Is the gender pay gap sort of like a unicorn?

I ask because my macroeconomics professor at the Stern School of Business at NYU, Michael Waugh, doesn't seem to think it exists. Maybe he's kidding, or maybe he's pretending he doesn't believe me so I can work harder to prove my ideas (I'm hoping this is the case), or maybe he's in deep denial, because our class discussions and after-class discussions go something like this:

Him: I don't believe the government should mandate equal pay for men and women.

Me: But women earn an average of 23% less for performing the same work as men.

Him: How do you know it's the same work?

Me: [Sputter in disbelief]

Him: Can you prove it? If women were really so much more productive, firms would hire them away from the companies that are underpaying them. The market would solve it.

I'm going to go ahead and take the not-very-radical step of asserting that the gender pay gap does, in fact, exist, and that its root cause is discrimination, and not that women are, across the board, 23% less productive and efficient than their male co-workers.

The longtime feminist economist blogger Echidne (with whom I hope to do a Shoulder Pads interview in the near future) has meticulously documented and explained not only its existence, but the myths surrounding it, here. She neatly does away with the rudimentary objections voiced by my professor, which Daniel Davies of Crooked Timber called "Stone Age labor economics," or rather, "Stone Age labour economics," because he's British.

I asked some finance people, wonks and feminists about this, and drew really excellent responses.  Since they said it way better than I could, I quote/excerpt them here [all emphases mine]:

From public policy whiz Kathleen Geier:

Even if there is no discrimination against young women, the fact that there still is a substantial pay gap among older workers, and that so few women make it to the top ranks of corporate America, politics, etc., is compelling prima facie evidence that a lot of discrimination is still going on.

The best studies on the gender gap in pay have all shown that such a gap definitely exists, *even when* you control for every observable factor like education, experience, hours worked, type of work, etc. Now, there are two ways you can explain that. One is simply that there is some discrimination going on. The other is that there is some difference in unobservable characteristics between men and women -- e.g., that men are harder working, or more motivated, or more intelligent or more able in ways that are not outwardly observable but which quickly reveal themselves on the job.

Which scenario seems more plausible to you? Many free market economist types have a bias toward believing that markets function efficiently almost all the time, so they're not going to think that discrimination is happening and that any group is getting paid less, or more, than it is worth. So they're going to go with the "unobservable skill differential" story. But "unobservable skill differential" is basically a polite way of saying, straight up, that women are innately inferior to men. That's basically what Larry Summers implied in his notorious remarks, when he mentioned biological differences as a possible explanation for women's underrepresentation in the hard sciences.

Biological differences, or "unobservable skill differential," or what have you, basically amounts to saying that women are biologically inferior. Aside from the fact that that's a profoundly ugly aspersion to be casting, there's not very much empirical evidence for it. Whereas there is literally mountains of evidence that women have been discriminated against -- tons of excellent, scientifically rigorous studies have shown this.

We know very well what equal work is, in a legal sense. (Oh yeah, the law!  That old thing! - ALS)

From Daniel Davies of Crooked Timber:

For some purposes (including, probably some macroeconomics) it makes sense to think of the labour market as a continuous spot auction in this way but a labour market like that has never really existed (the docks in Liverpool at the start of the 19th century probably closest). Economists really often need to take a step back and say "if I was a business, how would I actually do that?"  In any deep and realistic model of the labour market, search costs and recruitment costs would eat you alive if you tried to arbitrage away the gender pay gap.  In general, people in economics departments are much too quick to help themselves to arguments which assume that various versions of the law of one price will hold - I was inoculated against this at an early age when I sat next to a guy who spent all day trying to arb Royal Dutch against Shell.

From Katha Pollitt, feminist writer and thinker par excellence:

Anyone who's ever had a job knows the best person doesn't always get hired or promoted. I'm sure your prof can think of examples in his own department!   There's collegiality, nepotism, old boy networks, sexism and racism. People don't always like working with people who are 'different.'  Just ask a black guy. There are also huge assumptions about who is good at what, who the customers want to see, who suppliers can deal with easily --assumptions that usually favor white men. For example, if socializing with customers and clients includes visits to strip clubs and other male playgrounds, then being a man becomes an unacknowledged job qualification.

Katha also added this very important point:

etc! 

Thank you, everyone, for your contributions and readers -- please, please weigh in with thoughts and resources on this one.

