How can Obama decry the gender "pay gap" without accusing his own White House of discrimination?

Mollie Hemingway writes:

The only way to continue to use the statistic that women are paid 77 or 78 cents on the dollar for the same work as men is if you believe all work should be paid exactly the same, no matter the skills or education required, the hours worked, the risk involved, the experience accumulated, or any of the other factors that go into wage determination. This so-called gap is calculated simply by comparing the average amount of money men make and comparing it to the average amount of money women make.

If that’s your standard — which is a joke of a standard, but let’s leave that aside — the White House suffers from a deeply alarming pay gap. And a pay gap that hasn’t gotten better since Obama took office.

We have two possible scenarios here. Either the White House — the headquarters of Mr. Equal Pay himself — suffers from a whopping pay gap of 13.3 percent, practicing unconscionable sexism by paying its female staffers an average of five figures ($10,100) less than the male staffers, or the White House is guilty of deception about pay gaps.

It’s actually the latter, but it’s not like our media will press them on the matter. Either way, it would be nice if political types stopped shaming those of us who think there is more to life than work for pay. Some of us have chosen different career paths because we value vocations that pay in ways that are not monetary. We’re kind of sick of being made to feel bad for wanting to be homemakers, spend more time with our children or simply have more flexible schedules than we would otherwise be able to in a different career.

2 surprising pay gaps

1. Single men earn less money the heavier they are, while single women earn more money the heavier they are. (This is after controlling for several factors, including education, age, and whether they're raising young children.)

This might seem to counter the "perception that obese women are discriminated against in the job market far more than obese men." But as economist Marina Adshade notes in her blog post, these facts might be due to the fact that heaviness is a more severe liability for women than for men in the dating market. Thus, heavy women have a stronger incentive to earn lots of money for themselves.

Clearly, being on the higher-income side of a pay "gap" doesn't necessarily show that you have an unfair advantage over the people on the lower-income side.

2. Lesbians earn more money than straight women. The gap is about 40% before controlling for any of the factors that might contribute to the gap. And there are many such factors:

[L]esbian women are better-educated on average, are more likely to be white, live predominantly in cities, have fewer children, and are significantly more likely to be a professional. But even when you control for these differences, the wage premium is still on the order of 6%.

Here's a very important insight from that second link, a post on a blog called Offsetting Behavior by economist Eric Crampton (I've changed Crampton's brackets to parentheses to be clear that I'm still quoting him):

[I]f correcting for the observables reduces the wage gap between lesbians and heterosexual women from around 40% (the paper cites average hourly wages of $18.70 for lesbians and $13.34 for cohabiting non-lesbian females) to around 5%, odds are pretty high that there are a bunch of unobservables also correlated with job performance that aren't captured in the wage regression.

More broadly: if you think it's implausible that employers love lesbians so much that they pay them extra for no good reason, then shouldn't you expect the same when looking at the male-female pay gap?

"Rich Mom, Poor Mom" article in New York Times glosses over economic reality.

Nancy Folbre, a University of Massachusetts economics professor, writes in the New York Times:

The Mama Grizzlies running for office this fall oppose increased government spending, including programs that could help parents balance paid employment with family work.

Perhaps increased economic inequality in the United States means that individuals running for office don’t have a very clear understanding of the problems facing people in different circumstances than their own. In particular, they don’t fully appreciate the difficulties many mothers face holding down difficult jobs while caring for young children.

You might assume that highly paid women suffer a bigger economic penalty than other women when they have a baby because, after all, they have more earnings to lose.

In a startling new look at the “motherhood penalty,” however, two sociologists at the University of Massachusetts Amherst, Michelle J. Budig and Melissa J. Hodges, show that mothers with lower earnings suffer the biggest percentage loss in hourly wages.

Folbre criticizes other people for lacking a full understanding of what it's really like to be a mother.

What I quoted is a small portion of the whole article. If you click the link and read the whole thing, do you notice what Folbre never mentions?

Hint: It's a hugely important factor in how much money a person actually has, which is not the same as how much money a person earns.

As comment #4 on the article says, the article never mentions "husbands" or "fathers" or "spouses" or "families."

