Equal Pay Day Is Misleading

April 17, 2012

For those of you who are interested in gender pay gaps, you likely know today (April 17th) is Equal Pay Day. This date "symbolizes how far into 2012 women must work to earn what men earned in 2011," according to the National Committee on Pay Equity.

However, this statement is misleading and construes the facts about gender pay differentials. Yes, it is true that the average pay of female workers is less than the average pay of male workers. In fact, according to the Bureau of Labor Statistics (BLS), median full-time female workers' pay is only 81 percent of median full time male workers' pay.

The issue with these generic statements is they do not control for differences between the two genders that can account for much of this pay gap. Together with the New York Times Economix blog, PayScale took a deep dive into gender pay differentials to see what differences do exist once you control for outside factors. Continue reading after the break to see what we found.

Common Jobs by Gender

Much of the gender pay gap can be explained by the common jobs held by each gender. According to both the BLS and PayScale data, common job families for men are often in higher paying areas, such as management, IT, business and engineering, while common job families for women are often in lower paying areas, such as healthcare, education, social service and administrative support.

Do You Know What You're Worth?

This isn't to say that men only choose high paying jobs and women only choose low paying jobs, as both genders are present in all job families. The above statement is just to show that it is misleading to compare national median wages by gender because they are commonly in different jobs with different pay levels.

For example, below are the median weekly earnings of full-time wage earners for a sample of the aforementioned job families, according to the BLS:

Architecture and Engineering Occupations: $1,315
Computer and Mathematical Occupations: $1,305
Management Occupations: $1,237
Healthcare Practitioners and Technical Occupations: $995
Education, Training and Library Occupations: $919
Community and Social Service Occupations: $813

As you can see from the above figures, pay for common female occupations is typically lower than common male occupations.

Apples to Apples: Do Women Actually Earn Less Than Men?

As shown above, one main explanation for the gender pay gap is job choice, but what if we look at pay differences within a given job? In fact, what if we go one step further and compare two workers with the same characteristics in a given job, with the only difference being their gender, does the wage gap disappear?

As seen in previous blog posts, we have undertaken thorough research projects to answer this very question. By using our unique dataset here at PayScale, which measures over 150 compensable factors, we are able to provide one of the strongest answers to the question, "If a man and women are doing the exact same job with the exact same qualifications, responsibilities, and employer type, is the man still paid more than the woman?"

The answer? It depends on the job.

When we first compared a set of 120 common jobs, the typical female worker across these jobs earns pay that is about 90 percent of the typical male worker pay. However, this was simply just looking at pay by gender for these jobs and didn't take into consideration other compensable factors.

Once we controlled for the measurable outside factors that influence pay within a job (e.g. experience, education, certifications, skills, etc.), women earn pay that is 96 percent of that earned by men — a much tighter relationship than the 81 percent quoted by the National Committee on Pay Equity.

However, notice that it is not 100 percent. There are still jobs where a pay gap exists. Some jobs experience a pay gap of 10 percent or more and these jobs tend to be upper level management jobs (e.g., CEO, CFO, Sales Director, VP of Marketing, etc.).

There could be any number of reasons as to why these jobs are the ones with the largest pay gap, all of which were discussed in-depth in a previous post:

These higher level jobs have less concrete or quantifiable measures of productivity or duties.
Women may work fewer hours due to responsibilities set upon them by having and raising children.
Sexism/Discrimination/Good ol' Boys Club may exist in these positions.
Men are generally overrepresented in higher ranking positions and may tend to hire and promote applicants like themselves.
Women typically do not ask for raises as frequently as men, which stunts their pay growth.

Another reason behind the gender wage gap comes care of one political official, Wisconsin Republican state Senator Glenn Grothman, who says women are paid less because "money is more important for men." Obviously this type of statement provides proof behind reason #3 above.

All of these reasons aside, the key takeaway is the gender wage gap does exist in certain occupations, but the message put out by Equal Pay Day makes the situation appear more dire than it is once you do an apples-to-apples comparison of similarly qualified and experienced male and female workers doing the same job.

That being said, more efforts do need to be made to eradicate the wage gap in upper level management positions that exist for non-work related reasons (e.g., sexism, favoritism, etc.). Once key step that can be made is for women to be more forthcoming when it comes for asking for a pay raise.

Do you need relevant market data to make a strong case when negotiating for higher pay? When you want powerful salary data and comparisons customized for your exact position or job offer, be sure to build a complete profile by taking PayScale's full salary survey.

Regards,

Katie Bardaro
Analytics Manager, PayScale, Inc.