Why is the gender pay gap in the United States (1:0.77) so large in the United States despite there being civil rights legislation against discrimination in wages based on sex? Is it due to poor enforcement? A flaw within the bill itself? etc?
Why is the gender pay gap so large in the United States despite the Equal Pay Act of 1963?
Because it isn't.
In short, the much-cited "77 cents" figure is from the "lies, big lies, and statistics" department of political propaganda.
The real unexplained wage gap is 94%
The AAUW has now joined ranks with serious economists who find that when you control for relevant differences between men and women (occupations, college majors, length of time in workplace) the wage gap narrows to the point of vanishing. The 23-cent gap is simply the average difference between the earnings of men and women employed “full time.” What is important is the “adjusted” wage gap-the figure that controls for all the relevant variables. That is what the new AAUW study explores. (source: Huffington pos, citing Association of University Women (AAUW) study "Graduating to a Pay Gap")
The AAUW researchers looked at male and female college graduates one year after graduation. After controlling for several relevant factors (though some were left out, as we shall see), they found that the wage gap narrowed to only 6.6 cents.
So, is it due to discrimination?
As per above, of the "23 cents" gap, 17 is 100% definitely has nothing to do with discrimination at all.
The researchers honestly admit that they don't know how to explain the remaining 6% (as in, at the moment they can't attribute it to discrimination).
How much of that is attributable to discrimination? As AAUW spokesperson Lisa Maatz candidly said in an NPR interview, “We are still trying to figure that out.”
Interestingly, if you look at younger generation, at least in the UK, not only does the pay gap disappear, but it reverses itself to men's disadvantage:
The latest report from the Office of National Statistics is even more conclusive: the gender pay gap effectively doesn’t exist between the ages of 18 and 39. Between the ages of 22 and 29, women marginally out earn men.
So what can possibly explain it? Without outright assuming it's discrimination due to your own political biases?
The same Telegraph article linked in the last paragraph has a possible explanation:
However, it's impossible to ignore the fact that men's wages start outstripping women in the years after most people have children.
And if that hasn’t convinced you, research by Essex University and the London School of Economics has indicated that lesbians out earn straight women.
All the evidence points towards a gender pay gap that is, in part, driven by childcare rather than sexism. This doesn’t mean that we shouldn’t care about closing the pay gap – but it does make the situation more complex.
Another interesting theory I heard proposed (though never saw any research conclusively backing it up) was that one possible factor is much higher prevalence of males among high-functioning autism diagnoses. There are plausible reasons to suppose that there might be causative explanations.
Additional theory (again with no research support I'm aware of) rests on the fact that men generally are more risk-taking than women.
If a risk is taken and pays off, that makes the person high-performer and they usually would get paid more.
If a risk is taken and fails, you usually don't get paid less (although in edge cases you get fired but that's rare unless one was Lehman Brothers level reckless).
To be successful, a company needs to be agile - which means internal experimentation and risk taking.
There isn't a flaw in the bill. The $0.77 metric is a raw number. It sounds good, but it fails to take into account any other factors
The official Bureau of Labor Department statistics show that the median earnings of full-time female workers is 77 percent of the median earnings of full-time male workers. But that is very different than “77 cents on the dollar for doing the same work as men.” The latter gives the impression that a man and a woman standing next to each other doing the same job for the same number of hours get paid different salaries. That’s not at all the case. “Full time” officially means 35 hours, but men work more hours than women. That’s the first problem: We could be comparing men working 40 hours to women working 35.
There's another problem with the metric as well. Women tend to value less hours and flexibility over men. Taking that into account narrows the gap considerably, if not all but removes it (emphasis mine)
But every “full-time” worker, as the BLS notes, is not the same: Men were almost twice as likely as women to work more than 40 hours a week, and women almost twice as likely to work only 35 to 39 hours per week. Once that is taken into consideration, the pay gap begins to shrink. Women who worked a 40-hour week earned 88% of male earnings.
Then there is the issue of marriage and children. The BLS reports that single women who have never married earned 96% of men’s earnings in 2012.
While women might be facing discrimination in individual cases, but as a whole there's no one single problem you can point to. Back to the Slate article
The point here is not that there is no wage inequality. But by focusing our outrage into a tidy, misleading statistic we’ve missed the actual challenges. It would in fact be much simpler if the problem were rank sexism and all you had to do was enlighten the nation’s bosses or throw the Equal Pay Act at them. But the 91 percent statistic suggests a much more complicated set of problems. Is it that women are choosing lower-paying professions or that our country values women’s professions less? And why do women work fewer hours? Is this all discrimination or, as economist Claudia Goldin likes to say, also a result of “rational choices” women make about how they want to conduct their lives.
The issue is that the pay gap (77/100 being the typical ratio) isn't caused by companies literally cutting the pay of women by 23%.
If it were, anti-discrimination legislation would make that a quick fix.
The issue is that the pay gap is a cultural side effect and is related to a plethora of cultural norms (both past and in some cases, still present):
- going back 100 years + there was a cultural norm that higher education was for men, not women
- for many decades (edit: er, centuries) women didn't have the right to vote
- for many decades the cultural norm was that men go to work and are the breadwinners, women stay at home and are the home makers
- biologically, women have children. This often took them out of the workplace (both voluntarily and involuntarily)
- cultural norms are slow to change and even in the past couple of decades there's still a push for women to be the child rearers, men to to the breadwinners
- in the US, we have limited job protection for pregnancy
- in the US, we have no mandated paid maternity leave (one of the few countries on the planet that don't)
- and, yes, some workplace discrimination for sure.*
So to answer the question, legislation, itself, can't fix the gap given all the legacy cultural baggage that has contributed to it. Any anti-discrimination legislation is merely a step in moving those cultural norms in a particular direction.
* since it came up in so many comments, I thought I'd list out some entertaining books, movies and TV shows that deal with this topic. If nothing else, they are fun to watch:
- North Country - movie about discrimination against women in the mining industry
- Hidden Figures - movie that shows the challenges women--specifically black women--had competing in the male dominated work force.
- Mad Men - Fictional, but based on society at the time. Goes into a lot of details of the different challenges women faces in the workforce (in this case, in the advertising industry)
- Shoot Like a Girl - A book about women in combat...including how the military is changing their opinions on barring women from combat roles.
And there are literally dozens of other examples. I guess the topic makes for great dramatic entertainment!