As Thomas Sowell says in Economic Facts and Fallacies (discussing a different issue, the gap in pay between men and women):

In principle, family responsibilities can be divided equally between husband and wife, father and mother. In practice, that has not been the norm in most places and in most periods of history. Since economic consequences follow from practices, rather than principles, the asymmetrical division of domestic responsibilities produces male-female differences in incomes . . . . Moreover, statistical records of money payments can be misleading as to economic realities. Family income is pooled income, and how it is spent, for whose benefit, does not depend on whose name is on the paycheck or paychecks, or whether one paycheck is larger than the other.

Everyone depends on other people in life. No one is just a lone individual. Your money isn't necessarily equal to the money you receive from the paycheck at your job.

All of this applies to mothers at least as much as it applies to everyone else in the world.

Are we simply not supposed to mention these basic facts? Maybe some people find them distasteful for some reason, and would rather leave them unsaid. Fine . . . but then, they shouldn't criticize other people for selectively ignoring economic realities.

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Women make less money than men on average, but how much (if any) of this is due to sexism/discrimination?

Last week Christina Hoff Sommers had a New York Times op-ed about the gap in men's and women's pay. The headline: "Women Don't Need the Paycheck Fairness Act." Sommers writes:

AMONG the top items left on the Senate’s to-do list before the November elections is a “paycheck fairness” bill, which would make it easier for women to file class-action, punitive-damages suits against employers they accuse of sex-based pay discrimination.

The bill’s passage is hardly certain, but it has received strong support from women’s rights groups, professional organizations and even President Obama, who has called it “a common-sense bill.”

But the bill isn’t as commonsensical as it might seem. It overlooks mountains of research showing that discrimination plays little role in pay disparities between men and women, and it threatens to impose onerous requirements on employers to correct gaps over which they have little control. . . .

[F]or proof, proponents point out that for every dollar men earn, women earn just 77 cents.

But that wage gap isn’t necessarily the result of discrimination. On the contrary, there are lots of other reasons men might earn more than women, including differences in education, experience and job tenure.

When these factors are taken into account the gap narrows considerably — in some studies, to the point of vanishing. A recent survey found that young, childless, single urban women earn 8 percent more than their male counterparts, mostly because more of them earn college degrees.

Moreover, a 2009 analysis of wage-gap studies commissioned by the Labor Department evaluated more than 50 peer-reviewed papers and concluded that the aggregate wage gap “may be almost entirely the result of the individual choices being made by both male and female workers.”

I agree with all of that. I don't have much of an opinion on the bill, since I haven't studied the provisions. I just want to focus on the underlying premise: that there's a significant discrimination-based gap in how much men and women are paid.

Over the weekend, the New York Times ran several letters rebutting the op-ed. If you know how these discussions tend to go, and if you're familiar with the NYT's letters section, you might be able to guess what the top letter says. Linda D. Hallman of the American Association of University Women (AAUW) writes:

The wage gap is real. Our 2007 report, “Behind the Pay Gap,” which controlled for factors flagged by Ms. Sommers, like education and experience, found that college-educated women earn less than men with comparable backgrounds.

The latest analysis Ms. Sommers cites, which shows young women outearning young men, needs to be viewed with a skeptical eye. The average American woman still earns 23 percent less than her male counterpart earns, a gap that is widest among older women and smallest among younger women.

Now, let's break down the main talking points from that letter:

1. The AAUW did a study that took into account Sommers's points, and they found that the gender gap is still "real" — women earn "less" than men.

2. "The average American woman still earns 23 percent less than her male counterpart earns."

3. The gap is "widest among older women and smallest among younger women."

Point 3 indicates that the gap is shrinking over time. It's easy to imagine that this trend would continue and eventually there'd be little or no gap, even without controlling for other factors.

How about points 1 and 2? If you read those in quick succession, you might go away with the impression that there's been a rigorous study that controlled for all the variables and still found a 23% pay gap between American male and female workers.

But that's not what Hallman says in her letter. She says the AAUW controlled for variables and found a gap . . . of unmentioned size. She says these are the same "factors flagged by Ms. Sommers" — implying that their report should allay the concerns Sommers expressed in her op-ed. Shortly after making these statements, she says there's a 23% gap.

