Alas, a Blog

(This is one of a series of posts on the wage gap.)

In this post, I’ll address a very simple question: what evidence is there that economic discrimination against women currently exists in the USA? Reading the works of conservatives like Christina Hoff Sommers, one gets the impression that economic discrimination against women might not exist at all, nowadays. Unfortunately, that’s not true.

This post won’t even come close to describing the hundreds of academic papers and news reports which have found evidence of discrimination against women. Instead, I’ll be looking at just a few examples that clearly demonstrate that economic discrimination against women, contrary to the claims of the anti-feminists, is a real problem.

Audits

What happens if two otherwise identical people, one male and one female, apply for the same job? This is one of the clearest ways of showing discrimination. If discrimination never happens, then otherwise identical men and women would get identical results in the job market.

Of course, in the real world, no two people are ever identical. But researchers can fake it. For instance, economist David Neumark[1] conducted an “audit study.” “The purpose of an audit study is to provide much more direct evidence on discrimination than is provided by other empirical methods.” Male and female job applicants, chosen for similar characteristics, and trained to act in similar ways, applied in pairs for waiter positions in restaurants in Philadelphia. The applicants used fictional resumes that had been designed to show equal qualifications for a waiter position.

The results? 85% of the job offers from high-price restaurants (where wages are correspondingly high) were made to male job applicants. In contrast, 80% of the job offers from low-price, low-wage restaurants were made to women. This is clear evidence of sex discrimination in employment – evidence which might explain how it is that waitresses in the United States are paid only 75% of what waiters make.

Job Applicants Without Sex

The economists Claudia Goldin and Cecilia Rouse, in a paper for the National Bureau of Economic Research,[2] asked an interesting question: do female musicians have a better chance of being hired when the judges don’t know their sex? Using data from actual audition records, they found that blind auditioning “increases by 50%” a woman’s odds of getting past preliminary auditions, and by several times increases the chance that a woman will win the final round of auditions. As much as 55% of the increase in women in symphony orchestras since the 1970s is due to the use of blind auditions.

Pay Differences Among the Highly Paid

Anti-feminists often complain that feminists don’t account for important economic factors – such as “occupation, age, experience, education, and time in the work force”[3] – when comparing male and female pay. Curiously, however, the anti-feminists themselves ignore many studies that account for all these factors and more, and still find a wage gap. Moreover, they often include economically irrelevant factors – such as comparing only the wages of very young women and men, as if discrimination among people ages 33 and up isn’t something we should be concerned with. (To read more about this, click here.)

One of the best studies of the sort the anti-feminists urge, considering as many economically relevant factors as possible, was done by the economists Robert Wood, Mary Corcoran and Paul Courant.[4] By looking at a very specific and detailed sample of workers – graduates of the Michigan Law School – they were able to examine the wage gap while matching men and women for many other possible explanatory factors – not only “occupation, age, experience, education, and time in the workforce,” but also childcare, average hours worked, grades while in college, and other factors.

The result? Even after accounting for all that, women still are paid only 81.5% of what men “with similar demographic characteristics, family situations, work hours, and work experience” are paid.

Department of Labor Audits

Federal contractors are periodically examined by the Department of Labor to see if they are complying with federal laws requiring equal treatment of female and male employees. According to the National Committee on Pay Equity, the DOL still needs to order companies to halt their unequal treatment of women. The NCPE website gives some examples:

• Texaco, which agreed to pay $3.1 million to 186 female employees who were found to be systematically underpaid compared to their male counterparts.
• Trigon Blue Cross Blue Shield, which paid $264,901 in back pay to 34 women managers who were paid less than male managers of equal qualifications and seniority.
• US Airways, which agreed to pay $390,000 in back pay and salary adjustments to 30 women managers who were paid less than their male coworkers.
• Corestates Financial Corp., which agreed to pay nearly $1.5 million in back wages and salary adjustments to women and minorities. The Labor Department found instances in which employees with more seniority or better performance reviews were paid less because they were women or minorities.

