Insights & Advice

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Income Inequality among 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 Barak Obama, State of the Union Address.

This week the President met with female members of congress to discuss income inequality among the sexes. At the same time, the Democratic Party is making the passage of a minimum wage bill part of their campaign strategy for mid-tem elections this year. It appears that how much a woman makes in this country has suddenly become important.

It’s about time. This has been a pet peeve of mine for years. Some long time readers may recall my first four-part series on this subject back in 2009-2010. At least once a year since then I have tried to keep the inequity between the salaries of men and women on your front burner.

There is a lot of misinformation bandied about by both sides on this issue although you would think that everyone would be on the side of women making at least an equal wage with men performing comparable tasks. President Obama didn’t help when he used the often-quoted but confusing “77 cents statistic” during his state of the union address.

Detractors immediately jumped on the number arguing that the 23 cent gender pay gap is simply the difference between the average earnings of all men and women working full-time. It does not account for differences in occupation, positions, education and job tenure or hours worked. They like to add that the U.S. Bureau of Labor Statistics found that when measured hourly, not annually, the pay gap between men and women is only14% not 23%.

Others argue that income disparity may be linked to the field of study that women pursue. A recent survey of 1,000 adult women in higher education by the Western International University found that the income gap decreases significantly in cases where women held degrees in business, technology, science and math. The American Association of University Women concurred with those findings in their study of 15,000 graduates. They found that along with science, math and some technology areas, women received equal pay with men in engineering, healthcare occupations (especially nurses), life science, social services and administrative assistants.

Although it is true that women are now the majority of students pursing academic degrees, but few are pursuing careers in high-paying areas such as petroleum, aerospace, and chemical or electrical engineering. Instead, female students dominate in what are considered the ten least profitable majors like Early Childhood Education, Communication disorders, human services, community organization and so on.

All of the above seems to point to one obvious conclusion. Your income is largely dependent on what degree and profession you pursue. Women, so the critics argue, earn less money because they choose to enter careers that have built-in income disparities.

They conveniently dismiss that, even with all of the above arguments, the statistics indicate that women still suffer from a disparity of income despite degree or profession. They also assume that choice, in American society today, is a woman’s prerogative.  In my next column, I will explore those issues and why and how women now represent 60% of minimum wage workers and 75% of workers in the 10 lowest-paid occupations. Stay tuned.

Posted in A Few Dollars More, Macroeconomics