4/11/01
Gender, Employment and the Economy
The male/female earnings gap -
What is the earnings gap? When we talk of comparing women's earnings with men's earnings, we find that no matter how we measure them, women's earnings are below those received by men. In 97% of the occupations for which data is available, women's median weekly earnings are less than men's earnings. Very often men's earnings are used as the "yardstick" to measure women's and we say women's earnings are a percentage of men's. The earnings gap is the difference between this percentage ratio and 100%.
How large is the earnings gap?
In 1997 for those receiving hourly wages, women's median hourly earnings were 80.8 percent of men's
For full-time wage and salary workers, women's median weekly earnings were 74.4% of men's.
In 1997 Women who worked full-time year round averaged 74 cents for each dollar than men earned. (Steinberg)
The average working woman loses about $420,000 due to inequitable pay practices. A recent study forecast that the typical 25-year old woman with a college degree will lose approximately $523,000 in wages over her working life.
Why the difference among measures? Hourly earnings do not differentiate whether or not the individual worked full-time or year-round. It should be noted that women are employed fewer hours in the week and fewer weeks in the year than their male counterparts. Less time at work contributes to a part of the earning difference when women's weekly and annual earnings are compared with men's.
The wage gap between women and men declined significantly between 1975 and 1997. Reasons:
Women are taking advantage of the legal right to equal opportunity as established in Title VII of the 1964 Civil Rights Act.
They are moving out of low-paying historically female jobs into higher-paying professional and administrative jobs with greater possibilities for promotion over their working lives.
However, an important reason for the narrowing of the gap in previous years was the result not of women's wages rising, but of men's real wages falling so that they were closer to women's wages. (Prior to 1993 - when the wage gap was 77%)
1997 - wage gap was 74.8% - attributed to changes in welfare policy.
1998 - wage gap was 76% - attributed to increase in the minimum wage.
When we look the 45-year period as a whole, women's real earnings have increased by 1.2% each year while men's earnings have grown by only .9 %.
Of course, race and ethnicity are important intervening variables. In 1997 African Americans earned 77% of what Whites earn, while Hispanic Americans earned only 67.6% of what whites earn.
Gender and race - compound the wage difference.
African American women earned 84.5% of what white women earned, whereas Hispanic American women earned just 71.6 percent of what white women earn.
For African American and Hispanic American men, the wage gap relative to white men is 72.6% and 62.4% respectively.
The wage gap widens when race as well as gender is taken into account. If one uses the average median wages earned by full-time year-round white male workers as the standards against which to measure wage inequities, one finds that on average white women earn 72.6 percent, black women, 62.6 percent and Hispanic women, 53.1 percent of this standard.
Explaining the Wage Gap
What reasons have been suggested for the differences in earnings between women and men?
One consistent observation that can be made is that female-dominated occupations usually pay significantly less than male-dominated occupations.
Dual Labor Market - characterized by one set of jobs employing almost exclusively men and another set of jobs typically viewed as secondary, employing almost exclusively women.
Recent research indicates, in fact, those occupational segregation alone accounts for about 20 to 40% of the difference in men's and women's earnings.
Occupational sex segregation refers to the degree to which men and women are concentrated in occupations in which workers of one sex predominate. A commonly used measure of occupational sex segregation is the dissimilarity index, also called the segregation index and sometimes simply D. Its value is reported as a percentage that tells us the proportion of workers of one sex that would have to change to jobs in which members of their sex are underrepresented in order for the occupational distribution between the sexes to be fully balanced.
Historically, women have "crowded" into a few occupations. In 1997 the six most prevalent occupations for
Women were, in order of magnitude, schoolteachers (except post-secondary teachers), secretaries, cashiers,
Managers and administrators, registered nurses, and sales supervisors and proprietors. In 1997 about one-fourth of all women workers were employed in these occupations
Industry sex segregation - a form of occupational sex segregation in which women and men hold the same job title in a particular field or industry, but actually perform different jobs. For example - waiters in an upscale restaurant vs. waiters in a diner.
Establishment sex segregation occurs when women and men hold the same job title at an individual
Establishment or company, but actually do different jobs. Again, women's jobs are usually lower paying and less prestigious. For instance, it is not uncommon in a law firm for women to be concentrated in the family law division, while men dominate the more lucrative corporate and commercial law department.
Human capital theory - explains occupational sex segregation in terms of women's free choice to work in jobs that make few demands on workers and require low personal investment in training or skills acquisition based on the assumption that women's primary responsibility is in the home.
