CHART OF THE DAY: The ridiculous wage gap between men and women

In 2013, among full-time, year-round workers, women were paid 78% as much as men, according to the
American Association of University Women.

That’s the so-called pay gap between genders, and it hasn’t moved much in a decade.

Now, new data released by the US Census Bureau reveals the scope of that gap within occupations. It compares men and women’s full-time wages in 342 professions.

As Catherine Rampell reports at the Washington Post, women earn more than men in only nine of them.

Furthermore, in the tiny fraction of jobs in which women earn more than men, it’s by a nearly inconsequential amount.

But when men out-earn women, it can be by a significant amount.

Here are a few of the most extreme examples:

The standard explanation for the pay gap is that women self-select into low-paying, altruistic professions like nursing, teaching, and nonprofits, while men pursue highly lucrative, less altruistic careers.

But this data shows the faults in that argument, since the pay gap persists in almost all job functions.

Organizational psychology and other fields offer a few explanations as to why:

Women want more temporal flexibility than men.

Harvard economist Claudia Goldin has argued that the wage gap owes to how men and women regard their time differently. While women often take time off to have kids, men typically don’t, and it creates cascading effects in earning potential.

Harvard College grads serve as a prime example. Goldin’s data is telling:

Among those who received their BAs around 1990, a 10 per cent hiatus in employment time 15 years after the BA, thus amounting to an 18-month break, was associated with a decrease in earnings of 41 per cent for those with an MBA, 29 per cent for those with a JD or a PhD, and 15 per cent for those with an MD.

How do we solve this? Either jobs need to be restructured so that they no longer reward never leaving work, or perhaps even more progressively, paternity leave could become mandated for men — and the burden of offspring would be more evenly distributed between genders.

Women are less likely to negotiate their salaries than men.

A 2007 study of graduating MBA students found that half of male grads had negotiated their job offers compared to an eighth of female grads. A 2013 German meta-analysis further confirmed that women are less likely to initiate negotiations.

In an interview with Forbes, Stanford management professor Margaret A. Neale captures why this creates such toxic downstream effects:

If you think of a $US100,000 salary, and one person negotiates and gets $US107,000, and the other doesn’t — what’s the cost of that? In a simple-minded way, some people say, “Is $US7,000 really worth risking my reputation over?” And I agree, $US7,000 may not be worth your reputation.

But that’s not the correct analysis, because that $US7,000 is compounded. If you and your counterpart who negotiated are treated identically by the company — you are given the same raises and promotions — 35 years later, you will have to work eight more years to be as wealthy as your counterpart at retirement. Now, the question is: $US7,000 may not be worth the risk, but how about eight years of your life?

Since changing jobs every two years has become a common practice for getting paid more, losing out on negotiations can have a high price.

When women do negotiate, it comes at a cost.

Harvard professor Hannah Riley Bowles found as much in a 2006 study.

“In most organisations, those who control organizational resources and opportunities for advancement tend to be men,” she and her colleagues wrote. “If women are justifiably less inclined than men to initiate negotiations with men, then they may have fewer opportunities to increase their compensation and promotion potential.”

Women pay a “social cost” for negotiation, Bowles found, and men do not.

“Women who don’t negotiate may not be refraining because they are shy,” explained New Yorker psych writer Maria Konnikova in her coverage of the studies. “They may, instead, be anticipating very real attitudes and very real reactions that are borne out, time and again, in the lab and in the office. Often, leaning in has an even worse effect than saying nothing.”

Those are only a few of the biases that women face — and white men tend to benefit from.

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