“77 Cents” Statistic is Misleading

The Rally for Pay Equity (Clarissa Peterson, LCCR)

You may have heard the statement, “A woman makes 77 cents for every dollar a man makes.” Unfortunately, this may be one of the most misleading statistics ever used to allege discrimination – and yet it is constantly repeated by the government, politicians, and journalists. Even the Baylor Lariat editorial did so last week.

Let’s take a brief look at the numbers and analyze the studies that came up with this statistic. What do the studies by the Institute for Women’s Policy Research and the American Association of University Women (AAUW) measure? They measure the “pay gap” between men and women for full-time workers.

Here’s the problem. Anyone working 35+ hours a week is considered a “full-time worker”. Therefore, for purposes of these salary averages, a lawyer who works 80 hours/week is classified no differently than a teacher who works 4o hours/week. It is clear how this can easily lead to statistical fallacies. Simply factoring out the “hours worked” variable, regardless of occupation measured, eliminates almost half of the alleged “pay gap” right away.

Even organizations promoting the misleading “77 cents statistic” admit otherwise in their papers. For example, in the AAUW study mentioned above, the organization includes a small anecdote:

“After accounting for college major, occupation, industry, sector, hours worked, workplace flexibility, experience, educational attainment, enrollment status, GPA, institution selectivity, age, race/ethnicity, region, marital status, and number of children, a 5 percent difference in the earnings of male and female college graduates one year after graduation was still unexplained.” (emphasis added)

In other words, once incorporating these factors (many of them individual choices) the statistic is actually 95 cents on the dollar, not 77.

Diana Furchtgott-Roth has written a book on the issue, completely dismantling the misleading statistic touted by the media. According to Furchtgott-Roth,

“When economists compare men and women in the same job with the same experience, they earn about the same. Studies by former Congressional Budget Office director June O’Neill, University of Chicago economics professor Marianne Bertrand, and the research firm Consad all found that women are paid practically the same as men.”

Even as far back as 1969 and 1971, before anti-discrimination laws, studies found that unmarried women made more than unmarried men!

I am not saying discrimination is not a problem. There are instances all over the country where women face discriminatory situations. However, it is illegal, and there have already been many successful lawsuits. These actions should be handled on a case-by-case basis, not with a generalizing indictment or “call to arms” for pay equity.

President Obama likes to talk about his support for equal pay by using the Lily Ledbetter Fair Pay Act, claiming those who oppose it must have declared a “war on women.” In fact, the Ledbetter Act only extends the statute of limitations for the time a woman can sue her employer for unequal pay. Some would consider this a hardly revolutionary law.

When examining the facts, the focus should be on the real cases of discrimination. Thus it is better to pass up the opportunity to judge all Americans in an overarching rhetoric.

A variation of this article was originally published in the Baylor Lariat on 10/23/12.

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2 responses to ““77 Cents” Statistic is Misleading

  1. Thank you for laying this out, it’s a popular talking point without any legs to stand on. And its good to point out as you did, discrimination based on sex was made illegal decades ago. Reviving the issue is just a cheap attempt to skate on the residual energy of the original civil rights movement which was, now, a half century ago.

    • Agreed. I didn’t get a lot of online comments on this one, but I did get a lot of responses from people on campus. It’s good to see the facts making a difference.

      Thanks for stopping by!

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