Tuesday, May 01, 2007

The Gender Gap is Crap

One year after graduation, women earn just 80% of their male counterparts. Ten years after graduation women earn only 69% of what men earn screams a study from the American Association of University Women Educational Foundation.

This is disturbing says the report since it must be down to sexual discrimination.

"We need to make workplaces more family-friendly, reduce sex segregation in education and in the workplace, and combat discrimination that continues to hold women back in the workplace."

Fortunately Mark Perry, a professor of finance and business economics at the University of Michigan is around to compare apples with apples. He demolishes this report page by page;

1. Sex discrimination is illegal under the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964. If the AAUW allegedly found thousands of cases where women make 80% of what men make one year out of college with the exact same credentials, and thousands of cases where women make 69% after ten years with the exact same qualifications, why not bring legal action to correct this discrimination?

2. If profit-seeking corporations can hire women with one year experience for 20% less than equally-qualified males, or a women with ten years experience for 31% less than equally-qualified men, they would have to be blinded by sex discrimination to pass up the opportunity to save 20-30% on their labor costs. They would hire ONLY women, and NO men

3. A year out of college women in full-time jobs work an average of 42 hours a week, compared to 45 for men. In other words, men work 7% more hours per week than women

4. Ten years after graduation, 39% of women are out of the work force or working part time -- compared with only 3% of men, mostly because of marriage and motherhood.

5. The AAUW report did acknowledge that college-educated women tend to go into fields like education (12% of women versus just 5% of men), psychology and the humanities, which typically pay less than the sectors preferred by men, such as engineering (13% of degrees by men versus 2% of women), math and business. The average salary of a liberal arts major (which includes the fields identified by the AAUW as preferred by females) is $31,333 which is only 58% of the average salary for engineering majors, 62% of the average salary for finance/economics, 63% of the average salary for computer science/MIS and 66% of the average salary for accounting majors.

6. There is no pay gap among single, full-time workers age 21 to 35, who live alone.

7. Among people ages 27 to 33 who have never had a child, the earnings of women are about 98% of men's.

8. Never-married women in their 30s who have worked continuously earn slightly higher incomes than their male counterparts.

9. Men spend only 1.6% of all potential work years out of the workforce, while women spend 14.7% of potential work years away from work.

10. A woman's lifetime earnings are lowered 13% by having her first child, and 19% by having her second.

Bottom Line: Here is what the AAUW didn't report: Median annual earnings of men and women age 25 to 34 with bachelor's degrees in the same field are roughly equal. In other words, there is no "pay gap," once you control for ALL factors that affect earnings, and compare apples with apples.

via Tim Worstall