Gender and Wage Discrimination
Andre Gardiner writes:
Last Thursday I attended and summarized an AEI event on gender and racial disparity in wages. Panelists on both sides of the political spectrum joined AEI scholar and City University of New York’s Baruch College professor June O’Neill to discuss her and Dave O’Neill’s new book, “The Declining Importance of Race and Gender in the Labor Market.”
Professor O’Neill argued that the gender wage disparity of roughly 23 cents on the dollar was the product of education, job experience, and personal choices, not labor market discrimination. This point was reiterated by Diana Furchtgott-Roth of the Manhattan Institute, who pointed to college major selection, job choice preferences, and child-rearing decisions as the causes of the wage gap.
Professor O’Neill and another panelist, Michael Meyers of the New York Civil Rights Coalition, also went into some detail about the changing definition of discrimination by the Federal Government. O’Neill argued that while the Federal Government had a very large impact on the gap in the Jim Crow era, today it had absolutely no effect.
The main dissenter on the panel was Professor Harry Holzer of Georgetown University. While Professor Holzer had many points (see below), he mainly argued that the Professor O’Neill cherry picked evidence and was too strong in her conclusions.
The Q&A section, which produced the most vibrant discussion focused on discrimination in hiring. Event attendees and Professor Holzer pointed to audit studies that show that employers are less likely to respond to resumes from people with black sounding names. Discrimination Audit Study (Interesting Read)
Professor O’Neill pointed to Gary Becker’s theories on discrimination to respond to that point. Becker, a Chicago economist, argued that in competitive markets, discriminatory firms would become increasingly uncompetitive as they lost talented applicants to rivals. Gary Becker Discrimination Theory
Additionally, another AEI scholar in attendance, Christina Hoff Sommers, spoke to the crowd about the accuracy of audit studies. Christina argued that audit studies were difficult to replicate that that results tended to fluctuate quite a bit from study to study.
My Take: I generally agree with Professor Holzer’s statements on the strength of Professor O’Neill’s assertions. Academic work is fundamentally uncertain, and the book doesn’t take this into account. However, the idea that the wage gap is $0.23 cents on the dollar is quite preposterous, and more needs to be done to dispel that claim. Also, I think it should also be noted that unexplained differences does not mean sexism or racism is the cause, it just means that our models can’t explain the difference.
I agree with you Andre that $.23 is crazy! I think it becomes hard sometimes to figure out what exactly is the cause in the differences. Sometimes its not even education, personal experiences, etc it is just plain racism or sexism, however other times it could be those factors, and people mislabel them as forms of racism and sexism. I think sometimes that the idea of racism and sexism (particularly in the workplace) is such an uncomfortable and for some people a thing of the past that they don’t want to talk about or can’t accept that it is real. It seems to me that racism and sexism in the workplace can be so invisible, but at the same time so apparent that people think it’s not real. That doesn’t mean it’s not happening.
I Agree, Andre, 23 cents is ludicrous. Although the point of a model is to provide a plausible explanation for the subject studied, it can’t account for everything. Sexism and racism should not be the causes of a wage gap; however, it could be possible. Although affirmative action makes employers considerate every qualified individual regardless of sex and ethnicity for a job, it doesn’t mean that they will hire them for the sake of being an underrepresented minority or a woman. This could lead that although these applicants are in their list of potential employable people, they could simply discard them for someone else with similar credentials and feel would “fit” better. Thus, it is possible but not necessarily true; it is an measurable and invisible factor
I too must agree that $.23 on the dollar is a ridiculous difference. From what I gather, it seems Professor O’Neill is arguing that this income gap is due to differing rates of education, job experience, and personal choices of women. However, the Bureau of Labor Statistics has seen that even in industries where men and women are working the same job with similar qualifications, women tend to earn less – especially in private industry and Managerial/CEO positions. Out of the 534 occupations listed by the Bureau of Labor Statistics, women out-earn men in only 7 of them. Even when you adjust for the percentage of women vs. men in the labor market, this doesn’t exactly paint a fair picture. I definitely agree that there’s more going on than just differing qualifications.
See http://www.bls.gov/cps/cpswom2011.pdf
http://www.americanprogress.org/issues/labor/news/2013/04/09/59698/the-gender-wage-gap-differs-by-occupation/