Tuesday, April 22, 2008

Lady in red

A letter to the editor in the Howard County Times reminds us that today is "Equal Pay Day", or as I like to call it, "Labor Market Arbitrage Day". The idea is that women are supposed to wear red today to symbolize that they are in the red with their paychecks. From the letter:

Even when women and men hold similar college credentials and work full time in the same fields, women earn less than men do as early as one year after graduation. According to statistics released by the U.S. Census Bureau in 2007, women earn 77 cents for every dollar paid to their male counterparts. Economist Evelyn Murphy estimates that the wage gap costs the average full-time woman worker in the United States between $700,000 and $2 million over the course of her lifetime.


I have blogged about this issue before. I do not doubt that there are some ignorant employers out there who discriminate against women. However, I do not believe that women are systematically paid less than men. That is essentially the same as saying that two stocks in similar companies with similar profitability are trading at substantially different prices. If women are indeed systematically paid less, it likely has to do with other benefits that they receive (perhaps more vacation time, greater flexibility with their hours, less responsibility, etc.)

I think it would be interesting to survey the job satisfaction of women versus men. If women believe that they are systematically underpaid, then one would think that they have pretty low job satisfaction. Job satisfaction levels would probably be more telling than pay levels, although more difficult to measure. Of course, I'm a dude so what do I know?

3 comments:

Anonymous said...

Your last sentence summarizes well your lack of understanding of the issue. :)

Part of the problem may be the inability to properly categorize the pay gap. Are women not held in as high esteem as men with equal experience and education and therefore not in higher paying positions? Or are they simply paid less in the same position.

Job satisfaction would be incredibly telling, as would relating the responses to whether or not their supervisors were male or female.

Eludius said...
This comment has been removed by the author.
Eludius said...

I had to delete my comment because I misworded it

Where I work women are on average paid less because more women work part time than men. These women prefer the flexibility to be home with their families. My wife is no exception. She'd rather be home with the kids than have me home, so therefore she ends up making less money.

Now if she did exactly the same job and worked the same amount of hours and made less, then we would have a problem.