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Crack researchers at the American Association of University Women (AAUW) have long been seeking the reasons behind the the difference in men’s and women’s earnings. New findings with far reaching implications were revealed as they unveiled their report, “Graduating to a Pay Gap”, via a briefing and live webcast from Washington, DC. The assumption was that by looking at men and women when they were most similarly placed in the workforce, with equivalent education and degrees, all single,  childless, of comparable age and working full time, any differences traceable to gender would be easier to find. Here are some of the highlights:
  • Women get higher grades in college.
  • At one year after graduation, women earn only 82% of what men earn, with average salaries of $35,000 and $42,000 respectively.
  • When women and men work the same number of hours per week, men earn more than women.
  • Male-dominated industries generally pay more than female dominated industries.
  • In male-dominated industries, men earn more than women.
  • In women-dominated industries, men earn more than women.
  • The 18% pay gap at one year after graduation can be partially explained by choice of major, as more men study engineering, and computer and information sciences (tending to pay more), and more women major in education and health care (tending to pay less).
  • When men and women choose the same major, men earn more than women.
  • In no occupational category do women earn significantly more than men.

When all factors that influence earnings are controlled, there remains an unexplained seven percent margin. Undoubtedly, gender discrimination is responsible for some portion, as gender bias persists in workplaces. In spite of the 50 years since passage of the Equal Pay Act,  claims of  gender discrimination are still increasing at the federal level, and employers pay millions of dollars a year in settlements and judgments of these claims in litigation. It is a costly offense when successfully challenged.

Clearly, women cannot count on equal pay even when they make the exact same choices in education and work. Because the starting salary is the basis for raises, promotions and bonuses across the work life, a discrepancy at the beginning will get bigger and bigger as the years go by. The effect is magnified for women, who typically interrupt or alter their employment to deal with children, or ill or disabled family members. On average, a woman’s work life is at least a decade shorter than a man’s, leaving her further and further behind the guy who stood next to her in the “Pomp and Circumstance”  procession. The pay gap never goes away and gets worse as time goes on.

A college education is expensive, and families have been borrowing money to pay tuition. Outstanding student loan debt across the U.S. exceeds the national credit card debt, auto loan debt, and reached the $2 trillion mark in early 2012.  Men and women borrow about the same amount of money to finance their undergraduate education and graduate with equal levels of debt. But with their higher earnings, men can afford to pay off their student loan debt more quickly, devoting a larger portion of their paychecks to repayment. Free of that obligation, men will have more disposable income earlier in life to buy homes or other real property, invest, start a family, and save for retirement. Those advantages will compound over time, continuing to enhance that grad’s economic position throughout the lifespan.

There will be more about the pay gap in the next post. I think it is crucial to establish that it exists and that public policy has a role to play in curtailing this pernicious, persistent form of gender discrimination. Many say it is attributable to women’s “choices” or “lifestyle differences” or other factors within women’s control, and therefore nothing to do with public policy. I vehemently disagree. Women’s – and children’s – poverty rates are always so much greater than men’s. There is a fundamental injustice at work here and we  need to see to it that it is stopped.

“Til next time,

Your (Wo)Man in Washington

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