Shoulder Pads Q & A with Bryce Covert

I saw Bryce Covert speak in March at the Women, Action and Media conference in New York City, when she spoke about being a financial reporter, something I may now be on my way to becoming. She was cheerful, articulate, thoughtful and encouraging. Since then, I've followed her excellent work on women in the economy in the Nation, GOOD, Alternet and other magazines and websites. Covert, 27, is now editor of the Roosevelt Institute's New Deal 2.0 blog, and has come out with some extremely keen analysis lately of how the economic crisis has affected American women. I spoke to her about her career, financial reporting, covering women's issues, and the end of secretaries. How did you wind up as a financial reporter? 

When I graduated, I went into teaching for two years.  I had this brilliant scheme to teach and write fiction at the same time, but it turns out that teachers don’t have free time, so the scheme didn’t play out so well.  After that I wanted to do something where I was writing every day, because if you want to write, you have to build it into your every day life.  I applied to a lot of entry-level jobs, in a whole host of areas.  A lot of the paying journalism jobs are in financial reporting, because there’s demand for insider knowledge.  I got a job at mergermarket – a completely entry-level job where half of it was data entry. But they promoted people very much based on merit, with little regard for age or seniority, so I moved up really quickly. I started in what must have been early 2008, so it was really interesting.  I came in just before Lehman Brothers, just before everything hit the fan.  Everything changed, so I thought, “I know as much as anyone.”

How did you satiate, shall we say, your feminism in that role? 

That was a struggle I had for a while. In the beginning there was such a steep learning curve that financial reporting was my whole life: I learned the skills of making sources, trading info, breaking news and things like that, that I hadn’t picked up anywhere else.  But when the learning curve leveled off, I needed to tend to the rest of myself. I volunteered with the Obama campaign because I’ve always been really interested in politics. At some point I started a blog.  I was full of ideas, but I didn’t have the bandwith to pitch everything every time, so it was a great place to put everything down.  I got on Twitter, and started connecting to people that way.  That helped a lot.  I ended up leaving mergermarket and getting a job at the Roosevelt Institute, where of all that political, feminist stuff is tended to in a very substantial way.

Although a number of think tanks are doing great work on these issues, I don’t see a lot of reporting that looks carefully, deeply and thoughtfully at the numbers about women and the economy. Am I looking in the wrong places?  Whose work do you follow?  

There’s Nancy Folbre, who blogs at The New York Times, and some people at Alternet, like Lauren Kelley.  I do think that it’s something of a bare space, and I think that comes from the separation that a lot of people have in their brains between economic and social issues, and between economics and feminism.  There’s this thought that economics is about these formulas, supply and demand, input and output, numbers, policies, and that those things are very separate from social issues, which are touchy-feely, emotional things, or activism.

I don’t think that line can really be drawn, because economics have social impacts and social issues have extremely important economic aspects. So that’s where I’ve decided to plant myself. There’s also a gender split – the field of economics tends to be very white, and very male, whereas writing about feminist issues is pretty much the purview of women.

From your work and the work some great policy think tanks, women – particularly in the U.S. – have it very, very bad, particularly at the lower ends of the economic spectrum.  At the same time, we’re hearing a lot about ‘investing in women.’  At a policy level, where do these facts and these rhetoric meet, and what do you think about this shift in rhetorical strategy?

The rhetoric is a good sign, because it’s better to have people talking about it than not.  In Obama’s jobs package, there’s a lot of recognition of jobs typically held by women, like teaching.  And they put out a fact sheet about how his policies affect owmen, which is awesome. That said, doesn’t seem to be going anywhere.

But the “Girl Effect” phenomenon, this idea that if you invest in women, you’ll save the world, is troubling.  Now it’s on women in the developing world to invest in their communities and save them, and that seems a little bit fraught.  Now we’re supposed to invest in them because it’s “smart economics,” and it does seem to pay off economically, and it does seem to convince people.

Here’s the problem, though: even if it weren’t economical to invest in women, we should still be doing it.  Even if it’s not going to bring developing countries into the global economy, we should still do it.

Tell me about your current research at the Roosevelt Institute.

