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Lower Male Income Causes Tightest Wage Gap

Monday, September 1, 2003

This Labor Day, women can look back on the second quarter of the year as boasting the narrowest wage gap in history. The statistic, however, was caused by lower male wages and is not expected to end the earnings-discrepancy debate.

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This Labor Day, women can look back on the second quarter of the year as boasting the narrowest wage gap in history. The statistic, however, was caused by lower male wages and is not expected to end the earnings-discrepancy debate.
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Karen Nussbaum

(WOMENSENEWS)--This Labor Day, female workers can feel a little less short-changed.

A recent study found that in the second quarter of 2003, women's hourly median wages totaled 81.3 percent of men's median wages, representing the narrowest wage gap in any quarter on record.

But before celebrating the news, women should notice a less-than-thrilling trend below thesurface of the data: Namely, that the narrowing wage gap was caused by a drop in the median male wage rather than a real gain for women during that period.

The wage gap "has ticked up is largely due to male losses, not female gains," reports Jared Bernstein, an economist at the Economic Policy Institute based in Washington, D.C., and a co-author of the study, "Labor Market Left Behind: Evidence shows that post-recession economy has not turned into a recovery for workers," which analyzed the most recent data from the Bureau of Labor Statistics. The study is scheduled for release this Labor Day.

"Sectors such as healthcare that are disproportionately female are doing very well right now, while manufacturing is doing very badly, and that hurts men more," Bernstein said.

Bernstein said that the gap could either widen or stay the same as men's wages improve along with the overall economy. "It depends on how robust the recovery is and how much unemployment falls. If things stay weak especially in manufacturing we could see the gap close further."

The narrowing of the wage gap marks the continuation of a steady increase in the wages of women as a percentage of men's earnings. In 2002, women's hourly earnings totaled 80 percent of men's, up from 78 percent in 2001 and 2000, Bernstein said.

Gender-Gap Forecast Still Stormy

Despite the relative good news, the latest findings are unlikely to calm the tempest that has surrounded discussions about the wage gap ever since congressional passage in 1963 of an equal-pay act declaring that women and men must receive equal pay for equal work.

Even with the most recent gains for women, liberals and women's activists insist that the wage gap is based in unfair practices on the part of employers and is narrowing far too slowly to be left to market forces to rectify. Many conservatives, meanwhile, maintain that the wage gap is a product of the free choices women, men and families are making.

Karen Nussbaum, the assistant to the president of the AFL-CIO, based in Washington, D.C., says that at the current rate, it will take generations before the wage gap is eliminated entirely.

"If we continue the way we are going, market forces will not solve the pay gap until 2050. That means my youngest daughter's youngest daughter can expect equal pay," said Nussbaum, a supporters of pay-equity laws, such as those already passed in Illinois and Maine, aimed at ensuring that employers compensate men and women equally for work of equal value.

Government Statistics at Center of Debate

According to the 2001 Bureau of Labor Statistics report on median weekly salaries issued last year, women earned less than men in nearly every job category. Among racial groups there was also a discrepancy: white women earned 15.5 percent more than black women and 35.3 percent more than Hispanic women. The Bureau of Labor Statistics is scheduled to release its 2002 report in early September.

Ron Bird, chief economist with the Employment Policy Foundation, a public policy research and educational foundation in Washington, D.C., says that statistics regarding the wage gap are not fine-tuned enough to account for a number of other relevant factors, including age and experience. When it comes to the difference in earnings between men and women, he says, workers are the ones making the decisions that lead to a gap.

"When you factor in differences in occupation, differences accounted for by age, occupational choice, total amount of experience in the workforce, then almost all of the supposed gap disappears," Bird said.

As for the difference in earnings between the races, Bird said the discrepancy stems from systemic problems such as access to education and resources that no piece of pay-equity legislation can solve.

"To the extent there's a problem, it's not because of the behavior of employers. Most employers are committed to equity and diversity," Bird said.

Uneven Playing Fields

While statistics regarding the national wage gap can be explained by a variety of divergent theories, research on the state level has shown that proactive changes would be needed in some cases to quickly achieve a level playing field for men and women.

A study by the University of Wyoming published in May found that men in the state are clustered in the higher paying industries, such as mining, transportation and utilities. And in certain fields, education does little to rectify the problem, since many of the higher paying jobs in the sectors dominated by men do not require college degrees.

In order to correct the discrepancy, the study found, Wyoming would either have to change its economic base or direct women toward the higher paying sectors.

"The wage gap is closing slowly over time as society changes," the report stated. "The question for the political process in Wyoming is whether some of the things that might be done to speed along the reduction of disparity are desirable or possible."

Jennifer Friedlin is a writer based in New York City.

 

 

For more information:

Economic Policy Institute--"Labor Market Left Behind: Evidence shows that post-recession economy has not turned into a recovery for workers"
(Adobe PDF format):
http://www.epinet.org/briefingpapers/142/bp142.pdf