Women May Earn Just 49 Cents on the Dollar

Do women earn 80 cents on the dollar compared with men, as is commonly cited? Or is the pay gap just pennies, as one recent survey found? Or do women earn a shocking 49 cents on the dollar, as calculated by the social scientists Stephen Rose and Heidi Hartmann in a new analysis published by the Institute for Women’s Policy Research?

The answer is all of the above. Each number highlights a different aspect of a complicated and nuanced situation—one reflecting not only sexism and bias but the choices made more or less freely by millions of women in hundreds of thousands of workplaces. Rose and Hartmann’s number is lowest because it is in some ways most holistic.

“Much ink has been spilled debating whether the commonly cited measure of the wage gap—that women earn 80 cents for every dollar earned by a man—is an exaggeration due to occupational differences or so-called women’s choices,” said Hartmann, who is the president of the Institute for Women’s Policy Research, in releasing the report. “We have actually been underestimating the extent of pay inequality in the labor market.”

The most common way to measure the gender earnings gap is to look at how much women working full-time and year-round make, and compare it with what men working full-time and year-round make. The most recent numbers from the Census Bureau put this gap at roughly 20 cents on the dollar, a number publicized on Equal Pay Day and cited over and over and over again in the media.

That number has some significant shortcomings, researchers have long argued. Women work different kinds of jobs than men do and have different levels of work experience, too. They are more likely to be in low-wage industries, like home-health work. Indeed, women hold 47 percent of jobs overall, but 58 percent of jobs in occupations that typically pay less than $11 an hour, a recent study by the National Women’s Law Center found. Given those dynamics, the 20-cent pay gap reflects the kinds of jobs women hold as much as anything else.

Comparing apples to apples and oranges to oranges, women earn close to what men earn: Women in similar workplaces with similar titles and similar credentials make pretty much what their male peers do, whether they are fast-food employees making close to the minimum wage or corporate executives making hundreds of thousands of dollars a year. This has led some publications to argue that the pay gap is far smaller than generally understood, and yet others to argue that the pay gap is a myth.

This splicing of the data has its own serious shortcomings, though. Study after study has shown that women do not get equal pay for equal work, nor do they have access to equal work. Women struggle to get hired and to ascend the corporate ladder; in one study, men were promoted at a rate 2.2 to 3 percentage points higher than women. When women surge into a given field, pay in that field tends to drop, as if women were some kind of industry-wide reputational pollutant. The bulk of the evidence shows that women earn less in part because of discrimination.

Moreover, women’s employment patterns are different from men’s, Rose, a labor economist at the Urban Institute, told me. They are less likely to work full-time and to spend years-long, uninterrupted stretches in the labor force. They are more likely to have to take time off to have a child, or to have to work part-time in order to care for family members.

Many women do not return to work after having children; when they do, in many cases they return to lower-paying jobs with lower earnings trajectories. Rose and Hartmann’s study found that women’s penalties for leaving the workforce have increased: Women who took a year off from work in the 15-year period starting in 2000 had annual earnings 39 percent lower than women who worked continuously over that time period, a gap that was just 12 percent for women working in the 15-year period starting in 1968. “Women’s earnings losses for time out are almost always greater than men’s,” they find.

According to Rose, these facts suggest that the most accurate way to compare women’s and men’s earnings is to take the career-long view. “When you look at all women versus all men over time, the gap is 51 cents,” he said, referring to the 15-year figure.

What might help close this wide, long earnings chasm? Rose and Hartmann suggest that paid family leave and child-care subsidies would, by making it more financially viable for women to return to the workforce after having kids and by encouraging both men and women to take time off to care for family members. Stronger rules stamping out pay discrimination would help as well. Laws “that prevent employers from asking about past pay will hopefully spread across the United States or become superseded by national legislation,” they write, “establishing a practice that will end the perpetuation of pay discrimination from one job to the next.”

Even then, of course, a gap might remain. For a variety of reasons women do different work than men, enter different fields than men, work less than men, have different work schedules than men, leave work more often than men, and, yes, are simply paid less for the same work. But public-policy changes would give women more control over their working lives, and would help foster a more equitable workplace. And that would be good for everybody.