Equal pay for women

Equal pay for women is an issue regarding pay inequality between men and women. It is often introduced into domestic politics in many first world countries as an economic problem that needs governmental intervention via regulation. Generally, in third world countries due to cultural and/or religious reasons the pay disparity is much higher. However, there may be some exceptions.

Global Gender Pay Gap The report commissioned by the International Trade Union Confederation in 2008 shows clearly that, based on their survey of 63 countries there is a significant gender pay gap; on average 15.6%, which means that `women earn on average 84.8% of men's earnings' Women who are engaged in work in the informal economy have not been included in these figures. Overall, throughout the world, the figures for the gender pay gap range from 13% to 23%. This report argues that even when women are highly educated, that `higher education of women does not necessarily lead to a smaller pay gap; however, in some cases the gap actually increases with the level of education obtained' (Chubb, et al., 2008: 10). The report also argues that this global gender pay gap is not due to lack of training or expertise on the part of women since ` the pay gap in the European Union member states increases with age, years of service and education( ibid).

Pay Equity in Bahrain
Bahrain is sometimes provided as an example of a society where women earn more than men; according to a survey on gender pay inequality by the International Trade Union Confederation, female workers in the Gulf state earn 40% more than male workers (possibly due to very low female participation in paid employment).

United States Equal Pay Act of 1963
Legislation passed by the Federal Government of the United States in 1963 made it illegal to pay men and women different wage rates for equal work on jobs that require equal skill, effort, and responsibility and are performed under similar working conditions.

United Kingdom Equal Pay Act of 1970
The Equal Pay Act of 1970 was established by Parliament to prevent discrimination as regards to terms and conditions of employment between men and women.

A similar act to these was passed in France in 1972.

These reflected Article 119 of the original EEC Treaty, which started: "Each Member State shall in the course of the first stage ensure and subsequently maintain the application of the principle of equal remuneration for equal work as between men and women workers."

Ireland Anti-Discrimination (Pay) Act 1974
In Ireland the Anti-Discrimination (Pay) Act was passed in 1974 and came into force in 1977.

Gender Wage Equity in the United States
Economists expect that in free market capitalist economy managers should be eager to hire less costly women workers, thereby making the wage gap disappear. Therefore economists are puzzled why the wage gap persists. David R. Hekman and colleagues helped solve the mystery of why white men continue to earn 25 percent more than equally-well performing women and minorities. Hekman et al. (2009) found that customers who viewed videos featuring a black male, a white female, or a white male actor playing the role of an employee helping a customer were 19% more satisfied with the white male employee's performance and also were more satisfied with the store's cleanliness and appearance. This despite that all three actors performed identically, read the same script, and were in the exact same location with identical camera angles and lighting. Moreover, 45 percent of the customers were women and 41 percent were non-white, indicating that even women and minority customers prefer white men. In a second study, they found that white male doctors were rated as more approachable and competent than equally-well performing women or minority doctors. They interpret their findings to suggest that employers are willing to pay more for white male employees because employers are customer driven and customers are happier with white male employees. They also suggest that what is required to solve the problem of wage inequality isn't necessarily paying women more but changing customer biases. This paper has been featured in many media outlets including The New York Times, The Washington Post, The Boston Globe, and National Public Radio. However, some groups, such as the Independent Women's Forum, refuse to believe that the wage gap exists.

Differences in ability
Hedges and Nowell (1995) mentioned that male advantage in edges and Nowell (1995) performed a meta-analysis of national ability surveys that cover a 32-year period. Their primary conclusion is that male scores show greater variance in most abilities. The use of representative samples gives them reassurance that these differences in variance are true, and not the result of differential selection by sex. Their second finding is that average differences in most abilities are small. Exceptions include moderate to strong average advantages for men in math and science and typically male vocations, and moderate to strong average disadvantages to men in reading. They suggest the male advantage in measures of typical male vocations is not predictive, but that the other strong differences are. Thus, they are concerned about the relative disadvantage of men in writing and the disadvantage to women in science and math.

Time of Birth as the Primary Factor
A comparison frequently cited women make 75.3 cents on the dollar to men is derived from statistics maintained by the United States Census Bureau from 2003, relating specifically to an across-the-board comparison of year-round full-time workers. Series P-60 of the Current Population Reports maintains regular updates on the distribution of the American population by income, broken down by various demographic attributes, including age and gender.

