Gender Pay Equality … By When?

By: Nancy Ordman

The U.S. Census Bureau recently reported good news: for the first time since 2007, women narrowed their income gap with men, achieving an increase of about one percent to 80 cents on the dollar. For millennial women, the difference is about 10 cents.

The Bureau also reported the bad news: the gender pay gap still exists, and for several groups the gap is considerably higher. For black women, the gap is 67 cents; for Hispanic women, 60 cents.

And there is additional bad news: the Trump administration has dropped a rule established by the previous administration requiring large companies to report how much they pay workers by race and gender, claiming that the policy would not have the intended results. Companies can now effectively hide this information from the public.

Why does this gap persist, despite decades of government effort to identify gender-based wage discrimination? Two Cornell University economists, Francine Blau and Lawrence Kahn, analyzed the overall pay gap and ascribed its origins to several different sources.

President Barack Obama signs two new executive actions aimed at increasing transparency about women's pay during an event at the White House in Washington, D.C. on April 8, 2014. Photo credit: White House/Chuck Kennedy
President Barack Obama signs two new executive actions aimed at increasing transparency about women's pay during an event at the White House in Washington, D.C. on April 8, 2014. Photo credit: White House/Chuck Kennedy

Common explanations for salary disparities, including educational achievement and work experience, explain much less of the difference, given the progress women have made. Another researcher, Mario Lackner, suggests that gender differences in competitiveness could play a role. Women’s attitudes toward risk also are factors.

But overall, Blau and Kahn calculate that 38 percent of the pay gap comes from pure gender discrimination, so anti-discrimination policies still have an important role to play. Professor Blau told the New York Times that “Some of [the gender pay gap] undoubtedly does represent the preferences of women, either for particular job types or some flexibility, but there could be barriers to entry for women and these could be very subtle. It could be because the very culture and male dominance of the occupation acts as a deterrent.”

Suggested remedies include reducing occupational gender segregation and career interruptions. Third Way, a centrist think tank, supports a parental phased-leave program, which would allow parents to maintain seniority while working part-time. Such a policy enables  women to stay on the same promotion trajectory as men—or conversely for men, in the less-common case where men take substantial paternity leave. Lackner suggests adjusting education to encourage competitive attitudes in women as well as men.

An additional policy change would help more women afford to stay in the work place: a higher tax credit for child care expenses. The benefit would be the same as Third Way’s parental leave program: women keeping their spots on the corporate ladder, substantially increasing their incomes by achieving managerial and executive positions earlier in their careers.