As the midterm election approaches, it is worth taking a look at one of the many divisive debates between Republican and Democrats: equal pay for equal work. In North Carolina, the two major candidates, Republican Thom Tillis and Democrat Kay Hagan, take explicitly opposite positions on this issue.
Tillis is reluctant to accept the idea of “equal pay for equal work” between men and women, arguing it would destroy many families. Kay Hagan, along with many of her fellow Democrats, assiduously pursues the course of equal pay for women.
The discord between two parties about this issue does not stop at the state level. In April, President Barack Obama sought to motivate lawmakers in Congress to take action when he repeatedly mentioned that women earn 77 cents for every dollar men earn.
“Equal pay for equal work,” Obama said, urging Congress to prioritize the issue. “It’s not that complicated.”
Many supporters of the “equal pay for equal work” largely attribute the cause of unequal pay to discrimination based on gender. Their aim is to eliminate discrimination against women as much as possible. But the fact of the matter is that the unequal pay issue is a phenomenon of pay gap that always exists, not only due to discrimination, but many other complicated factors.
First, the statistics of 77 percent is too ambiguous and misleading to the general public. That number supporters usually cite is from U.S. Census Bureau’s 2013 statistics when median earnings of men working full time was $50,033, while women’s was $39,157. But that number neglects other perspectives such as occupational differences and hours worked. For example, data from Bureau of Labor statistics show that women generally work fewer hours per week than men. Accounting men and women who work 40 hours a week narrows down the gap to about 88 percent.
Occupational choices and industries also drive the pay disparity. Claudia Goldin of Department of Economics at Harvard University pulled data from the U.S. Census Bureau and found that pay gaps span occupations and industries. Some of these industries particularly reward longer working hours. For example, female pharmacists, who do not work overtime as much as their male counterparts earn on average 92 percent of what men earn. The pay gap narrowed to 90 percent or more in four industries: pharmaceutical, medical, computer programming and technology.
Many studies in economics and sociology repeatedly demonstrate that women tend to earn less than men largely because many women work fewer hours than men and take time off to raise children at home. It can be seen as a result of labor market more than the consequence of discrimination based on gender. What wage reflects is the interaction between labor supply and demand. In some industries, women earn more than men. For instance, the top 10 male models in the U.S. earned only one tenth of the top ten female models. Female models earn more than man in the industry as a result of market demand.
Just because one group earns more than the other does not mean the gap is due to discrimination. Jews on average earn more than other Americans. Residents of Northern states earn more than residents of Southern states even in the same occupation and same industry. No matter how labor economists play around the data—adjusting variables for education, age, gender and occupation—the pay gap never goes away.
If the pay gap is really a result of market forces, then equalizing pay will have the consequences of distorting the market outcome. Raising pay for women mandatorily makes hiring a woman relatively more expensive than a man, causing higher unemployment for women. An equalized pay also give women incentives to deviate from taking care children and families, distorting original choices of women.
With all of these factors closely examined the idea of “equal pay for equal work” sounds just and fair in theory but might not help women as much as people think.
