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Why Women Are No Longer Catching Up To Men On Pay

This is In Real Terms, a column analyzing the week in economic news. Comments? Criticisms? Ideas for future columns? Email me, or drop a note in the comments.


If you were an American man working full-time in 1984, you earned, on average, a bit more than $22 an hour (adjusted for inflation to 2014 dollars). If you were particularly ambitious, or particularly in need of cash, you could make more money by working more hours, but on a per-hour basis, you’d still be making about the same — a bit more than $22 per hour.

Fast-forward to 2015, though, and the picture looks a lot different. The average man working a typical full-time job, 35 to 49 hours a week, now earns about $26 an hour. But the man working 50 hours a week or more now earns close to $33 an hour.1 Hourly pay has risen more than twice as fast over the past three decades for men working long hours, as employers increasingly reward employees willing to work extra hours with raises or promotions. (The pattern crosses educational and industry lines, and holds when excluding overtime pay.)

Notice that I said “men.” Men make up a bit more than half the full-time workforce, but they account for more than 70 percent of those working 50 hours a week or more. So as wage gains have gone disproportionately to people working long hours, they have also gone disproportionately to men, widening the earnings divide between men and women overall.

The gender wage gap has narrowed significantly over the past 50 years. In 1964, according to data from the Census Bureau, the typical woman working full time made about 59 cents on the dollar earned by a man; by 2004, that had risen to 77 cents. (These calculations don’t take into account differences in experience, industry or other factors.) More recently, however, progress for women has nearly stalled out: In 2014, the latest data available, women earned 79 cents for every dollar earned by men, a 2-pennies-an-hour improvement over a decade.2

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Other measures of women’s progress in the workforce — their rate of employment, the likelihood that they will work in a historically male-dominated field, the rate at which they run big companies — show a similar pattern of what researchers Martha J. Bailey and Thomas A. DiPrete, in a new essay, call “five decades of remarkable but slowing change” for American women.

Bailey and DiPrete’s essay serves as the introduction to a remarkable new collection of papers from the Russell Sage Foundation that examines the progress that women have — and haven’t — made over the past half-century. It isn’t a simple story. The U.S. has already made major, albeit incomplete, progress on many of the most obvious causes of gender inequality — explicit discrimination on pay,3 overt barriers to employment, taboos against working while raising children. What is left is a tangle of cultural norms, implicit biases, individual preferences and other, subtler forms of discrimination that are much harder to change or even to measure.

Take the long-hours anecdote I described above. The rapid rise in pay for people working long hours has played a major role in the persistence of the overall gender wage gap, particularly for parents; new research in the Russell Sage Foundation volume estimates that the wage gap between mothers and fathers would be 15 percent smaller if the extra-hours increase hadn’t occurred. But that premium itself isn’t the result of discrimination, explicit or implicit; women who work long hours have seen even faster gains than men (although they still earn less on average).

Rather, the trend contributes to the wage gap because men are so much more likely than women to work those long hours. That, in turn, is the result of a confluence of factors that are deeply embedded in the American economy and society: Women, on average, spend much more time than men on housework, while men — especially a certain category of highly educated, elite men — are expected to work as much as possible. And of course, most importantly, mothers are still far more likely than fathers to be the primary caregiver for their children. Government policies could make a difference — affordable child care, for example, could make it easier for women who want to work long hours to do so — but they can only go so far.

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The Russell Sage Foundation papers are full of such thorny issues. A rising share of the gender wage gap is driven by “pre-market” factors such as choice of industry and occupation; those issues can also be the result of explicit or implicit discrimination but are much harder to address than wage differentials within a given job. And even forces that should help close the gap, such as education, have proved insufficient: Women have for decades been more likely to attend college than men — there are now for the first time more female than male college graduates — yet the pay gap is widest among the most educated workers. Girls now outperform boys in many science and math subjects in high school, but women are still much less likely than men to work in many of the most lucrative technical fields; women have actually lost ground to men in computer science in recent decades. And the overall rate of “occupational desegregation” — women entering traditionally male-dominated fields and vice versa — has slowed.

There are some encouraging signs for women. Those who do go into science and technology fields earn nearly as much as equally experienced men (though that isn’t true in computer science), suggesting the overall wage gap would narrow if more women entered so-called STEM fields. Moreover, the “motherhood penalty” — the relative decline in wages for women when they have children — has disappeared or even reversed for highly paid, highly educated women, perhaps because they are the most likely to have access to (and be able to afford) child care. That suggests that making child care more widely available could help narrow the gender pay gap for less-educated women, too — something that is looking more likely now that both major presidential candidates are advocating affordable-child-care plans. Culture is changing, too: Men are taking on a larger share of child-rearing responsibilities, though the division is still far from equal.

