Equal pay, equal truth?

I recently listened to a Freakonomics podcast about gender inequality in pay. I want to say right up front that I adore this podcast and I found there take fascinating. Yet still, what’s the real truth?

The literal statement that women make about 77 cents for each dollar a man earns is true, but it’s on the face of it a bad application of statistics. The figures being compared are the average compensation of each man and each woman, not taking into account any of the differences in jobs, time in the workforce and so on.

A prime speaker in the podcast was a female economics professor, Claudia Golden of Harvard, who talked about the apples to apples statistics when you compare men and women in the same profession and compensate for time in position and such. You don’t get equality, but the differences aren’t particularly stunning either. The disparity is on the order of 5% and she felt was largely explained by women taking jobs with greater flexibility.

Yet that isn’t the whole story either. Half the human race has 100% of the responsibility for continuing the existence of the human race. There are many entirely selfish reasons for even curmudgeonly older gentlemen to wish this to happen.

Without a younger generation there would be nobody to pay their Social Security. Social Security is a generational promise, but it breaks down if there isn’t another generation to pay it. The same goes for Medicare. It is, of course, a little unfair because young people, who have the least assets and pay, are forced to subsidize their elders regardless of their means, but the lack of a means test has been important in keeping Social Security the kind of program it is.

We therefore need children. We want to encourage women to have children. So we provide paid maternity leave right? Nope, we’re at the bottom of the heap in the US. We stand alone among our trading partners, and in the company of only three other countries in the world: Swaziland, Papua New Guinea and Lesotho in this. Needless to say providing fathers time to bond with their children is right out of the question. (you had to lookup Lesotho and Swaziland to know where they are right? I know I have to – right after I get done writing this)

A mom who wants to stay at home and raise children to the point where the school system can take over and actually wants two children and manages to get pregnant on clockwork (because, ya know, one can always count on this stuff happening on demand <- sarcasm), will likely be out of the workforce for seven years. After this she’ll find it harder to get hired and of course will, at best, be paid for her years of actual experience.

On the other hand there’s a 40% chance that she’s the head of household as the sole earner. Gone are the days where there was even a hint of validity to the trope of he needs to support a family, well, so does she!

On top of this we pile societal obligations on women. They are expected to go address problems with sick children and family members overwhelmingly, so the pressure is on them to get that more flexible job that doesn’t pay as well, even if there are those in the extended family who can handle the obligations without impact.

We used to be at the replacement rate of averaging 2.1 children per couple. Now we’ve dropped to 1.87, but not as bad as Germany’s 1.44 and they’re basically paying couple’s to have kids. Particularly scary are the population pyramids for countries like Japan.

Does it boil down to asking women to sacrifice decent equal wages for societal good, and what exactly makes that fair?

Last, there is a way to consider 77 cents on the dollar as a real number and not a misapplication  of statistics. It is, in fact, a measure of how we value women’s contribution to society in the economic sphere. Perhaps, despite the falsity of the implication, need to seriously consider the truth that lies within.


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