Wage gap and controls

The United States has a strong male/female wage gap. Women make roughly 82% of what men make (among full time non-seasonal employees). An ideal wage gap would be one small enough not to be statistically significant.

When you control for factors like education, experience, and field, the wage gap drops significantly. Huzzah, job done, no more inequality! Yes?

No.

Discrimination in hiring practices between different fields with different pay grades will produce wage inequality. In fact, there’s evidence that women joining a field in numbers reduces wages in that field.

Discrimination in education will reduce women’s ability to get jobs in fields that require education.

Discrimination in marketing jobs or the hiring process will reduce the likelihood that women will choose jobs in a field. For instance, if it’s common to meet over drinks when interviewing for a software development job, that’s effectively discrimination. The CDC is recommending that all women who are not on birth control eschew alcohol, for instance. Women are generally instructed to avoid alcohol in order to avoid rape. So try to avoid introducing alcohol in your hiring process.

Discrimination in parental leave and expectations of child rearing will result in women having fewer years of experience at a given age. This is even more significant because women are more likely to be in fields with low wages, so it makes more sense for women rather than men in heterosexual marriages to give up their jobs.

Discrimination in who is expected to be a primary caregiver outside of parental leave has another impact. Primary caregivers must be available to tend to sick children. They must have schedules that match their kids’ school schedules. They must have flexible schedules for when their children have a half day at school. This restricts the type of job that caregivers can hold and what companies they can work for. This sort of restriction competes with optimizing for wages, which, in a capitalist society, is the duty of every worker. This is bad enough in a heterosexual marriage, where it would be in theory possible to share work evenly between men and women. But over a quarter of children live with only one parent, and more than three fourths of single parents are women.

These are all real and important forms of inequality that people remove from their calculations when trying to derive a “real” wage gap from the raw numbers.

It’s sensible, for certain reasons, to control for these factors. If you’re only looking for a certain type of unfair compensation practice that’s common across many fields, this can be useful. If you’re deciding whether to stand on the deck of an aircraft carrier and declare “Mission Accomplished”, you should look at the raw numbers. And if you want to know where inequality is cropping up, you need to slice and dice the numbers six ways from Sunday instead of trying to control for a handful of traits. What’s clear is that we still have work to do.

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