Two weeks ago President Obama signed an executive order making it illegal for government contractors to punish employees for disclosing salary information. The purpose of the order is to strengthen existing civil rights legislation that prevents discrimination based on race or gender in the workplace. The president’s action came on April 8, which is dubbed “Equal Pay Day” by activists and news pundits.
Equal Pay Day is considered the date which women must work into the new year in order to earn as much as men. The claim that women have to work an additional three months to earn the same salary as men is largely based on the U.S. Census Bureau’s Current Population Survey that measures women’s earnings as a percentage of men’s earnings. In 2012, according to the report, women earned 77 cents for every dollar a man earned.
The gender earnings gap certainly does exist. Men are paid more than women in the economy as a whole; this is what the Current Population Survey data indicates. However, the causes of the pay gap are debatable.
According to the Bureau of Labor Statistics, the pay gap has been historically driven by a number of factors, including differences in educational attainment, occupational preferences, the choice of part-time work over full-time work and women exiting the work force due to childbirth.
The factors cited by the Bureau of Labor Statistics most likely account for a large proportion of the earnings gap. For example, historically men have been more likely than women to pursue post-secondary education. This trend persisted until the 1990s when women began to outpace their male counterparts in educational attainment. Men have also been more likely to enter into high paying science, technology, engineering and math (STEM) occupations, with males being twice as likely as women to graduate with a degree in a STEM field, according to the College Board.
None of this is to say that gender discrimination does not play a role in the earnings gap. Up until the previous two decades, women’s educational attainment has been stymied by discrimination, and women’s occupational preferences are most likely partly driven by social pressures and perceptions of women in society.
The weight of the economic evidence indicates that the gender pay gap is not caused by classical gender discrimination in the workplace, although perceptions of women’s roles in society still likely play a role. However, a new report by the Pew Research Center indicates that the millennial generation may put an end to disparities in men’s and women’s earnings once and for all.
According to the report, women ages 25 to 32 currently earn 93 percent of men’s hourly wages. With regard to education, women in the same age group are 7 percent more likely than men to hold a bachelor’s degree, and women ages 18 to 24 are 5 percent more likely to pursue post-secondary education. Furthermore, the evidence suggests that perceptions of women’s role in the workplace are changing, as millennial women are more likely than past generations to pursue managerial positions.
One stumbling block for women’s wages may be the persistent underrepresentation of women in STEM fields. If we truly want to put an end to the earnings gap, we should encourage more girls to become engineers, scientists and doctors.
Orion Wilcox is a senior economics major from Bay St. Louis.