A closer view of these statistics tends to show that both points of view have missed the mark in serious ways. Indeed, both aggregate statistics and the various methods of breaking down the work world by segments and doing side-by-side comparisons miss the most significant feature of the inequity—the time of birth: the generation or cohort of the population.

Once this is taken into account, the pattern of inequity in the United States becomes largely predictable. Therefore, it should be considered as the primary factor, with others that may be present derived from it. Indeed, much of what is otherwise attributed to this issue may rightfully be considered to already be subsumed by this single attribute. The society one is born and raised in, in large measure, conditions the values one is instilled with and, subsequently, the propensity toward choosing one or another type of career. Likewise, it conditions the attitudes of potential coworkers, underlings and bosses ... as well as those who would have the power to hire, promote or fire an individual.

In this way, both points of view are incorporated as corollaries.

Three interesting features stand out, when the demographics are broken down by time of birth:
 * 1) For a given generation, the relative wage disparity tends to remain the same over time. Overall, there is a slight downward trend, but compared to nearby generations, the difference is not that significant.
 * 2) The disparity does not have a history of having steadily diminishing over time. In fact, it reaches its maximum with the generation preceding the baby boom generation, bottoming out for those who reached their 20th birthday in the mid 1950s.
 * 3) Following this generation, there is an abrupt transition going from generation to generation. Roughly speaking, for the baby boomers' parents, it's around 60 cents on the dollar; for the baby boomers, about 70-75; for those who reached their 20th birthday in the mid 1980s, about 80-85; and for the youngest workers today, it's reached and passed 95 cents on the dollar.

The momentum does not show significant signs of abating, and it is very close to linear. If extrapolated, based on the figures for these generations drawn from the 1970, 1975, 1980, ..., 2000 compilations, it shows an indication of reaching and exceeding 100 cents on the dollar by around 2010.

The best linear fit done based on the P-60 figures for 1980-2000 (and 2001 and 2002) for those born on or after 1945 included 38 data points and a 90% goodness of fit. The P-60 figures used broke down the 15-25 group into 15-20, 20-25 in 1985, but aggregated them for the other dates. The remaining age groups were segmented into 5 year ranges (25-30, 30-35, etc.). The linear fit has the characteristics A quadratic fit shows a slight tendency toward leveling off.
 * 77.01 cents on the dollar in 1995 for someone whose 20th birthday was in 1980
 * 3.26 cents on a dollar decrease per decade, for each generation
 * 8.96 cents on the dollar increase per decade in time of birth

Another lesser trend (which may be a product of the small sampling size of the P-60 data for the age group in question and large statistical fluctuations resulting from it) is that there is a noticeable upturn in relative wage equity for the oldest workers, whose 20th birthdays preceded the 1950s. This is not just with respect to generation, as already noted above, but also over time. The 2000 P-60 figures for those who reached 20 before 1950 indicate a relative wage level of about 80 cents on the dollar (but 77 in 2001, 70 in 2002, 65 in 1995).

Based on the P-60 data, the following "dividers" may be noted, based on the current age and the period in question:

For 70 cents on the dollar:
 * In 1970: ages 30 and below
 * In 1975, 1980: 25 and below
 * In 1985, 1990: 30 and below
 * In 1995: 40 and below
 * In 2000: 45 and below
 * (In 2002: 50 and below)

This list excludes those born before 1925, whose members tend to be above the 70 cents on the dollar divider, but where the above-noted fluctuations occur.

For 80 cents on the dollar:
 * Before 1980: Non-existent
 * 1980, 1985: ages 25 and below
 * 1990: 35 and below
 * 1995, 2000: 30 and below
 * (In 2001: 35 and below)

For 90 cents on the dollar:
 * Before 1985: Non-existent
 * 1985: ages 20 and below
 * 1990, 1995, 2000: 25 and below
 * (In 2001: 30 and below)

The disparity seen in the aggregate 75 cents on the dollar (or whatever figure is quoted) is thus seen to arise because the baby boomers and their parents are pulling down the average. However, as they are now reaching retirement age, this masking effect will be removed, and the abrupt transition seen from generation to generation will come to be reflected in a similar abrupt transition in the overall average.

The Possibility of a Coming Reversal in Gender Wage Gap Inequity
The momentum of the change has been dramatic with the most recent generations. However, a closer look at the figures shows that—at present—we are still in the linear region of the transition, with little sign of a slowdown yet. Therefore, the possibility arises that there may actually be a reversal in the coming decades, with women outearning men in the aggregate.

This is the most important aspect of the overall picture missed by the two prevailing points of view. While the discussion continues on why the inequity "still exist", the most recent changes in the world are blindsiding all involved.