EEOC lawsuits are also worth considering. According to HR Magazine (May 2005), “At least 24,000 sex discrimination complaints have been filed with the EEOC each year since 1998, and the dollar figure for settlements during the same time period has nearly doubled. In 2004 alone, the EEOC resolved more than 10,000 sex discrimination complaints in favor of the charging party and recovered $100.8 million in monetary benefits for charging parties and other aggrieved individuals (not including monetary benefits obtained through litigation).”

Women get less credit for their work.

It’s long been believed by feminists that women often need to accomplish more than men in their field to be given the same credit. A recent study of scientific credit, published in the journal Nature, seems to prove the feminists right.[6]

What the Nature study did was examine productivity (measured in terms of publications in scientific journals, how many times a person was a “lead author” of an article, and how often the articles were cited in scientific journals) and sex. Publication in peer-reviewed scientific journals is often considered to be the most objective and “concrete” sign of accomplishment in the sciences. These factors were then compared to how an actual scientific review panel measured scientific competence when deciding which applicants would receive research grants. Receiving grants like these are essential to the careers of scientific researchers.

The results? Female scientists needed to be at least twice as accomplished as their male counterparts to be given equal credit. For example, women with over 60 “impact points” – the measure the researchers constructed of scientific productivity – received an average score of 2.25 “competence points” from the peer reviewers. In contrast, men with less than 20 impact points also received 2.25 competence points. In fact, only the most accomplished women were ever considered to be more accomplished than men – and even then, they were only seen as more accomplished than the men with the very fewest accomplishments.

Other studies have found similar results. [7]

Discrimination against female consumers.

Most research on economic discrimination has been concentrated on work and working. However, there are other kinds of economic discrimination which should be considered, such as discrimination against consumers. In her book Why Women Pay More, Frances Cerra Whittelsey detailed many examples of women being charged more than men for the same products and services (for example, for dry-cleaning a plain cotton shirt).

Whittelsey’s book in some ways implies that part of the problem is that women may not negotiate as well as men (for instance, she includes some good advice on how to negotiate prices when buying a car). Professor Ian Ayres, of the Northwestern University School of Law, used audit testing to examine this question.[8] Testers of different sexes and races were trained to use a single, uniform negotiating strategy for all car negotiations. Professor Ayres measured both initial offers, before any negations had begun, and final outcomes of negotiations.

The results? White men consistently got far better deals than white women, black women or black men – even though all of them used the same negotiating strategy. According to Professor Ayres, “white women had to pay forty percent higher markups than white men; black men had to pay more than twice the markup; and black women had to pay more than three times the markup of white male testers.” A black woman walking into a car dealership, and negotiating just the same as a white man, ends up paying $900 more for her car.

Footnotes: [1] Neumark, David (1996). “Sex Discrimination in Restaurant Hiring: An Audit Study.” The Quarterly Journal of Economics, August 1996, pages 915-941

[2] Goldin, Claudia and Cecilia Rouse (1997). “Orchestrating Impartiality: The Impact of “Blind” Auditions on Female Musicians.” NBER Working Paper number W5903, issued January 1997.

[3] Quote from page 12 of Furchtgott-Roth, Diana and Christine Stolba (1999). Women’s Figures: An illustrated guide to the economic progress of women in America. Washington, D.C.: The AEI press.

[4] Wood, Robert, Mary Corcoran and Paul Courant (1993). “Pay Differences Among The Highly Paid: the male-female gap in lawyers salaries.” Journal of Labor Economics volume 11 (3), pages 417-441.

[5] Quoted from the National Committee on Pay Equity, at http://www.feminist.com/fairpay/f_talkingpoints.htm

[6] Wenneras, Christine and Agnes Wold (1997). “Nepotism and Sexism in Peer-Review.” Nature, volume 387, May 22 1997, pages 341-343.

[7] Wenneras and Wold, for example, cite similar results found by Goldberg (1968), Trans-Action, volume 5 pages 28-30; Nieva and Gutek (1980), Acad. Manag. Rev, volume 5 pages 267-276; and O’Leary and Wallston, Review of Personal Social Psychology volume 2 pages 9-43. Also, see Johnson, Dan (1997). “Getting Noticed in Economics: the determinants of academic citations.” The American Economist, volume 41 (1), Spring 1997, pages 43-52.

