Wage Gap Continues to Vex Women

The economic boom appears to have fattened wallets more than pocketbooks, exacerbating the persistent earnings disparity between men and women, according to two of the most recent government indicators.

Women’s weekly earnings were closer to men’s in 1993 than they were in 2000. When annual earnings are compared, women had their best year relative to men in 1997. By 1999, the typical woman took home $26,324, almost 28% less than the typical man’s $36,476 annual income.

Economists are not sure what to make of the emerging trend, especially when American women, as a group, are better educated, take less time off after childbirth, and have access to and hold a broader array of jobs than ever before.

“It’s doubly disconcerting that women are going to school and yet the pay gap is widening,” said Heather Boushey, an economist at the Economic Policy Institute. “That’s the question: Why is that going on?”

Although they have no way to determine how much of the pay gap can be blamed on discrimination, economists are eyeing recent employment and social shifts that they can measure. Among the likely suspects are the concentration of men in high-paying technology jobs, the recent boom in male-dominated construction employment, and the introduction into the work force of about a million former welfare mothers.

“We definitely need more research to get the true story, but I think a lot of it is the [stagnation] of the minimum wage, and the fact that men’s real wages are growing again,” said Heidi I. Hartmann, an economist and director of the Institute for Women’s Policy Research.

The gender pay gap is narrowest among hourly wage earners, closing to less than 17% in 2000. One reason for that is the minimum wage is shoring up the nation’s lowest-paid workers.

Hartmann said that a bill introduced in Congress last week to raise the U.S. minimum wage, as California did in January with the state minimum wage, would help close the gender pay gap. California’s minimum wage is higher than the federal.

“Women are two-thirds of minimum-wage workers so if you improve the minimum wage, you disproportionately bring women up,” Hartmann said.

Some economists and public policy experts criticize the pay gap as an imprecise indicator that fails to account for gender differences in education, occupation, work experience, job performance and intangibles such as career commitment and productivity.

“That number doesn’t give you that,” said June E. O’Neill, an economics professor at Baruch College and director of the Congressional Budget Office from 1995 to 1999. The gender gap is a reflection of “whoever happens to be working that year.’

Others view the gender pay gap as a valuable trend line, a measure of the impact of public policies, market forces and personal choices on women’s relative earnings. It is an important indicator, they say, of the ability of working women to support themselves and, especially with the rise in single-mother and two-income households, their families.

“I would certainly like to think that there are more opportunities now for women than there were a few years ago. Unfortunately, the statistics don’t bear that out,” said Alyson Reed, executive director of the National Committee on Pay Equity, a coalition of labor and civil rights groups.

“We all have the sense that things are getting better rather than worse, based on the fact that the economy has been booming,” Reed said. “My speculation is that the economic boom . . . did not raise all boats at the same rate.”

Adding to the pay gap mystery are the gains made in women’s earnings in preceding decades, particularly during the 1980s. Between 1979 and 1989, the ratio of women’s median annual earnings to men’s grew from 60.2% to 71.6%. A decade later, the ratio was 72.2%.

“The big pattern is that there was a marked, rapid, sustained progress in the 1980s, and the 1990s have been more uneven,” said Francine D. Blau, a professor and director of the School of Industrial and Labor Relations at Cornell University, who has written numerous books and articles on the pay gap.

Much of the earnings gains by women in the ‘80s were due to an increase in their job tenure, Blau said. Another factor was the decline of women as a portion of the clerical and service work force and their increase in professional and management ranks.

Women’s gains, however, were only part of the 1980s pay picture, according to an analysis by the Economic Policy Institute. Almost 65% of the closing of the gender gap in the ‘80s was a result of the decline in men’s wages as the era took its toll on male-dominated blue-collar jobs.

In the 1990s, the most dramatic departure from previous decades was the widening of the pay gap among 18- to 25-year-old workers, women and men born five years or more after President Kennedy signed the Equal Pay Act of 1963.

Young women workers had come to within 95% of their male counterparts in 1993, helping to narrow the overall gap significantly, according to recent research by Boushey, the EPI economist.

By 1999, the ratio of young women’s earnings to young men’s had slipped back to 92%.