But that 23% gap is before controlling for any variables. So that statistic is simply repeating the shortcoming that Sommers called out in her op-ed.

I wanted to see if that study Hallman links to did a better job of clarifying how much of the gap is actually due to gender itself, rather than other factors that happen to be correlated with gender. The link goes to an "Executive Summary" and a "Full Report" (which are both PDFs).

I don't see anything in the summary about controlling for variables. It simply reports the uncontrolled figures as if they're the definitive word on the "real" gap. We're supposed to see these statistics and immediately perceive sexism in how much employers pay their employees. But the gap alone doesn't demonstrate there's any sexism at play — it could result (in whole or in part) from benign factors that are correlated with gender.

So, how about the full report? I haven't read the whole thing — it's 45 pages, not counting the end materials. But they clearly found a lot of explanations for why there is such a gap, many of which they attribute to men's and women's different choices.

Here's one example of a factor, which I've taken almost at random: the report tells us that among full-time workers, men work longer hours than women (45 and 42 hours a week, respectively). This is also true among part-time workers (22 and 20 hours a week worked by men and women, respectively). Only 9% of female full-time workers work over 50 hours a week, compared with 15% of male full-time workers who work such long hours. (This is from page 15, and there's a relevant graph — only about full-time workers — on page 17.)

A little later, the AAUW gives us this conclusion, in a green, bold-faced heading:

A large portion of the gender pay gap is not explain by women's choices of characteristics.

Under that heading, the AAUW claims to support the conclusion:

If a woman and a man make the same choices, will they receive the same pay? The answer is no. The evidence shows that even when the "explanations" for the pay gap are included in a regression, they cannot fully explain the pay disparity. The regressions for earnings one year after college indicate that when all variables are included, about one-quarter of the pay gap is attributable to gender. That is, after controlling for all the factors known to affect earnings, college-educated women earn about 5 percent less than college-educated men earn. Thus, while discrimination cannot be measured directly, it is reasonable to assume that this pay gap is the product of gender discrimination.

Well, 5% is much smaller than the gap invoked in the NYT letter: 23%.

Now, you could sensibly respond: "But even a 5% difference in pay based on gender is unacceptable." Of course it would be unacceptable is women were paid 5% less than men due to their gender.

However,  even this controlling-for-variables statistic does not give us grounds to conclude that if you're a woman, you get paid 5% less than you would have if only you had been born male.

After all, how could the report have reached such a definitive conclusion? It firmly says "The answer [to whether a man and women who make the same choices will make the same money] is no," and this is proven by "the evidence." That presupposes that the AAUW in fact looked at all the relevant evidence. But the best anyone can do when they're studying such an immensely complex societal question is to control for some variables. It's an open question whether there are other relevant factors out there that the study ignored.

For instance, I said that the report looks at hours worked by full-time workers and hours worked by part-time workers. OK, that's nice. But there's some more information I'd like to know, which I don't see in the report's discussion of hours: how much more likely are men to work full-time rather than part-time? This question isn't answered by telling us how many more hours the full-time male workers work than their female counterparts. (As I said, I haven't read the whole report, so perhaps I'm wrong that the report fails to consider this factor. But you would think they'd mention it in the section about how many hours full-time and part-time workers work.) [UPDATE: Detailed discussion of this point in the comments. It's a little more complex than I thought when I was writing this post, but I still believe the report hasn't fully considered the distinction between full- and part-time workers.]

Now, what are all the variables the study failed to take into account? I don't know! And we're probably not going to find the answer to that question in the report; naturally, the report is going to talk about the things the researchers did study rather than talk about the factors they failed to study.

Thomas Sowell explains in his book Economic Facts and Fallacies (page 61):

Ideally, we would like to be able to compare those women and men who are truly comparable in education, skills, experience, continuity of employment, and full-time or part-time work, among other variables, and then determine whether employes hire, pay, and promote women the same as they do comparable men. At the very least, we might then see in whatever differences in hiring, pay and promotions might exist a measure of how much employer discrimination exists. Given the absence or imperfections of data on some of these variables, the most we can reasonably expect is some measure of whatever residual economic differences between women and men remain after taking into account those variables which can be measured with some degree of accuracy and reliability. That residual would then give us the upper limit of the combined effect of employer discrimination plus whatever unspecified or unmeasured variables might also exist.

