Posted by Jed Lewison on Mon Apr 23, 2007 at 5:24 PM Pacific

Men, women, and money

Everybody with a pulse knows that on average women earn less than men, and it's not because they are dumber or less competent. On that much, there isn't any serious disagreement. Today, the American Association of University Women released a report exploring this topic. It’s a useful contribution to the national discussion on pay disparities between men and women.

As a single, young, white male (soon to be 34) you might think that I’d be the last person in the world concerned about pay disparities. Hey, if men make more, then more money (and power) for me, right? Unfortunately for my selfish genes, however, I was raised by a feminist university professor, the type that gives Ann Coulter ulcers, gray hair, and yellow teeth. So basically I’ve been brainwashed to think that it’s a real problem if women earn less than men. (Isn’t it amazing how the power of ideas and abstract thought can triumph over my genetic tendency to want to pay women $0.72 on the dollar?)

Now, fortunately, my mom also believed in motherhood. And I think that if you asked her, she would agree with the proposition that more women than men take time off of work to raise children, and that this will have an effect on incomes.

But in the early part of a woman’s career, the possibility that she might one day become a mom should not impact her pay. Four of my closest friends have worked a total of 15 jobs in the last decade. None of them became a mom – they are all dudes. And none of them earned less at any of their jobs because they didn’t swear a blood oath not to quit. The fact is, when employers hire someone, they expect him or her to eventually change jobs, and whether it’s to become a research analyst or a mother doesn’t really matter. (In fact, they should probably prefer an employee become a full-time mom than work for a competitor!)

What I found interesting about this AAUW report is that it offers statistics about income in the first year following college graduation. Here they are:

women working full-time after graduation earn just 80% of what men working full-time after graduation earn

among these full-time workers, women had a higher average GPA than men (3.16 to 3.04)

When you break the stats down, it becomes clear that discrimination against women is not the primary explanation for the earning gap. For example, full-time male workers work about 45 hours per week compared to 42 hours per week for women. And in many specialized professions, there is hardly any pay gap between men and women. One year after graduation, women make 99% of what men make in medical professions, 98% of what men make in education, and 105% of what men make in engineering. Still, in business and management professions, women make just 81% of what men make, despite being 52% of the employees.

The study’s authors found that 75% of the pay gap could be explained by controlling for the factors that result from choices people make – field of study, occupation category, hours worked, etc. In other words, all things being equal, in today’s market, women can make 95% of what men earn.

Some people may look at that relatively small 5% pay gap and say that we don’t have a serious problem. But I think they are wrong:

First, 5% of a $50k salary isn’t exactly chump change. $2,500 is still enough to cover my Seahawks season tickets (though I’m not sure most women would spend their money this way!) Anything less than zero discrimination is a problem.

Second, it’s still true that women make much less than men for the same amount of work. Even though the primary cause may be that they choose lower-paying professions (like education), part of the reason that these professions pay less is probably because they have been historically dominated by women, who had lower earning potential. The vicious circle is obvious. It’s time we raise the pay of many of these professions, especially education. Who knows, perhaps more men will want to be teachers then? What harm could there be in that?

Third, I wonder if part of the reason that women earn more than men in a field like engineering can be explained by the fact that there are so few female engineers. If the proportion of female engineers increases, it would stand to reason that their pay would decrease relative to men. Although we know that there isn’t much overt discrimination against women, there is still some. When more women enter historically male professions that now pay women a premium because of the paucity of females in their job market, what impact will that have one women’s overall average earning power?

It’s been a long time since I’ve looked at the issue of women and pay in the workforce and these thoughts are totally off-the-cuff. I’m quite sure that my views will evolve over time.

The singular data point that left me most optimistic is that overt discrimination does not appear to be a dominant factor in explaining the income gap between men and women. Nonetheless, women still earn a lot less than men, and that troubles me. To the extent that women may work less than men, it would appear to be an issue of choice. But I find it troubling that a major factor explaining why women earn less than men is that they choose professions that are paid lower wages, especially since part of the reason that these professions earn less is because they are dominated by women.

I don’t pretend to have a solution to the problem, but I think it’s pretty clear that one exists.