Everyone is aware there is a wage gap. If you are unaware, here is a quick update. Men earn more than women – it’s a fact (according to most). It is calculated that women earn as much as 21.7 percent less than their male counterparts.
According to an article by Fortune, this gap is a detriment to all, not just women. This disparity in wage is claimed to be part of the reason we see poverty among working single mothers. Fortune also claims that the wage gap actually widened in 2015, which shorts women up to $500k over the life of their career and won’t pay women equal pay for another 117 years.
I am sure the numbers have some validity, however, the article doesn’t broach the question, “Why is there a wage gap?” or better yet, “Is there really a wage gap?”
My suspicion is that maybe we are just looking at wage discrimination. Much like price discrimination is good for selling products across multiple demographics, wage discrimination is good for hiring across multiple demographics. These demographics can range from location, ethnicity, and even sex. So rather than assuming companies are acting like men from the 1940’s and 50’s, we should be analyzing labor numbers.
Let’s take a look at 78.3 percent, which is the percentage of income women make compared to men. Now take a women that works full-time, all year, and divided it by the median annual earnings for the year and you come to 78.3 percent or something close to that, depending on where you get the numbers. What this calculation doesn’t take into consideration is individuals. Instead of measuring across the workforce as a whole, shouldn’t we be looking at individuals with similar attributes? If we take a man and woman with similar education, labor-force participation rates, and productivity attributes, do we still see the 21.7 percent gap in wages? Studies show that we don’t, and that in reality the number is significantly smaller.
So if it’s not sexism, what is it?
In the end what is found is that women want different things than men. Women are more prone to taking time off rather than pay raises. Women would rather not join the rat race and stay late every night. They have family as more of a priority than men do. This difference in priorities results in women working less hours, and getting fewer promotions, which in turn lowers their earning potential. I propose that instead of calling it a “wage gap,” we should more appropriately call it a “priorities gap.”
Here Are 5 of the Most Infuriating Facts About the Wage Gap