There really is no ‘gender wage gap.’ There’s a ‘gender earnings gap’ but ‘paying women well’ won’t close that gap

Mark J. Perry
AEI

Here’s Tim Worstall writing in Forbes today (“Facebook’s Sheryl Sandberg Wrong Here – Just Paying Women More Won’t Close Gender Pay Gap“), emphasis added:

The idea that we can close the gender pay gap just by paying women more seems reasonable enough, as Facebook’s Sheryl Sandberg (pictured above) has intimated on BBC radio. Sadly though this isn’t in fact the correct answer. The gender pay gap does not exist because men and women are paid less for the same jobs, it exists because men and women tend to do slightly different jobs. When equal jobs being done out there is reached then we will have gender pay parity. Because, as before, we already have the same pay for the same job.
This thus is wrong, or at best an incomplete understanding of the issue:

Fairer pay for women must be backed up by stronger policies at work, according to Facebook’s Sheryl Sandberg. But the firm’s chief operating officer, in an interview for BBC Radio 4’s Desert Island Discs, said the first step is to “start paying women well.”

That’s rather to put the cart before the horse for the company of course. Why would anyone just want to have to pay more wages? But it’s also to miss the actual construction of the gender pay gap itself. It simply is not that a woman and a man doing exactly the same job get different pay because of their genders. Quite apart from anything else that is illegal and in a society as litigious as ours if it were happening on any scale we’d never be able to use the courts for anything else. Half the legal profession would be taking such cases on contingency fees.
What does happen is that men and women slightly end up doing different jobs and more than that there’s a large difference in the number who climb the greasy pole to the top. It isn’t that, say, female senior managers are paid less than male senior managers it’s that there are fewer female senior managers than male. This hugely skews those average figures like the 77 cents per dollar that are bandied about.

Sandberg, the chief operating officer of Facebook, told BBC Radio 4’s Desert Island Discs on Sunday she believed job openings should be contested by equal numbers of women and men.

“We need to start paying women well and we need the public and the corporate policy to get there,” she said. “Certainly, women applying for jobs at the same rate as men, women running for office at the same rate as men, that has got to be part of the answer.”

The other half of that proposal is absolutely correct given the above analysis. As and when there are equal numbers of each gender doing the same sorts of jobs to the same sort of level then there will be no gender pay gap.

MP: It’s an important, but overlooked point that there really is no gender wage gap, rather, there’s a gender earnings gap and that pay gap has almost nothing to do with gender discrimination. That is, there is almost no evidence that men and women working in the same position with the same background, education and qualifications are paid differently. Whether it’s the Target Corporation, Facebook, the University of Virginia, the United Way, the White House or McDonald’s, there is almost no evidence that any of those organizations have two pay scales: one for men (at a higher wage) and one for women (at a lower wage). Of course, that would be illegal, and if that practice existed, organizations would be exposed to legal action and “half the legal profession would be taking such cases on contingency fees” as Tim points out.

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