[8] Ayres, Ian (1991). “Fair Driving: Gender and Race Discrimination in Retail Car Negotiations.” Harvard Law Review, volume 104 (4), February 1991, pages 817-872.

(This is one of a series of posts on the wage gap.)

On page 16 of the anti-feminist economics handbook Women’s Figures, the authors explain that “if women were only paid seventy-four cents on a man’s dollar, then a firm could fire all its men, replace them with women, and have a cost advantage over rivals.” This argument – or some variation of it – is commonplace among anti-feminists (for another example, see Warren Farrell’s discussion in his book The Myth of Male Power).

This argument sounds logical enough – so long as we assume that no other factors aside from the wage gap are operating. But in the real-world economy, other factors are always operating. (Curiously enough, this flawed logic can be used to “prove” not only that discrimination against women doesn’t exist, but also that racial discrimination doesn’t exist, and furthermore that neither racial nor sexual discrimination has ever existed.)

Some industries have, in effect, saved money by gradually replacing a male work force with a female work force. But there are many reasons employers might retain a male workforce, even though the pay gap means that men are paid more on average.

Why employers would retain a male work force.

If the only thing in the world to think about was the gender pay gap, no doubt many employers would look for ways to immediately replace their male workforces. But that’s not how things work in the real world. Employers have many compelling reasons not to fire all the men; here are just a few.

• To deliberately replace male workers with female workers in order to save money (rather than letting market forces do the same thing more gradually) is a sure way to get sued.
• The female workforce is not infinite; there aren’t enough women to fill all the jobs in the US currently held by men, in addition to the jobs women already have.
• Many industries have union contracts to contend with.
• The transition costs of replacing all one’s male employees (especially in male-dominated workplaces) may well be higher than the costs of the wage gap; hiring and training new workers is very expensive.
• Those transition costs are even higher when you consider how unhappy and unmotivated the men will be to train their female replacements.
• Customers in some industries may prefer to be waited on by men (customer-level discrimination is one theory as to why high-price restaurants prefer male servers).
• The employer may simply be prejudiced, and thus willing to pay the extra price to avoid employing women in some positions (this is conservative economist Gary Becker’s theory).
• The employer has community relations – and customer relations – to worry about.

For all these reasons and more, the fact that men still find employment is no proof that discrimination doesn’t exist.

Chicken and egg: women replacing men just as wages drop.

Even though employers have strong motivations not to replace male workers with female workers, it still has happened occasionally – although not in the tidy and unrealistic way pay gap critics suggest. When it happens, it’s not a conscious process, but rather the normal workings of a free-but-imperfect market (which makes it hard to recognize that such a thing has happened until it’s over). So in the 1980s, for example, insurance companies cut wages (or allowed inflation to lower wages), and over the same period insurance adjusters changed from a mainly-male occupation to a mainly-female occupation.

Historically, this process has happened many times; for instance, schoolteacher wages dropped as towns discovered that hiring a schoolmarm was cheaper than hiring a male teacher. Similarly, secretarial wages plummeted as that occupation became female-dominated. In a well-documented example, bank tellers changed from a male-dominated to a female-dominated occupation as wages (and prestige) dropped.

So which comes first, wages dropping, or women joining an occupation? This is a chicken-and-egg question. The adjustment from a male workforce to a female workforce is gradual; both changes happen together. A vicious cycle is formed; as more women join the occupation, wages get lower; and as wages get lower, fewer men apply for the job, increasing the proportion of women.

A misunderstanding of what the wage gap actually measures

Finally, the why-don’t-they-fire-all-the-men argument is based on a severe misunderstanding of the wage gap. Contrary to this argument’s assumption, the wage gap does not primarily measure difference in pay between women and men in identical jobs. Read my earlier entry What Causes the Pay Gap? for more information.

Postscript: James (of Hobson’s Choice), responding to Duane (of The Forest for the Trees) in the comments to an earlier post, took a different approach to rebutting this same argument. I hope James won’t mind if I reproduce his comments here: