New Analysis: The Gender Wage Gap Is More Like a Chasm

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Commentary Economic Justice

New Analysis: The Gender Wage Gap Is More Like a Chasm

Dennis Carter

These new numbers might shift the argument for policymakers and advocates seeking ways to narrow—and maybe one day, close—the gender wage gap.

Not only is the gender wag gap real—contrary to the logic-defying arguments of conservative politicians—but it’s about twice as bad as commonly thought.

While mainstream economists have sounded the proverbial alarm on a 20 percent wage gap between women and men, that gulf is actually closer to 40 percent, according to analysis published this week by the People’s Policy Project, a left-leaning think tank focused on economic policy. The figures commonly cited from the National Women’s Law Center control for full-time work, meaning part-time workers and those outside the workforce are left out of the wage gap conversation.

The “completely uncontrolled comparison of the median earnings of all men and women who are in their prime working years,” between the ages of 25 and 54, show a gender wage gap of 39 percent, with women in 2016 earning $25,000 annually and men making $41,000 per year, according to the People’s Policy Project analysis. It’s a stunning figure for anyone who was already rattled by the 20 percent gap splashed across news headlines every year on Equal Pay Day.

The gender wage gap dwarfs the commonly cited 20 percent figure when taking into account both part-time and full-time workers—working men make 27 percent more than working women, according to the People’s Policy Project analysis.

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“If you are trying to determine how much less employers pay women for the same work, then you should use a bunch of controls to ensure an apples-to-apples labor comparison,” writes Matt Bruenig, president of the People’s Policy Project and author of the gender gap research. “If you are trying to determine what effect gendered sorting in the labor market has on earnings, then you should use no controls as I do here.”

While the 39-percent gap comes at the 50th percentile of earnings, the high-end of the earnings spectrum shows an even more stark difference in the money women and men make. Men in the 99th percentile of earners make $350,000 per year; women in that same percentile make $185,000. The bottom 24 percent of women, meanwhile, make $0.

We’ve known for quite a while that there remains stubborn workplace discrimination against women, with women workers of color making far less than their white women colleagues. We know that women working full-time lose nearly a trillion dollars every year due to the wage gap. We know this structural inequality exists in 98 percent of congressional districts, not just regions represented by lawmakers hostile to wage gap remedies. We know that lower pay leads to tangible effects on the everyday lives of women, such as inability to pay off student loan debt.

Now we know that removing controls on wage gap analysis reveals a much uglier picture of what women and men earn. These new numbers might shift the argument for policymakers and advocates seeking ways to narrow—and maybe one day, close—the gender wage gap: The problem is far worse than we ever thought, they might say when rebuffed by conservatives. Paid leave policies, enforceable wage equality laws, a higher (livable) minimum wage, raising the tipped minimum wage, pay transparency: These become economic imperatives in a nation where women workers make almost 40 percent less than men.

“The pay gap is not myth. It is math,” as Lisa Maatz, former vice president of government relations at the American Association of University Women, said in 2015.