Still, the overall picture painted by the Russell Sage Foundation research is one of slow, grinding and unsteady progress, and of barriers that are hard to define and even harder to resolve. Hillary Clinton may be poised to crack the ultimate glass ceiling, but true gender equality remains a long way off.

The Olympic tax

Speaking of high-earning (and high-flying) women, the internet was abuzz this week with stories about the hefty tax bill that gymnast Simone Biles and other Olympic medalists will face when they get back from Rio. The BBC estimated Biles will owe more than $40,000. A bipartisan bill to exempt Olympic winnings from taxes is gaining momentum in Congress.

But the whole issue is getting blown out of proportion. The U.S. Olympics Committee awards bonuses to American medal winners: $25,000 for gold medals and smaller amounts for silver and bronze. Biles, with her five medals, will receive $110,000, which in theory could put her on the hook for more than $40,000 in taxes. (The medals themselves are also taxable, but their actual value is modest.) But it’s unlikely she’ll actually owe that much because Biles and other Olympians can deduct the cost of their training on their taxes. And in the case of high-profile Olympians such as Biles and swimmer Michael Phelps, their actual winnings are dwarfed by far more lucrative (and very much taxable) endorsement deals. By the time Biles cashes all those checks from Procter & Gamble, her Olympic tax bill will probably look like a rounding error.

The Fed

Newly released minutes from the Federal Reserve’s July meeting this week suggest that Board Chair Janet Yellen and her colleagues are still weighing whether to raise interest rates in September or wait until the economy improves further. Separate comments from key Fed officials this week indicated that new data since the Fed’s meeting hasn’t resolved the question.

The Fed is in a tricky spot. The job market continues to show strength; May’s weak employment report looks more and more like a blip. But overall economic growth has been disappointing, and there have been recent signs that consumer spending — a key pillar of strength in recent months — is beginning to weaken. Then there is the election, which complicates the Fed’s task in two ways: Policymakers don’t want to intervene too close to the election, lest they appear to be trying to influence the outcome, and they also have to grapple with the possibility that the election itself, and the uncertainty around it, will affect the economy. Most economists still think the Fed will wait until after the election is over to raise rates.

Number of the week

Back in July, I wrote about the long-term decline in teen summer employment, particularly among lower-income youths. A report from the Bureau of Labor Statistics this week indicates the recovery is gradually reversing that decline: 53.2 percent of Americans ages 16 to 24 had jobs in July, up from 52.7 percent last year and 50.7 percent in 2013. The report didn’t break out teens specifically, but a look at the underlying data shows that the employment rate for teens rose, too. Moreover, the employment gap between low-income and more affluent teens narrowed somewhat, the latest sign that the improving economy is gradually benefiting the most vulnerable workers.

More from us

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Elsewhere

Wal-Mart’s cost-saving mania is great for consumers and investors. Less so for local police departments, who are struggling to respond to the crimes that occur in the stores every day, write Shannon Pettypiece and David Voreacos in Bloomberg Businessweek.

Antitrust law tends to focus on monopolies’ impact on consumers. But economist Marshall Steinbaum argues the increasing consolidation of many U.S. industries also contributes to rising inequality.

The most widely cited measure of poverty among grade-school students — eligibility for free and reduced price lunch — substantially understates the level of inequality in the U.S. school system, writes Susan Dynarski in The Upshot.

The Los Angeles Times takes a deep look at U.S. poverty and how Americans view it.

CORRECTION (Aug. 19, 10:22 a.m.): An earlier version of a chart in this article was incorrectly labeled. It shows the gender-pay gap in terms of annual earnings, not hourly earnings.

Footnotes

  1. These calculations are based on my own analysis of Current Population Survey microdata, via the Center for Economic Policy Research. The approach is based on that used by Kim A. Weeden, Youngjoo Cha and Mauricio Bucca in their forthcoming paper from the Russell Sage Foundation.
  2. Other data sources and definitions show somewhat different ratios but the same basic trend.
  3. Estimates for the amount of outright wage discrimination — a woman making less than an equally qualified man in the same job — vary by industry and by who is doing the analysis. But most economists agree on two things: The gap is much smaller than it used to be but hasn’t disappeared.

Ben Casselman is a senior editor and the chief economics writer for FiveThirtyEight.

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