In other words, the size of the gap attributable to gender discrimination might be 5%. Or it might be less than that. It might be 2% or 1%. It might be zero. It might even favor women. We don't know the answer.

If you're interested enough in this question to have read this far, I highly recommend buying Economic Facts and Fallacies and reading the chapter called "Male-Female Facts and Fallacies," where Sowell brilliantly explains many of the factors that account for the gender gap.

IN THE COMMENTS: LemmusLemmus draws an insightful analogy:

Sowell is right, of course. Just ascribing residual variance to your favourite factor, such as sexism, is the statistical equivalent of the God of the Gaps argument. [link added]

Do women earn less money than men for equal work?

Economics professor Nancy Folbre says they do, in this blog post that the New York Times' website published yesterday. At the top of her post, she claims:

Tuesday is the day on which women’s wages catch up to men’s wages from the preceding week. On average, female workers have to put in more than six days of paid work to earn what men earn in five.

Among those who usually worked full time during the first quarter of 2009, women’s median weekly earnings were 79 percent those of men. That implies that the catch-up clock for them rings at about 10:38 a.m. on Tuesdays (assuming a standard five-day week and eight-hour day starting at 8 a.m.).

Some women earn less than men because they choose less lucrative occupations or take more time out from employment. But a 2003 Government Accountability Office study controlling statistically for these factors showed that women’s average pay between 1983 and 2000 flat-lined at about 80 percent of men’s over the entire period.

You'll notice that her link on the word "study" goes to this PDF of the 2003 U.S. government report. Well, if you actually click the link and read the report, you'll find that her summary is literally correct but misleading. The authors conceded that while they tried to control for confounding factors, they might have failed to adequately consider others:

[W]omen have fewer years of work experience, work fewer hours per year, are less likely to work a full-time schedule, and leave the labor force for longer periods of time than men. Other factors that account for earnings differences include industry, occupation, race, marital status, and job tenure....

Even after accounting for key factors that affect earnings, our model could not explain all of the difference in earnings between men and women. Due to inherent limitations in the survey data and in statistical analysis, we cannot determine whether this remaining difference is due to discrimination or other factors that may affect earnings. For example, some experts said that some women trade off career advancement or higher earnings for a job that offers flexibility to manage work and family responsibilities.

In conclusion, while we were able to account for much of the difference in earnings between men and women, we were not able to explain the remaining earnings difference. It is difficult to evaluate this remaining portion without a full understanding of what contributes to this difference. Specifically, an earnings difference that results from individuals’ decisions about how to manage work and family responsibilities may not necessarily indicate a problem unless these decisions are not freely made. On the other hand, an earnings difference may result from discrimination in the workplace or subtler discrimination about what types of career or job choices women can make. Nonetheless, it is difficult, and in some cases, may be impossible, to precisely measure and quantify individual decisions and possible discrimination. Because these factors are not readily measurable, interpreting any remaining earnings difference is problematic.

Now, maybe you think 80% is such a huge discrepancy that it couldn't plausibly be explained by unmeasured factors.

But that's an old report -- it only looked at data up to 2000. The GAO released a new report yesterday that looks at data from as recently as 2007 and suggests that we should be much more optimistic:

GAO used data from the Office of Personnel Management's (OPM) Central Personnel Data File (CPDF)--a database that contains salary and employment data for the majority of employees in the executive branch. GAO used these data to analyze (1) "snapshots" of the workforce as a whole at three points in time (1988, 1998, and 2007) to show changes over a 20-year period, and (2) the group, or cohort, of employees who began their federal careers in 1988 to track their pay over a 20-year period and examine the effects of breaks in service and use of unpaid leave....

The gender pay gap--the difference between men's and women's average salaries--declined significantly in the federal workforce between 1988 and 2007. Specifically, the gap declined from 28 cents on the dollar in 1988 to 19 cents in 1998 and further to 11 cents in 2007. For the 3 years we examined, all but about 7 cents of the gap can be explained by differences in measurable factors such as the occupations of men and women and, to a lesser extent, other factors such as education levels and years of federal experience. The pay gap narrowed as men and women in the federal workforce increasingly shared similar characteristics in terms of the jobs they held, their educational attainment, and their levels of experience. For example, the professional, administrative, and clerical occupations--which accounted for 68 percent of all federal jobs in 2007--have become more integrated by gender since 1988. Some or all of the remaining 7 cent gap might be explained by factors for which we lacked data or are difficult to measure, such as work experience outside the federal government. Finally, it is important to note that this analysis neither confirms nor refutes the presence of discriminatory practices.

