Gender pay gap persits

When the Equal Pay Act became law in 1963, women were earning 59 cents on the dollar compared to men. Today, while women hold nearly half of all jobs, and generate a significant portion of the income that sustains their families, they still face a gap in pay compared to men’s wages for similar work. Even now, women earn about 81 cents on the dollar compared to men — a gap that results in hundreds of thousands of dollars in lost wages. For African-American women and Latinas, the pay gap is even greater.

For more on Equal Pay, including tools, resources and recently announced Apps, see below:

 

 

Raise the Minimum Wage

A few remarks from a Nobel-prize winning economist on raising the minimum wage –

[The President has called for] a rise in the minimum wage from $7.25 an hour to $9, with subsequent increases in line with inflation. The question we need to ask is: Would this be good policy? And the answer, perhaps surprisingly, is a clear yes.

Why “surprisingly”? Well, Economics 101 tells us to be very cautious about attempts to legislate market outcomes. Every textbook — mine included — lays out the unintended consequences that flow from policies like rent controls or agricultural price supports. And even most liberal economists would, I suspect, agree that setting a minimum wage of, say, $20 an hour would create a lot of problems.

But that’s not what’s on the table. And there are strong reasons to believe that the kind of minimum wage increase the president is proposing would have overwhelmingly positive effects.

First of all, the current level of the minimum wage is very low by any reasonable standard. For about four decades, increases in the minimum wage have consistently fallen behind inflation, so that in real terms the minimum wage is substantially lower than it was in the 1960s. Meanwhile, worker productivity has doubled. Isn’t it time for a raise?

Now, you might argue that even if the current minimum wage seems low, raising it would cost jobs. But there’s evidence on that question — lots and lots of evidence, because the minimum wage is one of the most studied issues in all of economics. U.S. experience, it turns out, offers many “natural experiments” here, in which one state raises its minimum wage while others do not. And while there are dissenters, as there always are, the great preponderance of the evidence from these natural experiments points to little if any negative effect of minimum wage increases on employment.

Why is this true? That’s a subject of continuing research, but one theme in all the explanations is that workers aren’t bushels of wheat or even Manhattan apartments; they’re human beings, and the human relationships involved in hiring and firing are inevitably more complex than markets for mere commodities. And one byproduct of this human complexity seems to be that modest increases in wages for the least-paid don’t necessarily reduce the number of jobs.

What this means, in turn, is that the main effect of a rise in minimum wages is a rise in the incomes of hard-working but low-paid Americans — which is, of course, what we’re trying to accomplish.

Finally, it’s important to understand how the minimum wage interacts with other policies aimed at helping lower-paid workers, in particular the earned-income tax credit, which helps low-income families who help themselves. The tax credit — which has traditionally had bipartisan support, although that may be ending — is also good policy. But it has a well-known defect: Some of its benefits end up flowing not to workers but to employers, in the form of lower wages. And guess what? An increase in the minimum wage helps correct this defect. It turns out that the tax credit and the minimum wage aren’t competing policies, they’re complementary policies that work best in tandem.

So Mr. Obama’s wage proposal is good economics. It’s also good politics: a wage increase is supported by an overwhelming majority of voters, including a strong majority of self-identified Republican women (but not men). Yet G.O.P. leaders in Congress are opposed to any rise. Why? They say that they’re concerned about the people who might lose their jobs, never mind the evidence that this won’t actually happen. But this isn’t credible.

For today’s Republican leaders clearly feel disdain for low-wage workers. Bear in mind that such workers, even if they work full time, by and large don’t pay income taxes (although they pay plenty in payroll and sales taxes), while they may receive benefits like Medicaid and food stamps. And you know what this makes them, in the eyes of the G.O.P.: “takers,” members of the contemptible 47 percent who, as Mitt Romney said to nods of approval, won’t take responsibility for their own lives.

Eric Cantor, the House majority leader, offered a perfect illustration of this disdain last Labor Day: He chose to commemorate a holiday dedicated to workers by sending out a message that said nothing at all about workers, but praised the efforts of business owners instead.  The good news is that not many Americans share that disdain. We should raise the minimum wage, now.

Pay gap between men and women narrowing

According to the latest numbers released by the Bureau of Labor Statistics (BLS) last week, based on the weekly earnings of full-time wage and salary workers, women now earn 82 percent as much as men – up from 64 percent in 1980.

In recent discussions of the wage gap, a different figure – 77 percent – has been widely cited. That figure it also accurate, but the measure, which comes out in the spring, looks at median annual earnings for full-time year-round workers; it includes self-employed workers, which the weekly numbers exclude, and excludes seasonal workers. The figures are based on the same raw BLS data.

Most notably, in the BLS numbers released the day after Thanksgiving, the earnings of women between the ages of 25 and 34 have shot up fairly substantially over the past 32 years, from 69 percent of men’s earnings in 1980 to 92 percent in 2011.

The gap still widens, though, as women age – a sign that while many young women enter the workforce on a more equal playing field with their male counterparts, they still tend to fall behind on income as they age.

A recent study from Catalyst, a nonprofit organization that promotes women in the business world, found that women in the business world are offered fewer of the “hot jobs” – those jobs with high visibility, central to an organization’s mission, that tend to lead to promotions down the road.

The Catalyst survey of top MBA grads found that men led projects with budgets more than twice the size of women’s, with teams that were more than three times as large, and that posed a higher risk to the company. Men also had roles with significantly more critical responsibility – one reason, Catalyst suggests in its analysis, for the persistent gender gap at senior levels that exists in the business world.

The United States is one of the only countries in the world without any guaranteed paid maternity leave.

Without the subsidized childcare costs that many nations have, many mothers have to factor child-care costs in their decision whether to return to work, and often take a leave of absence – which they’re later often penalized for when they do return to work. And in a labor market where about half of US workers get no paid sick time at all, women are still most often the ones to skip work – and forgo pay – to stay home with sick children or other family members.

Young women, college and the wage gap

Don’t assume your first pay offer will be the same as what a similar male graduate will get. Fifty years after the Equal Pay Act was passed, studies continue to find a pay gap between men and women. Some of the difference – women earn about four-fifths of men’s pay – can be attributed to women choosing lower-paying fields, or women temporarily leaving the workforce to raise children, or women taking more part-time jobs.

But a comprehensive report by the American Association of University Women, released last week, zeroed in on a workforce segment that, theoretically, should be on par: women and men getting their first jobs after college graduation.

The finding: Nearly the same gender gap as for the workforce at large. Young women, on average, are earning 82 percent of what their male peers are earning one year after college graduation.

Again, the choice of major and profession makes a difference. Men are more likely to be in the higher paying engineering and science fields.

But even in comparable business and management positions, women are earning less. Among business majors, for example, the survey found women earning about $38,000, on average, compared to men’s average of $45,000.

So here are the career recommendations for women who are concerned about the gap:

Don’t count on equal pay laws. Be prepared to tackle the pay issue head-on. Women’s advocacy groups say most women aren’t as aggressive about negotiating pay as men.

Don’t blindly accept the first number a prospective employer offers. Know a reasonable, competitive pay amount – that you’ve researched through your campus career office or online pay sources such as salary.com – and don’t be afraid to negotiate before you accept the job.

Studies repeatedly show that if you start out behind your male peer it can make a lifetime pay difference of tens of thousands of dollars. And that can hurt your ability to repay student loans and, eventually, your retirement pay amount.