First we were examining the public sector data where a lot of jobs traditionally held by women were eliminated, and the numbers there made sense.  But when we looked at the private sector numbers by occupation, we found that a lot of administrative assistants have been laid off.  The recession has been an excuse to fire them and tell other people to do their work.  My boyfriend has the new iPhone 4S, which has Siri.  She -- or rather, the machine – will make calls for you, schedule things for you.  It’s the latest and most tangible iteration of how secretaries have been replaced by technology.

But when I spoke to someone at an association of administrative professionals, she noted that the women who do administrative assistant work are capable of a lot of functions that can’t be mechanized, like working with Excel or doing Powerpoint, which are still needed.  But they’re not being invested in, and that’s the real problem.  Theoretically some day this economy will turn around and companies will not have invested in your most important resource: their employees.

This woman deserves a job.

One of our earlier writing assignments in the course was to report on a specific group of people and how they are being affected by the recession.  The plight of female public sector employees was brought to my attention by the great work of Bryce Covert, with whom I will be doing an interview soon.  Through Working America, I was put in touch with Shonda Sneed, who was laid off two years ago and is still looking for full-time work while she looks after her dementia-afflicted mother.  She could have had a job as an engineer rebuilding Ohio's infrastructure.  But something went wrong. By Anna Louie Sussman

September 26, 2011, NEW YORK CITY -- One day in December of 2009, Shonda Sneed was laid off from her job as a computer-aided design operator after ten years with her company, unceremoniously escorted out of the building that same afternoon.

Sneed, 46, had worked as an engineer at various private firms in Ohio for over twenty years, and was making around $35,000. But she knew that another job would be hard to come by just a few months into the recovery, which officially began in June 2009.  Luckily, she thought, hope was just around the corner.  Ohio was slated to receive $400 million in federal stimulus money for a high-speed rail project linking Cincinnati, Cleveland, and Columbus, and she had seen at least a hundred related engineering jobs advertised on Monster.com.

“I thought, woo-hoo, I am going back to work!” she said.

But something happened on November 19^th: Republican former Congressman John Kasich won Ohio’s gubernatorial race, and immediately announced his opposition to a high-speed rail line.  On December 9^th, 2010, Transportation Secretary Ray LaHood announced that the federal government would be revoking the $400 million grant, sending that money instead to states such as California and Florida, which had gotten behind the rail project.  Sneed was shocked.

Since the recession began in 2007, state budgets have faced the largest budget shortfalls in history, according to the Center on Budget and Policy Priorities.  The American Recovery and Reinvestment Act, passed in February of 2009, made $274 billion in federal contracts, grants and loans available to states and municipalities.  One of its chief stated aims was upgrading the country’s infrastructure, and Sneed was keen to do her part.  But when Kasich turned his nose up at $400 million in federal money, her job prospects dried up almost overnight.

Sneed had spent months staying up late and waking up early to get first dibs on newly posted jobs.  Overall, she estimated, she had applied to 75 of them.  They were slated to pay well, she recalls: around $20 to $25 an hour, plus benefits and the possibility to work over the long term, since the construction of any infrastructure she helped design could require her consultation going forward.  Several of the firms, impressed by her diverse engineering experience – she has worked as a civil, mechanical, electrical, and architectural engineer, and is highly proficient in the three-dimensional imaging software AutoCAD – told her that as soon as their contracts were secured, they would give her a call.

“When he turned it down,” she said, “the jobs went away, the hope went away.”

As the ARRA funding dries up, states and municipalities can expect further public sector layoffs.  To date, these public sector job losses have disproportionately hit women, who made up 57.2% of the public sector workforce at the end of the recession, but who have lost 72.3% of public sector jobs - 430,000 of them - since the recovery began in June 2009, according to data from the National Women’s Law Center.  Women are overrepresented in education and health care, two areas hit hard by cost-cutting measures.

“The loss of women’s jobs is very much related to cutbacks in government spending,” said Joan Entmacher, Vice President and Director of Family Economic Security at the National Women’s Law Center. “The states are cutting back as ARRA investments expire.  They have budget crises and aren’t getting help.”

Sneed, who was born in Dayton and lives in the suburb of Yellow Springs, had never worked in the public sector before.  But after a year of un- and under-employment, she felt it was her last hope.  While the private sector added 1.23 million jobs during the recovery, only 85,000 of them - one in 15 - went to a woman, according to the NCLW.