“It’s obviously regressive,” Boushey said. “When these women turn 30, it could be worse for them than it is for women age 30 now. So it’s very disconcerting.”

Indeed, previous studies of the earnings gap have found that it typically widens as women enter prime child-bearing years.

Such findings are the basis of criticism of the wage gap and have led groups such as the Employment Policy Foundation to argue that the disparity owes as much to personal choice as anything else.

Young Workers Feeding the Gap

Boushey suspects changes at the top and bottom of the wage spectrum are behind the gap’s growth among younger workers.

“What I found was I thought quite astounding. In 1999, young white women were less likely to be going into high-tech jobs than in 1993,” Boushey said.

Indeed, during that period, the share of high-tech jobs held by white women declined 22%. Latinas’ share dropped even more. Young African American women and all young men increased their share of high-tech jobs. Young white men, for example, held 60% more of these jobs in 1999 than in 1993.

Young white women who did get high-tech jobs saw their wages rise 23%, compared with 9% for their male counterparts. Young African American women in high-tech work saw wages jump 42%.

“So there are huge wage incentives here, and yet young women are not taking advantage of [them],” Boushey said. “Is it that they are feeling discriminated against, that they don’t like the culture, the hours are too long, it’s too entrepreneurial and they want more stability?”

There were 360,000 young workers with high-tech jobs in 1999, so their influence on the overall earnings picture would be small, Boushey said. But other reports have reflected similar disparities between men and women in high-tech fields. In May, the White House Council of Economic Advisors reported that woman held about a third of the computer science, programming and computer operating jobs, and earned about 12% less than their male counterparts.

Martin Carnoy, a Stanford University economics professor, also sees evidence that the high-tech boom could be at least partially responsible.

“I think what happened is the incomes went up in certain areas that favored men, like information technology,” he said.

Boushey found another source of the widening gender gap among young low-wage workers. Here, she found the wages of African American women rose 1% between 1993 and 1999, much less than those of other groups, whose gains ranged from 5% for white women to 15% for African American men.

“I would argue that the fall in the real value of the minimum wage and welfare reform have dampened the wages of young African American women,” Boushey said.

7,056 Complaints to EEOC in 2000

Another factor is discrimination, although some estimate it could account for as little as 5% of the wage gap. Even that is a big problem, said Ida L. Castro, chairwoman of the Equal Employment Opportunity Commission, whose job it is to enforce laws prohibiting pay discrimination based on sex and race.

“There are a lot of women who face that problem,” Castro said. “When this country enacted the Equal Pay Act and the Civil Rights Act, it made a statement and that statement was any percentage is intolerable.”

Last year there were 7,056 wage discrimination complaints made to the EEOC. Pay parity advocates said the number of complaints could be even higher if workers had a right to review confidential wage information and if the Equal Pay Act provided for compensatory and punitive damages and attorney’s fees. As it stands, the act allows victims of gender-based pay discrimination to recover only back wages, which amounted to nearly $23 million in cases settled in 2000.

Castro attributed at least part of the sharp rise in complaints between 1999 and 2000 to a growing willingness among workers to share wage information as gender and racial pay inequities have become a concern for women and men.

“As families are competing in a fiercely competitive world of work, trying to retain their gains and continue to move ahead, it’s no longer just a women’s issue. It’s a family issue,” Castro said.

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Women’s Pay: Uneven Progress

After making strides in the 1980s, women’s gains in earnings, relative to men’s, stalled in the 1990s--puzzling economists.

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1963: President Kennedy passes out pens he used to sign a bill June 10 to provide equal pay for women.

1966: National Organization for Women is formed. NOW sponsored this Strike for Equality march in New York on Aug. 26, 1970.

1970s: 59-cent campaign pointed out that women made 59 cents for every dollar earned by men

1997: Women’s pay comes closest to men’s. Since then the number of gender-based wage discrimination complaints filed with the

Equal Employment Opportunity Commission has increased.

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Women’s annual earnings as a percentage of men’s from 1960 through 1999

1997: 74.2%

Sources: Census Bureau, Bureau of Labor Statistics, Equal Employment Opportunity Commission; Associated Press photos