Seventy-Seven Cents: The Statistics on Wage Discrimination

By Mike Stankiewicz | September 1, 2015

We’ve all heard about the pay gap between men and women, but it seems that one specific statistic is used to illustrate this issue. Proponents of new equal pay laws claim that women make “77 cents for every dollar a man makes.” It’s a number that has been passed around for years by feminist groups, political organizations, and even many prominent politicians. Even President Obama used the “77 cents to a dollar” claim in his 2014 State of the Union address as an example of injustice against women.

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.

-President Obama, 2014 State of the Union address

While that statistic is accurate, further analysis indicates that it may not be the best way to capture the issue at hand. The available evidence suggests that there is a notable wage gap, but that evidence also suggests that the cause of the gap is due to a wide range of factors, which must be taken into account when talking about wage disparities.

Where does this “77 cents” statistic come from and to what extent is wage discrimination a problem for women in the workforce?

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The Statistics

You get the 77 cents claim when you take the median, full-time, year-round wage for men and compare it to that of women using data from the census. While accurate based on that calculation, it may also be misleading. The statistic does not take into consideration differences in skills, education level, relevant experience, benefits, hours worked, or even occupation. According to the Washington Post, comparing wages based on weekly earnings narrows the gap to 19 cents and when you look at hourly wages the gap is 14 cents, but those measures also have drawbacks.

The variance between different wage gap estimates generally comes from how these statistics are gathered. Each survey and calculation use different methodologies and it’s very difficult to determine objectively how and if discrimination plays a role in wage differences.

So what’s the pay difference when you take all these into consideration? What other factors may also cause this gap?

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Causes:

Hours and Family Care

According to the Center for American Progress, women work on average 35 minutes per day fewer than men. While this most likely will not have an impact on employees who are salaried, that difference will have a notable effect on workers receiving an hourly wage.

According to a Harvard Business Review Study, 43 percent of women with children leave the workforce at some point. There are many reasons why women drop out of the workforce after having children–unpaid maternity leave causes many women to leave their jobs to raise their children due to high childcare costs and time constraints. The statistics also show that once women leave the workforce, many never return. Of those who stop working, only three-quarters of them will eventually start again, and less than half will resume full-time jobs. Because many women don’t return to work in the same capacity as they left, their wages and experience levels are typically lower once they re-enter. Available evidence suggests that having children disproportionately affects women’s careers relative to their husbands. BLS data shows that women who are not married have a much smaller wage gap–earning 95 cents for every dollar a man makes.

Education and Occupations

Men and women also choose different career paths, which often can result in large income differences. In 2013, Georgetown University conducted a survey on the average wage by college major. The study found that nine of the ten best-paying majors were mostly chosen by men:

1. Petroleum Engineering: 87 percent male
2. Pharmacy Pharmaceutical Sciences and Administration: 48 percent male
3. Mathematics and Computer Science: 67 percent male
4. Aerospace Engineering: 88 percent male
5. Chemical Engineering: 72 percent male
6. Electrical Engineering: 89 percent male
7. Naval Architecture and Marine Engineering: 97 percent male
8. Mechanical Engineering: 90 percent male
9. Metallurgical Engineering: 83 percent male
10. Mining and Mineral Engineering: 90 percent male

On the other hand, nine out of ten of the lowest paying majors were dominated by women:

1. Counseling Psychology: 74 percent female
2. Early Childhood Education: 97 percent female
3. Theology and Religious Vocations: 34 percent female
4. Human Services and Community Organization: 81 percent female
5. Social Work: 88 percent female
6. Drama and Theater Arts: 60 percent female
7. Studio Arts: 66 percent female
8. Communication Disorders Sciences and Services: 94 percent female
9. Visual and Performing Arts: 77 percent female
10. Health and Medical Preparatory Programs: 55 percent female

These numbers show that women generally prefer careers that help serve the community or require a level of artistic ability. Men, on the other hand, are more likely to enter a field that involves engineering and manufacturing development. This may be the biggest factor for wage differences, as a community organizer would not make the same as a biochemical engineer.

But why are so few women entering these higher paying, male dominated fields? A study by Indiana University Bloomington shows that many women who enter these “sex-segregated” fields experience high levels of stress due to “coworkers doubting their competence,” “low levels of support from coworkers,” and even sexual harassment. Instead of outright wage discrimination–where women are given less money than men for the same work–this study suggests that different biases push women into lower-paying fields.

Women also tend to prefer jobs that have greater benefits (paid maternity leave and more vacation time) even if the pay is lower. According to a report from the Federal Reserve Bank of St. Louis, when benefits are included in a worker’s total compensation, the wage gap shrinks to 3.6 percent.

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Overall Pay Difference

According to PolitiFact, when every factor is accounted for, the wage gap narrows to 93 to 95 cents per dollar. This does not indicate equal pay, but it also shows that 77 cent statistic can be overly simplistic. The evidence suggests that outright discrimination has decreased over the years, but it still exists and certain factors disproportionately affect women in the workforce. According to a survey by Glamour magazine, only 39 percent of women asked for a higher pay when starting a new job versus 54 percent of men.

But there is also a large chance that wage differences may be due to discrimination. For example, women may be denied raises or promotions over their male coworkers. According to a Gallup survey, 15 percent of women feel that they were wrongfully denied a promotion because of their gender.

There are other things to consider as well. Raising the tipped minimum wage would greatly benefit women as they make up 2/3 of tip workers. Pay transparency would allow women to discuss their pay with their co-workers, making it easier to identify pay discrimination. Paid and longer maternity leave would also encourage mothers to re-enter the workforce in stronger numbers.

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Conclusion

It’s incredibly difficult to determine the exact size of the gender wage gap and the extent to which discrimination plays a role. Because each study uses different calculations, there are often significant disparities in gap estimates. But nearly all reliable and credible surveys do show there is some level of wage discrimination between men and women–whether it is 5 percent or 22 percent. Even if the gap is only one percent, that’s still an injustice.

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Resources

Primary

Gallup: In U.S., 15 percent of Women Feel Unfairly Denied a Promotion

Federal Reserve Bank of St. Louis: Gender Wage Gap May be Much Smaller than Most Think

Georgetown University: The Economic Value of College Majors

Additional

Wall Street Journal: Washington’s Equal Pay Obsession

ARI.org: February 20 is White House Equal Pay Day

Washington Examiner: The ’77 Cents for Every Dollar’ Lie

Washington Post: The White House’s Own Wage Gender Gap

 FactCheck.org: Playing Politics with the Pay Gap

Washington Post: President Obama’s Persistent ’77-cent’ Claim on the Wage Gap Gets a New Pinocchio Rating

Washington Post: The ‘Equal Pay Day’ Factoid that Women Make 78 Cents For Every Dollar Earned by Men

TechRepublic: TechRepublic has Just Published its 2010 IT Skills and Salary Report

 Center for American Progress: Explaining the Gender Wage Gap

The Atlantic: Why 43 percent of Women With Children Leave Their Jobs

Medical Daily: Women Working In Male-Dominated Jobs Experience Higher Levels Of Stress And Health Problems