Is the Gender Gap in Wages really Closing?

Why is a raven like a writing desk? (Chapter 7, Alice in Wonderland)

The Mad Hatter is famous for having riddles that really do not have a lot of meaning and in our world today we are sometimes surrounded with headlines that really have no meaning.


On September 15th, the front page of USA Today was ornamented with the heading “Gender pay gap smallest on record!” At first glance this headline will make you want to pull a Champagne bottle out and celebrate. The message the headline gives is “Hey girls, we finally made it, we have closed the gap!” From the headline you think “great job, we are making progress, we are finally closing the gap” but as you read on the ugly truth comes out. Almost nothing has really changed in the gender gap of pay.


The article declares in triumph that women have finally earned 82.8% of the median weekly wage of men. Excuse me, USA Today, that is a triumph?!? In my view anything under 100% is not even worth celebrating about. For those of us running companies it would be like going to our boards and saying: “Hey guess what guys, we made 82.8 % of the budget, isn’t that great!” We all know what happens when we come in at 82.8% of a budget or target, so why the double standards? Why should we celebrate when women make 82.8% of the median weekly wage of men?


USA Today goes on to tell us why we should be happy. The median has gone up from 76.1% for the same period a decade ago. Now come on folks, a whopping 6.7% in a decade?  Lets get with reality.  It has taken us ten years to gain 6.7% points. If we continue down this road, I will be long retired by the time women and men actually earn the same median weekly wage. If my nieces and Godchildren are lucky they may just earn the same as men before they hit middle age. This for me is not something to celebrate.


As you continue to read the article, it gets even worse and you put the Champagne away and take out the schnapps. The truth is, there is no real change in equal pay for women. USA Today explains that the bad news is why the gap has closed. It has nothing to do with fair pay for performance; it has to do with the shifting work force in this recession. 


Economist Robert Dragon, Research Director for the Institute for Women’s Policy Research, explains men have been losing jobs faster than women in the recession and because of the decreases in manufacturing and construction – primarily men’s positions – the gap is closing. This is also being offset by less erosion in industries like health and government, which are primarily more female oriented. What does this mean? Well, essentially there has been no change in actually moving women’s pay closer to the median of men. The market forces such with women moving into more higher paid jobs like lawyers and doctors, combined with men moving into lower paid job has influenced these figures.


So what’s the bottom line here? Although women are moving into higher paid jobs, it does not mean that they are getting equal paid for them. Although the gender mix among jobs in the market place is also changing, it does not necessarily mean that women are making progress and getting closer to meeting the median wage of men. If we look at these numbers and compare apples and apples and not apples and oranges, then we really do not see any progress. Even if we compare apples and oranges like the newspaper article in USA Today does, then I do not consider 6.7% gain in one decade as progress. That is a little more than one half a percent per year and for me this is nothing to celebrate about.


So, ladies, lets thank USA Today for the great headlines, and since a man wrote the article I can understand why these kinds of numbers may be perceived as progress. For women these numbers have no more meaning than “Why is a raven like a writing desk”.