The gender gap in pay: Both real and overstated

Some occasions invite word associations: Christmas/presents. July /fireworks. Birthday/cake.

April 14 was Equal Pay Day.

The word that comes to mind: baloney.

Perhaps you missed the occasion? Good. Equal Pay Day is exquisitely forgettable, because both sides in the debate over pay equality for women grind out a product more closely associated with Hormel lunch meat than rational discourse.

Democrats cry "injustice," to lament a yawning gap between the wages of women and those of men. Republicans have more to say about a woman's uterus than her paycheck.

Are women shortchanged for their labor? President Obama has proclaimed: "It's not a myth; it's math."

Yes and no. Obama's right that many women persistently have been paid less than men for comparable efforts. But he gets the arithmetic wrong.

The size of the gender pay gap matters when searching for solutions. It's important to realize that no unbridgeable divide separates the pay of women and men. The gap is fixable.

So why the confusion? It's the difference between a superficial look at the numbers and a more meaningful examination.

Government statistics do indeed find that median pay for women averages 77 cents for every dollar a man makes.

Yet that widely quoted number is perilously misleading. It fails to recognize differences in education, work experience, number of family leaves or, perhaps the most trivial variable, risk. (More men than women pour molten steel, dig coal or raise girders on high-rises.)

Take all those factors into account, and studies have shown the average gap between pay for women and men is between a nickel and 7 cents on the dollar.

Economists call that gender pay gap of 5 to 7 percent an "unexplained residual." But many times a fairer term would be "discrimination."

No big deal? Think again.

Only a nitwit would sit still for a 7 percent pay cut illuminated with the phrase "just because you're you." If there's not a dime's worth of difference between the dollar paid to a man and 93 cents paid to a woman, erasing the gap hardly represents a threat to the republic.

Besides, if the raw number — a 23-cent-on-the-dollar wage gap — shortchanges women hundreds of thousands of dollars over their work lives, a 7 percent gap still costs tens of thousands. Not exactly chump change.

The gender pay gap has haunted women for a very long time.

But …

"If the question is posed, 'Do men and women in equal job levels, with the same characteristics, get equal pay?' the answer is 'Yes.' If, on the other hand, the question is posed, 'Do men and women, with equal characteristics, get equal pay?' the answer is 'No," the Malkiels wrote.

"The reason for the difference in answers is that women with the same training, experience, etc., as men tend to be assigned to lower job levels."

So where are the remedies? Some already are at work.

Women now represent half the student body in medical and law schools. Education surveys show female students scoring higher in math and other technical subjects once considered the province of testosterone-bearing life-forms.

Consider:

"While nearly two-thirds of mothers are breadwinners or co-breadwinners for their families, women made up approximately two-thirds of all minimum-wage workers in 2012," the Roosevelt Institute reported.

Trouble is, the U.S. minimum wage doesn't automatically rise with inflation, and Congress shows more talent for debating an increase than adopting one. The federal minimum wage has been stuck at $7.25 since 2009.

Some states have taken action on their own, however. Minnesota adopted a three-step increase for large businesses, raising minimum hourly pay to $9.50 in August 2016. No signs that capitalism collapsed. The state unemployment rate stood at 3.7 percent in February, seven months after the first stage of the minimum-wage increase was introduced.

Many companies are so eager to obscure wage differences that employees can be disciplined for sharing the numbers on their paychecks.

The threat of lawsuits may be the best tool for pay equality until laws change.

(Full disclosure: Women at the Star Tribune won raises and back-pay settlements in the 1990s after they hired a lawyer to investigate gender bias in wages.)

" … Child care cost more than median rent in every state in 2012, yet access to reliable child care is a requirement for working parents to maintain employment," the Roosevelt Institute observed.

Gov. Mark Dayton has proposed universal education for Minnesota preschool children, but failed to focus the aid on low-income families most in need of help. The result: fewer tax dollars devoted to the poor and more to the middle class.

Women are more likely than men to have to take time off to tend to a sick child.

Is that likely to change? Not through legislation. Business lobbyists howl whenever the prospect of mandatory paid leave gets attention in Congress or a state legislature. Same goes for paid family leave legislation.

• • •

Changes in the way some companies do business may offer more hope for gender pay equity than knocking heads in political debate.

Harvard University economist Claudia Goldin, in research published last year, found that, in a few industries, technology and evolving business practices already have narrowed the pay gap between women and men.

The fast-consolidating pharmacy industry illustrates her point.

But CVS, Walgreens and other chain drugstores have either bought or squeezed out smaller competitors. What the chains bring with them is technology, the ability to use computerized records to track prescriptions and orders. The hierarchy among pharmacists eroded.

"The extensive use of computer systems that track clients across pharmacies, insurance companies, and physicians mean that any licensed pharmacist knows a client's needs as well as any other," Goldin wrote. "If a pharmacist is assisting a customer and takes a break, another can seamlessly step in. In consequence, there is little change in productivity for short-hour workers and for those with labor-force breaks."

Forty percent of women pharmacists with children work part time from their 30s to their 50s. But the part-time pay "penalty" shrank behind the drug counter because workers, armed with improved technology, became interchangeable, Goldin said.

The outcome, she wrote, meant that demand for women pharmacists narrowed the wage gap between part-time and full-time druggists and improved their working conditions:

"… A host of structural changes outside the realm of the labor market (that is, increased economies of scale in pharmacies, standardization of drugs, computer use, linked records through insurers) increased the demand for pharmacists and reorganized work in ways that have made pharmacy a more family-friendly and female-welcoming profession."

That means Equal Pay Day may be with us for years to come. Let the debate continue. Just hold the baloney.