Many employers, economists, and public policy makers acknowledge that "women's work" almost always pays less than "men's work," but they maintain that the reason particular jobs have become female-dominated is because large numbers of women have freely chosen to enter them. Central to their argument is the assumption that women's primary allegiance is to home and family; thus, they seek undemanding jobs that require little personal investment in training or skills acquisition so that they can better tend to their household responsibilities. In other words, women choose to invest less than men in employment outside the home do, so they get less in return. This explanation is called human capital theory.
Ronnie Steinberg
Much of the wage gap has to do with the different and unequal rewarding of "women's occupations" and "men's occupations."
Wages have been inextricably tied to assumptions about gender and about race and ethnicity as well.
Although some women may still choose to enter historically female jobs as a personal solution to the difficulties of combining work and family life, this explanation cannot account for the persistence and breadth of the wage gap. A 1981 report of the National Research council of the National Academy of sciences found that between one-third and one-half of the wage difference between women and men cannot be explained by differences in their educational level or their job experience. Neither can the difference in pay be explained by differences in the skill requirements or the responsibilities of the jobs women and men hold. Instead, the council concluded that a factor that might be called "femaleness" of a job is embedded in the standards of compensation. "Not only do women do different work than men, but the work women do is paid less and the more an occupation is dominated by women, the less it pays." (Exception would be nursing)
The Impact of Femaleness on Wages -
Until recently, it was accepted practice to pay men more; their wages were said to reflect no only what their jobs were worth but also their status as breadwinners for their families. A woman's wages, when she worked for pay, were regarded as a supplement to those earned.
Assumptions about gender continue to saturate the current structure of compensation.
Examples - the job requirements of physical therapist were found to be considerably more complex than those of the male job of senior broadcast technician, but the physical therapist earned $35 less per month than the technician.
Licensed practical nurse was rated as of equivalent complexity to photographer, a historically male job. The difference in the pay for these two jobs was approximately $350.00 per month, or $4,2000 per year. (Late 1970s)
Job evaluation is a set of procedures for systematically ordering jobs as more or less complex for the purpose of paying wages. Jobs are described and assessed in terms of their characteristics - usually grouped as relevant skill degree of effort required, amount of responsibility, and extent of undesirable working conditions. Wages rates are abased on these assessment of job content. Wages are based, then on job requirements. Individuals performing the job are assumed to have the required knowledge, skills, and character to perform competently.
There is gender bias in job evaluation
Four major sources of gender bias remain in virtually every traditional job-evaluation system currently available to employers.
First, the prerequisites, tasks, and work context of jobs historically performed by women have been ignored or taken for granted. For example working with mentally ill or retarded persons or with dying patients is overlooked as a stressful working conditions in compensation plans, while working with noisy machinery is not. Working outdoors is considerable an undesirable working condition, but working in an open office area without the ability to close a door for privacy is not.
Frequently overlooked characteristics in traditional job evaluations include the ability to communicate complex and technical material to non-technical audiences, the human relations skills necessary for working crisis situations, the skills and effort involved in active listening or in performing multiple tasks simultaneously. The responsibility of protecting the confidentiality of records, the ability to represent the organization through communication with the public, and regular exposure to disease and incontinence.
Second, job content is perceived on the basis of gender stereotypes.. Evaluation systems confuse the content of the job with stereotypic ideas about the characteristics of the typical jobholder. For example, authority is associated with masculinity and thus with historically male work, while the exercise of authority that is associated with the female work usually remains invisible. Mal e managers are perceived as running offices and departments. Yet the daily work of a departmental or personal secretary in actually running an office remains invisible, especially if she performs her work competently.
Another example - firefighters vs. fight attendant. The emergency skills of the flight attendant, while not as complex as those of the firefighter, remain invisible and uncompensated.
Parking lot attendant having a more complex job than a child-care worker. Dog catcher more complex than that of nursery school teacher. Hotel clerk more complex than a nurse-mid-wife.
Third, the content of women's work is recognized in the job -evaluation systems but is assumed to be less complex than that of men's work. Women's and men's jobs, for example, both require perceptual skills, but men's jobs are more likely to require spatial perceptual skills and women's jobs are more likely to require concentration and sensory skills.
Women's and men's work both require human-relations skills, but those associated with men's work (especially administrative and managerial positions) often involve the kinds of power and control associated with supervision. Those associated with women's work often involve emotional labor associated with influence over, educating or taking care of others. Job-evaluation systems define power and control over others as involving more complexity than influence and emotional labor.
Fiscal responsibility historically is treated as involving high degree of responsibility, the greater the fiscal responsibility, the higher the complexity rating of the job and the higher the wage. But these same systems fail to recognize responsibility for client well being as a job responsibility.