A dramatic picture of this change—particularly how it is being masked under the weight of the baby boomer generation and older world—is seen in the TV news sector. An aggregate comparison of women's and men's salaries for TV news anchors shows that women are making 38% less than men overall (as of 2000), yet women are outearning men at each age range.

This is an example of Simpson's paradox. The complete disconnect between aggregate and age-related figures is actually somewhat predictable as a consequence of the gender shift that has taken place in this field. The vast majority of graduates from Communications schools in the United States are now female. Yet, there is still a significant vestige from the older, male-dominated, era—particularly at the highest positions in the field. The net result is not only a gap in the average ages (29 for females, 38 for males) but, with the influx of women from the colleges, a widening in the age gap, and very likely the aggregate wage gap, itself!

This widening is, therefore, actually a precursor of a forthcoming reversal in the direction of movement, rather than a sign of a worsening situation.

The time inevitably comes when the older generations must leave the field—whether by the attrition of retirement or death. In the national TV news arena, this has already started to happen. With the departure of the older cohort, the masking effect of the pulling down of the average by the baby boomers' and earlier generations will be removed, resulting in what will appear to be a sudden upswing in the aggregate wage gap and even a reversal.

Reference:
 * Gender Gaps and Factors in Television News Salaries, Vernon Stone

Detailed Comparisons
The following data, derived from the Current Population Report, Series P-60, shows in greater detail the progression of the wage gap over time. The birthdates are taken as of March of the following year, the original P-60 data was arrived at by estimation of distributions. The standard error is around 1-2% until later ages around the 60's and beyond, where it shoots up to around 5-10%.

On average, females are paid five thousand dollars a year less than males. Sources for this and further data may be found in the following:
 * U.S. Census Bureau; Current Population Reports, Series P-60
 * 1970: 80 Table 49
 * 1975: 105 Table 47
 * 1980: 132 Table 50
 * 1985: 156 Table 34
 * 1988-1990: 174 Table 24
 * 1990-1992: 184 Table 24
 * 1993: 188 Table 5
 * 1995: 193 Table 7

References earlier data on-line may be found in the following: and for recent years
 * 1970-1991

In the following tables, the starting years of the age ranges are listed. Most listings are for 5 year intervals, though some were aggregated over 10 year intervals. For the older age groups, the aggregation goes the starting age on up. Some figures may need to be more closely investigated, such as the 1970 quote of 72 cents on the dollar for 25-35 year-olds. The median earnings are in US dollars, no adjustment made for inflation.

Canadian Legislation
In Canadian usage, the terms pay equity and pay equality are used somewhat differently than in other countries. The two terms refer to distinctly separate legal concepts.

Pay equality, or equal pay for equal work, refers to the requirement that men and women be paid the same if performing the same job in the same organization. For example, a female electrician must be paid the same as a male electrician in the same organization. Reasonable differences are permitted if due to seniority or merit.

Pay equality is required by law in each of Canada’s 14 legislative jurisdictions (ten provinces, three territories, and the federal government). Note that federal legislation applies only to those employers in certain federally-regulated industries such as banks, broadcasters, and airlines, to name a few. For most employers, the relevant legislation is that of the respective province or territory.

For federally-regulated employers, pay equality is guaranteed under the Canadian Human Rights Act. In Ontario, pay equality is required under the Ontario Employment Standards Act. Every Canadian jurisdiction has similar legislation, although the name of the law will vary.

In contrast, pay equity, in the Canadian context, means that male-dominated occupations and female-dominated occupations of comparable value must be paid the same if within the same employer. The Canadian term pay equity is referred to as “comparable worth” in the US. For example, if an organization’s nurses and electricians are deemed to have jobs of equal importance, they must be paid the same. One way of distinguishing the concepts is to note that pay equality addresses the rights of women employees as individuals, whereas pay equity addresses the rights of female-dominated occupations as groups.

Certain Canadian jurisdictions have pay equity legislation while others do not, hence the necessity of distinguishing between pay equity and pay equality in Canadian usage. For example, in Ontario, pay equality is guaranteed through the Ontario Employment Standards Act while pay equity is guaranteed through the Ontario Pay Equity Act. On the other hand, the three westernmost provinces (British Columbia, Alberta, and Saskatchewan) have pay equality legislation but no pay equity legislation. Some provinces (for example, Manitoba) have legislation that requires pay equity for public sector employers but not for private sector employers; meanwhile, pay equality legislation applies to everyone.