GAO's case study analysis of workers who entered the workforce in 1988 found that the pay gap between men and women in this group grew overall from 22 to 25 cents on the dollar between 1988 and 2007. As with the overall federal workforce, differences between men and women that can affect pay explained a significant portion of the pay gap over the 20-year period. In particular, differences in occupations explained from 11 to 19 cents of the gap over this period.

Prof. Folbre acknowledges this study and blandly recites a few of its findings, but she buries it under her sweeping, sensationalistic announcement that women need to work till "10:38 a.m." on Tuesday of a second week to catch up to what men make in one week.

She also asserts that "the pay gap is narrower among federal employees than in the work force as a whole." Her theory for why this is the case: "Job descriptions are more standardized in government employment, and salaries are a matter of public record."

But is that what's really going on? Is federal government hiring more enlightened than hiring in America as a whole?

Or is it simply easier to effectively control for variables when you're looking at a narrower slice of the whole job market?

A commenter on her post ("Milton Recht") gives some specific reasons to think so:

[T]he reason that non-government job studies show a greater gender wage difference that the government sector is that the statistics on private sector wages do not include the employer cost of benefits as part of the wage. All government jobs provide about equal benefits.

Studies are published that show women on average will choose a job with better benefits over higher salary and men on average choose jobs with higher salaries over better benefits. The same studies show that men on average will choose a job without health benefits for higher salaries and women on average will not.

When private sector benefits are adjusted to include employer cost of benefits, the private sector difference shrinks to about the same seven percent difference as government wages....

[T]here are probably valid non-observed, non-discriminatory variables for the pay gap. Otherwise, any employer would be foolish not to hire the cheaper labor if it were comparable in every other aspect except gender.

I realize he's referring to "studies" without mentioning or linking to them, so I'm skeptical of his specific claims. But his theory seems more plausible to me than Prof. Folbre's conclusions, even though she links to several empirical studies.

[UPDATE: Since I wrote that, Milton Recht dropped by in the comments of this post and added details: "A January 2009 Department of Labor study (link below) that studies of gender wage discrimination do not include total compensation." He quotes from the study:

Specifically, CONSAD’s model and much of the literature, including the Bureau of Labor Statistics Highlights of Women’s Earnings, focus on wages rather than total compensation. Research indicates that women may value non-wage benefits more than men do, and as a result prefer to take a greater portion of their compensation in the form of health insurance and other fringe benefits.]

More citations, links, and figures don't necessarily add up to a better analysis. For instance, Prof. Folbre's link to support her claim that women overall catch up on Tuesday at 10:38 a.m. doesn't seem to make any attempt to control for confounding factors. The report she links to simply says:

Women who usually worked full time had median earnings of $649 per week, or 78.9 percent of the $823 median for men.

That's essentially meaningless if we don't know a lot more details about what kinds of jobs they had, what their credentials were, and how much they worked. (Perhaps the study secretly controlled for these factors, but if so, it's not apparent from the link.) Of course, Prof. Folbre emphasizes these findings over the GAO reports.

It's nice to link to multiple studies and invoke the principle of controlling for variables. But if you ultimately cherry-pick the gloomiest-sounding figures you can find, and -- whoops! -- by the way, forget about those pesky variables, context, and alternate explanations based on factors other than sexism ... then you've given up any pretense to empirical validity.


UPDATE: Comments over here.

First ladies and gender insanity

Penelope Trunk has some choice words on the awkward gender dynamics of the present day:

What is up with the constant photo ops of the wives of the men running the financial universe? What about the two women in the G-20? Do we put their husbands in the midst of this group of women? No. It would look insane. And that is exactly the reason that all the other women in the group should feel insane. ...