Fourth, some job-evaluation systems treat the job content associated with female jobs in a way that actually lower wages. The work is negatively valued. The more an incumbent is required to perform the content, the less the incumbent earns.
One study of the effect of femaleness on wages found that working with difficult clients and dying patients actually lowered pay independent of other job content.
What other factors besides occupational choice affect the earnings gap?
It has been suggested also, that seniority within the firm and in the job have much to do with earnings of American workers.If this is the case, then the work experience of the two groups will have an impact on the earnings ratio of women to men.
1987 - Survey of income and program participation showed that for men only 1.6% of all potential work-years were spent away from work while for women workers, 14.7% of all potential work-years were spent away from paid work.
Jacobsen and Levin found that when women re-enter the labor market, their earnings are much lower than those of a comparable group of women who did not leave the labor market are.Over time that difference diminishes, but never disappears, even after as long as 20 years. One possible interpretation is that even after many years, employer's view gaps as a signal that the individual is not as dedicated a worker as a woman who did not leave the work force. This view may be reflected in reduced promotion possibilities, different job assignments, and other actions by employers that reduce wages.
There may be other factors that are difficult to measure that also affect women's career decisions. To what extent have women been denied the opportunity to find employment in other occupations? Have they been fearful of entering occupations where few women are employed because of lack of knowledge about the field, or fear that sexual harassment may be a factor? These are aspects that are difficult to quantify.
Gupta reported that research results indicate that sex differences in occupations are due both to differences in preferences and to differences in employer selection. It should be remembered that occupational segregation has been disappearing; there are far fewer "women's job and fewer "men's" jobs than in earlier periods.
What about sex discrimination. Sex discrimination still exists in the American workplace, but the magnitude of its effect on the earnings gap is hard to measure. Statistical studies have successfully attempted to measure the effects on the male-female earnings differential of several factors. Employee characteristics, such as occupation, education and experience, have been examined using statistical techniques to assess the impact each has on women's and men's earnings.
2 to 3 million dollars a year has been awarded each year between 1992 and 1997 to those winning cases filed with the EEOC.
Legislation for Equality in the Workplace
Title VII of the 1964 Civil Rights Act - forbids discrimination in hiring, benefits, and other personnel decisions (such as promotions or layoffs) on the basis of sex, race, color, national origin, or religion, by employers of fifteen or more employees.
Title VII has been implemented and enforced by the Equal Employment Opportunity Commission.
Executive Order 11246 (Affirmative Action) - applies to employers who hold contracts with the federal government. It states that employers may be fined or their contracts may be terminated or they may be barred from future contracts if discrimination is found. The Office of Federal Contract Compliance in the Department of Labor monitors compliance.
Equal Pay Act of 1963 - The Equal Pay Act prohibits employers from paying employees of one sex more than employees of the opposite sex when these employees are engaged in work that requires equal skill, effort, and responsibility and that is performed under similar working conditions.
Comparable worth - equal pay for different jobs of similar value in terms of factors such as skill, effort, responsibility and working conditions. Comparable worth requires, instead, that dissimilar work of equivalent value to the employer be paid the same wages.
To achieve pay equity, it is necessary to cleanse traditional compensation practices of their gender biases. This objective is easier to achieve technically than political.
Often it is necessary to design a new job evaluation system to achieve gender neutrality in the measurement of job content. These new, gender-neutral systems measure more accurately and positively value the invisible skills associated with historically female jobs. These systems also capture the mental, visual, and emotional efforts required and the undesirable working conditions associated with these jobs. For example, emotional effort required to deal directly with the needs of patients, customers, citizens, and co-workers in assisting, instructing, caring for, or comforting them.
New systems of job evaluation also reconstruct traditional job-content factors such as human-relations skills and communications skill to encompass the full rage of content found in actual female and male jobs. Human-relations skills, for example, include not only the range of skills necessary to supervise subordinates but also the skills required to deal effectively with or to care for others or to shape, affect or influence others' feeling, actions, or decisions.
A similar hierarchy is used for measuring and evaluating communications skills. It recognizes different forms of communication, including writing and speaking skills, as well as nonverbal skills, reading, listening and use of another language. It also recognizes the importance of the characteristics of person with whom the interaction takes place. Example - communicating to groups with varying levels of understanding requires more complex communication skills than presenting technical information to a group of technical peers.
Unfortunately, because of political constraints, gender-neutral job evaluation is rarely used in actual pay equity initiatives.
Achieving pay equity would not only put an extra $21,500 to $5,000 per year in the paychecks of those performing historically female work, it would empower them in other ways as well. It would make visible and positively reward the productive contribution of women's labor. It would also empower women in their families, because contributions to family income have an important impact on family decision making. Pay equity is a matter of economic equity.
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