The notion that women earn 78 cents on the dollar compared to men is ingrained in progressive lore. The misleading figure derives from an aggregate calculation of income by gender, ignoring salient factors such as occupational choices and hours worked.
Nevada’s newly elected Democratic congresswoman, Jacky Rosen, trotted out this trite canard last week in an oped for the Review-Journal’s insert, writing that Nevada women “still only make 82 cents for every dollar a man makes.” That this passes for serious debate these days speaks volumes.
As The Washington Post’s fact-checker Glenn Kessler noted last year, a 2011 study by economists at the Federal Reserve Bank of St. Louis found that “research suggests that the actual gender wage gap (when female workers are compared with male workers who have similar characteristics) is much lower than the raw wage gap.”
Mr. Kessler writes that “it’s long past time for politicians … to stop repeating the ’78 cent’ factoid without proper context.”
In addition, he adds that a 2013 Georgetown University survey found that males tend to dominate majors with potentially higher economic values, particularly engineering. Meanwhile, nine of the 10 “least remunerative majors were dominated by women,” including social work and counseling.
New research suggests, however, that this might be changing. A paper titled “The End of Men and Rise of Women in the High-Skilled Labor Market” by economists from the University of British Columbia, the University of Manchester in England and the University of Southern California concludes that “the high-paying occupations of the past few decades … require increasing levels of interpersonal skills such as collaboration, empathy and managing others,” the Wall Street Journal reported Wednesday.
The lead author of the study told the Journal that the increased value employers are putting on such traits is “favoring women in high-paying jobs.” That will ultimately boost female compensation as more women move into higher-paying fields.
The “78 cents” figure has been used by leftist politicians — including those in Carson City — as an excuse for all manner of proposed government interventions in the private economy. The clear implication underlying these proposals is that many employers are bigoted and discriminatory in their compensation practices so almighty central planners must step in to save the day.
In fact, as the new study implies, evolving preferences combined with the chaos of the marketplace — millions of people making millions of personal choices every day about their jobs and careers — represent the most efficient mechanism for setting pay scales.