choose more dangerous and high stress jobs. Men choose higher paying career fields. And men hold more full time jobs, work longer hours, weekends, and nights than women. All these factors lead to higher wages regardless of gender.
Even feminist Hanna Rosin dismissed this metric last August, also concluding that the actual difference is (a) much smaller, and (b) due to “rational choices” made by women:
The official Bureau of Labor Department statistics show that the median earnings of full-time female workers is 77 percent of the median earnings of full-time male workers. But that is very different than “77 cents on the dollar for doing the same work as men.” The latter gives the impression that a man and a woman standing next to each other doing the same job for the same number of hours get paid different salaries. That’s not at all the case. “Full time” officially means 35 hours, but men work more hours than women. That’s the first problem: We could be comparing men working 40 hours to women working 35. …
Economists Francine Blau and Lawrence Kahn did that in a recent paper, “The Gender Pay Gap.”.”They first accounted for education and experience. That didn’t shift the gap very much, because women generally have at least as much and usually more education than men, and since the 1980s they have been gaining the experience. The fact that men are more likely to be in unions and have their salaries protected accounts for about 4 percent of the gap. The big differences are in occupation and industry. Women congregate in different professions than men do, and the largely male professions tend to be higher-paying. If you account for those differences, and then compare a woman and a man doing the same job, the pay gap narrows to 91 percent. So, you could accurately say in that Obama ad that, “women get paid 91 cents on the dollar for doing the same work as men.”
The point here is not that there is no wage inequality. But by focusing our outrage into a tidy, misleading statistic we’ve missed the actual challenges. It would in fact be much simpler if the problem were rank sexism and all you had to do was enlighten the nation’s bosses or throw the Equal Pay Act at them. But the 91 percent statistic suggests a much more complicated set of problems. Is it that women are choosing lower-paying professions or that our country values women’s professions less? And why do women work fewer hours? Is this all discrimination or, as economist Claudia Goldin likes to say, also a result of “rational choices” women make about how they want to conduct their lives.
Still, since Obama wants to make it an issue with this median application on wages, how does his own organization stack up? As those of us who have followed the demagoguery on this point know, the White House has its own pay gap, as McClatchy discovered:
But a McClatchy review of White House salaries shows that when the same calculations that produced the 77 cents is applied to the White House, the average female pay at 1600 Pennsylvania Avenue is less than the average male pay. When counted the same way that produced the 77-cent figure, the analysis found, women overall at the White House make 91 cents for every dollar men make. That’s an average salary of $84,082 for men and $76,516 for women.
Asked about its own payroll, the White House said Wednesday that it should be measured by how it pays men and women in the same jobs, but not the kind of broad brush that compares overall male and female pay.
In other words, the White House doesn’t want to be measured by the same yardstick they use for everyone else. The 77-cent canard is based on averaging on the widest possible “big brush” scale. Their answer — that men and women doing the same work and responsibility get paid equally — holds true in the marketplace as well. In fact, that’s what the 91% gap shows, in both the White House and the Blau-Kahn study; the difference is in the rational choices made by women in the marketplace, not some kind of malicious conspiracy against the female gender.
However, that doesn’t allow a failing lame-duck President to demagogue on national television, in order to avoid his own massive failures at reordering one-sixth of the economy. Perhaps if a few other media outlets started holding the White House to the same yardstick it wants to apply broadly and ignorantly to everyone else, then we might get a little less of that. In the meantime, kudos to McClatchy and reporter Lesley Clark for performing some actual journalism.
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