In the past, Sneed, said, she had never gone more than a month without a job.  She’d look for two or three weeks, and by the third week, “you’d have three or four” offers. But this prolonged under-employment has robbed her, a single woman who cares for her elderly dementia-ridden mother, of the few so-called “luxuries” she once enjoyed.  She no longer goes to McDonald’s every now and then.  She skips $300 shots she used to get for her asthma.   And when her car broke down last winter, she walked everywhere. Once a month, someone drove her outside of town do her grocery shopping.”

“You’re at the mercy of other people,” she said, her voice choking up.  “I swallowed my pride, because it’s not for me.  It’s for my mom.”

Thanks to lobbying efforts by the NCLW and a coalition of other women’s groups, the jobs bill that President Obama announced earlier this month does include some spending that will serve to protect women’s jobs, such as $30 billion to keep teachers on the payrolls, and targeted funding to train and provide jobs for women in construction and infrastructure.  But it’s unclear what chance the bill has of passing.  Republicans have already spoken out against its proposal to increase taxes on wealthier Americans.

Sneed has found temporary work organizing on behalf of S.B. 5, the Ohio Senate Bill protecting the right of collective bargaining, but it will end in November.  After that, she’ll pick up the job search again.

“I won’t give up,” she said. “I have to work.”

As someone who has until recently been working since she graduated high school, she deeply resents the notion that she and other jobless people are laying back, living off the dole.

“I’m not asking for a handout,” she said.  “All I’m asking for is the right to work in a safe place.  I can do the rest myself.”

Why MBA courses are a feminist journalist's best friend

It's week four of an MBA course entitled "Global Economy," our midterm exam will be upon us in approximately 100 hours, and anxiety has tied my back and neck muscles into knots.  And I'm thrilled about it. The course, taught by Professor Michael Waugh, has enlightened me on so many levels.  Learning how to calculate GDP, manipulate formulas in Excel, and analyze factors contributing to productivity is not only illuminating, but empowering.  All of a sudden, I feel like I understand business news when I read it -- really understand it.  Not just the words, but the thinking (the math, even) behind it.  For someone who comes from a humanities background (and compounded it by going to Brown), this new knowledge is exhilarating.

Why does this relate to feminism?  Several reasons:

• Being "numerate" - a word I confess I hadn't heard until Reuters data journalist and all-around great guy Reginald Chua guest-taught a class and dropped that one on my head - is just as important as being literate; it's a way of understanding the world that can provide a lot of clarity, or, as Professor Waugh put it when referring to a growth formula, "it's a way to discipline our thinking."
• Clarity and disciplined thinking are often scarce in discussions about gender, sexuality, reproductive health and related issues.  Why?  Because these are deeply personal, emotional issues with very small slivers of black and white, and a tremendous amount of grey.   There are statistics and metrics on a lot of these issues -- on abortion rates state-by-state, for example, or hate crimes against LGBTQ people, or the incidence of domestic violence -- but for many people, there's something callous about evaluating an issue like abortion on the basis of a data set.  Is a fetus a life?  Is a woman's life more valuable than that of an unborn fetus?  I'd hazard that most people feel more comfortable turning to beliefs, not numbers, for answers.
• This is not to say that numbers provide answers to these questions.  But data is critical to forming policies, and to soundly critiquing them.  I learned this when I researched an article on the death penalty, which is currently losing favor in a lot of states on economic grounds: prosecuting death penalty cases through repeated appeals processes costs states a crap-ton of money that could be spent on other parts of the criminal justice system, like the police force.
• Thinking more mathematically and learning about how labor, capital and productivity interact are forcing me to challenge and refine my own long-held notions about feminism, and to think more creatively and rationally about how and why issues like education, work, reproductive choice, sexuality, and health fit together within a larger economic framework.

Of course, given how fundamental constructs of gender are to larger social structures like the family, or marriage or - perhaps especially - commerce, the challenge with which I am struggling right now is how to evaluate these statistics, numbers, economic indicators in light of or with respect to structural critiques of patriarchy or heternormativity.  Data is disaggregated by gender or sex -- where does that leave trans people?  The Census Bureau defines a "family" as "a group of two people or more (one of whom is the householder) related by birth, marriage, or adoption and residing together" -- but who are they to define a family?  And where did that definition come from?

Forthcoming blog posts will explore more of these issues in depth.  Thanks for reading and stay tuned.  --ALS