Why Can’t Women Be Paid as Much as Men?

Pay inequity between men and women runs long and deep, it seems.

Apr 13, 2014 at 1:23PM

Source: The White House Blog

A few days ago, President Barack Obama signed two executive actions meant to help close the pay gap between working men and women, noting that American women still earn only $0.77 for every $1.00 earned by a man.

An executive order seeks to stop federal contractors from retaliating against workers who discuss pay levels, while a presidential memorandum sets up regulations requiring contractors to submit compensation data to the Department of Labor.

A huge difference in earnings
As the above graphic shows, the lifetime effects of the gender pay gap are striking, costing women hundreds of thousands of dollars in lost compensation over their working lives.

The situation isn't getting a whole lot better with the passage of time, either. The education and employment portion of this Census Bureau infographic shows that, in 1940, women earned $0.62 for each male worker's dollar; by 2010, that gap had closed by only a measly $0.12. The current rate cited by Obama seems to indicate that there has been improvement over the past three years, at least.

Source: U.S. Census Bureau

It didn't take long for commentators to chime in on this issue, pointing out that the White House itself has a pay gap between the sexes. According to the American Enterprise Institute, political staffers who are female make only $0.88 compared to every dollar earned by male staffers.

Why the discrepancy?
This response by a conservative think tank like AEI is notable in that it does not dispute that a wage gap exists – only that the Obama administration has one, as well. In 2009, the federal U.S. Merit Systems Protection Board pegged the difference at $0.93 for women staffers, versus the $1.00 made by men. If both sets of data are correct, federally employed women seem to be losing ground.

The big question is, of course: Why do women still make so much less money, on average, than men in comparable jobs? Experts have poured forth commentary on this issue, and Obama's press secretary noted that the White House numbers are skewed only because women tend to cluster in lower-level positions. Since census data shows that college graduation rates are essentially the same for women and men, it seems odd that this should be so.

As far as the national wage rate is concerned, some analysts note that women gravitate toward careers in education and health care, which are lower paying than, say, construction and other jobs generally held by men. Also in play is the fact women often have less career experience, since some take time off to raise families. This last issue only explains about 10% of the differential, however – which leaves 40% still unaccounted for.

It seems unlikely a swipe of the presidential pen will change a problem that has persisted for decades, but the conversation is opening up, and that's a start. Pay inequity between the sexes is an issue that has proven to be entrenched in our society – but, with a bright spotlight trained upon it, perhaps it won't take another 70 years to see some noticeable improvement.

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Jun 12, 2015 at 5:01PM

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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