The G-20 Wives’ Club photos are particularly insulting because these women are being associated not by their special interests, or particular education, or common background, but merely by who they are sleeping with. Seriously. When, other than when rounding up prostitutes for jail, has this approach to grouping women been acceptable to society? ...

While I write this post, Adam Toren has the unfortunate timing of sending me an email to tell me I have been named one of the top 100 women bloggers. I email him back immediately to ask him if he has a similar award for the top 100 men.

And here's my point: women do not need to be called out just because they are women. It's bullshit. Women are doing fine competing with men. Women are earning more than men in corporate America, women are keeping their jobs at a higher rate than men in the recession, and, Adam, when it comes to making money from blogging, the mommy bloggers knock the ball out of the park. So what's up with segregating women? What is the point?

As a reminder, I'm still looking for data on men's vs. women's salaries in America. I asked this question before, and LemmusLemmus pointed me to a 1999 study cited by Steven Pinker in The Blank Slate that suggests it's dead even. Based on Trunk's examples, women actually make more than men. I'm interested to see if anyone has data showing that women make less than men for comparable work.

Should we have a White House Council on Men and Boys? Should we have a White House Council on Women and Girls?

Last week, President Obama created a "White House Council on Women and Girls."

Kathryn Jean Lopez at National Review has the obvious response:

Where's the White House Council on Men and Boys?

Marybeth Hicks elaborates:

A council on men and boys would promote stable marriage as the best avenue to improve the lives and living conditions of America's women and families. A council on men and boys would address the crisis in American manhood that results in the scourge of infidelity, divorce, lack of commitment and fatherhood with multiple partners.

Dr. Helen doesn't like the idea, or at least not Marybeth Hicks's version of it:

If Ms. Hicks wonders why men have no interest in a "stable marriage," or commitment, she need only look as far as her own dripping disdain for men and her lack of insight into a culture that holds men responsible, portrays women as victims, and then sets up a "council" to correct a problem that women spend over 30 years in the making. A council on women is about expanding their opportunities. A council on men is about controlling them.

I don't buy that explanation for why men screw up society. Men have been screwing up society forever. It's not the result of a few decades of anti-male feminists.

But I want to get back to the thing that actually happened -- the "White House Council on Women and Girls." What I want to know is: why is this really necessary?

Unequal pay? Obama loves to say that women are paid only 78 cents on the dollars relative to men. It's not at all clear to me that women are paid unequally. But that's a complicated enough topic that I want to leave it for a whole other blog post. (If you have actual evidence on this question that controls for all the relevant variables, please let me know in the comments. I cannot emphasize that italicized part enough.)

I'm particularly wondering about the "girls" part. They pointedly chose to put "girls" in the title, not just "women." Why do we need a White House Council on girls rather than, say, boys? This is not a rhetorical question -- I'd be interested to see any answers in the comments.

Lorrie Moore (a family friend) wrote a New York Times op-ed last year that seems mostly outdated because it was about the Hillary Clinton campaign. But it had one insight that's not about the presidential race and is still very relevant:

The children who are suffering in this country, who are having trouble in school, and for whom the murder and suicide rates and economic dropout rates are high, are boys — especially boys of color, for whom the whole educational system, starting in kindergarten, often feels a form of exile, a system designed by and for white girls.

In the progressive Midwestern city where I live, the high school dropout rate for these alienated and written-off boys is alarmingly high. Some are even middle-class, but many are just hanging on, their families torn apart by harsh economics and a merciless criminal justice system. Why does it seem to be the Republicans who are more vocal about reforming our drug laws? Why has no one in the Democratic Party campaigned to have felons who have served their time made full citizens again? Their continued disenfranchisement is a foolhardy strike against these men and their families.

UPDATE: One of the commenters on my mom's post that links to this post makes a good point:

[T]he message here seems to be that no matter how bad things get for boys/men, well, they're men, so they can look after themselves.

Women, on the other hand, need a Presidential Council to make sure they're doing all right, even if by many metrics they are outperforming men.

I think I'd be vaguely insulted if I were a woman.

Another commenter has this ground-breaking idea:

The White House Council on Women and Girls should be merged with the White House Council on Men and Boys to create the White House Council on People, the goal of which is to promote policies that help people. President Obama should head the Council, and its name can be shortened to the White House.