Is the gender pay gap fact or fiction? Depends on how you look at it

“Women all over America deserve a raise,” Hillary Clinton has said, again and again. “There’s no discount for being a woman — groceries don’t cost us less, rent doesn’t cost us less, so why should we be paid less?”

Depending upon which numbers you choose, women in America make 77 cents or 79 cents for every dollar men make. These numbers come from the U.S. Census Bureau, 77 cents to the dollar from the 2010 Current Population Survey, and an increase to 79.5 as of 2014.

What Clinton is saying in essence is that if a male family practice doctor makes $160,000, a female family practice doctor only makes $126,400. If a male schoolteacher makes $56,610, a female teacher only makes $44,722.

An analysis by Colin Combs at the National Center for Policy Analysis (NCPA) tells us; “The claim that women only make 77 [or 79] cents for every dollar a man makes is usually followed by a call for a whole new wave of regulations and pay mandates to stop this discrimination. The gender pay gap is undeniably real; men earn more than women, on average. The question is ‘Why?’”

Partly, it is in how the numbers are determined, which is illustrated by the fact that the Bureau of Labor Statistics determined that women make 83 cents for every dollar men earned in 2014, not 77 or 79 cents per dollar men earned. But there are other factors that must be considered in this assertion.

One of those factors is using the average pay for all men and the average pay for all women as the standard for analysis, about which Combs wrote: “What these statistics reveal is not what people are being paid for the same work, but what the average full-time working woman makes against the average full-time working man. It ignores differences in occupation. The average surgeon makes more than the average librarian, so if more men choose to be surgeons and more women choose to be librarians (which they do), this will be reflected in their average wage.” In reality, it is “unequal pay for unequal work,” Combs wrote.

The fact is that women voluntarily choose lower paying occupations, such as teaching, psychology and nursing, while men head toward computer science and engineering. Married women often reduce their participation in the job market for family reasons, and many other women are self-employed and run their own businesses. When adjusted for these factors, the results show that women do earn less than men, but only 5 to 7 cents less per dollar, not the much-heralded 21 or 23 cents.

The reasons for this smaller difference are not clear, Combs writes. Such things as salary negotiating skills or women being more risk-averse than men are suspected factors.  Since the true factors have not been determined, efforts to correct the difference will likely misfire; to solve a problem you first need to identify the problem.

The NCPA analysis quotes data from the Bureau of Labor Statistics:

■ Women’s inflation-adjusted wages have been increasing at a rate significantly higher than men’s, or rising even while men’s wages fall.

■ While the real wages of both men and women without a high school diploma have fallen, this decrease is three times worse for men than for women.

■ Women’s wages have been rising, even as the wages of men with a high school diploma or associate’s degree have been falling. Women are much more likely than men to interrupt their work for familial reasons, such as maternity leave.

Combs cites a Labor Department study conducted by CONSAD Research Corporation saying the 77 cent figure is misused and overshadows many real gains made by women since the 1970s. This is being done “to advance public policy agendas without fully explaining the reasons behind the gap,” the study said.

Never being one to let mere facts interfere with a good opportunity for demagoguery and pandering, Clinton charges ahead with her pledge to use government to get women a raise that they have largely already gained without her help.

“Our false preoccupation with pay equity is not costless,” said the Hoover Institution’s Richard A. Epstein, “for it leads to bad labor market regulations that hurt all workers.” Regulations imposed to achieve equality ultimately negatively affect the job market for both women and men.

Government tinkering with business elements it really knows nothing about, all to fix a small problem that it doesn’t understand is bad government. But bad government is a product that the Left produces in abundance.

This issue demonstrates how the Left is either unaware of, or simply chooses to ignore economic principles in order to pander to a special interest group to garner votes. Jobs have value based upon the dynamics of each business, and each business has its own dynamics. A government one-size-fits-all solution to this is, to be kind, highly unlikely to succeed.

An electorate that does not investigate issues and votes instead on emotion will help usher in more harmful policies like those that have prevented the U.S. from recovering from the recession that ended seven years ago.

More free stuff! Free community college tuition for everyone!

Earlier this month President Barack Obama issued the latest in his series of bad ideas: free community college for all. "No one with drive and discipline should be denied a college education simply because they can't pay for it," Mr. Obama said. "A college degree is the surest ticket to the middle class." While that assertion may or may not be true anymore, many people may be wondering what’s wrong with the free tuition idea.

First, we have to ask if he is really serious? Or, knowing that this idea has little chance of being approved, is he setting the stage for an issue in the 2016 campaign? But, assuming he is serious, here’s some of what is wrong with this idea.

If every state participated, the White House suggests that Mr. Obama’s proposal could help 9 million students and would save full-time enrollees an average of $3,800 a year. However, using the average cost, state and federal governments would have to pick up the tab of $34.2 billion each year. And, of course, these governments will get this money from … guess who: We, the taxpayers. Nothing is free.

Never having had to pay his own way, perhaps Mr. Obama is unaware that students with “drive and discipline” have in the past managed to pay their own way to a community college, a trade school, or to a four-year institution, through part-time or full-time jobs and/or work-study programs. That is a good process that over time has gotten millions of people through school and given them valuable work experience at the same time.

Giving things away is a slippery slope. An article in the Los Angeles Times has already suggested going farther. Michael Hiltzik writes, “But the proposal fails to address one glaring flaw in the nation’s overall system of public higher education: It should all be free.” Really? Why? Will this give-away mentality never end? And, furthermore, what exactly gives the president the authority to take care of kids’ college costs?

And, making significant things too easy deprives people of the ability to control their own lives. How will they ever be able to actually think about their life, develop goals, and work to achieve them? How will they become self-sufficient, and make their way in the world? The ease with which one obtains desired things is directly and inversely correlated with the appreciation one has for that which is obtained.

We can see this concept in action in federal support programs for children and unemployed adults, how dependency becomes a way of life.

Paying unwed mothers generous levels of support for themselves and their children has produced single-parent families where the mother is incentivized to have more children, not because she really wants more children, but because having more kids means getting a bigger support check.

People who have lost their job in the ultra-weak Obama recovery not infrequently turn down a new job because they can collect more in extended unemployment support than they can make at the new job. This is a significant influence in pushing the workforce participation rate to its lowest point in decades. “I can make more on unemployment than I can working one of the jobs that are available, so I’ll just drop out, and stop looking for work,” is how tens of thousands look at the situation.

This is not some unsupported theory. In March of 2013 The Huffington Post reported that the “number of days a job vacancy sits unfulfilled has gone up since the depths of the Great Recession in 2009. It currently takes an average of 23 business days for an employer to fill a job opening, compared to 15 days in 2009, according to an analysis of Labor Department data from economists at the University of Chicago and University of Maryland that was cited by The New York Times.”

In November of 2014, a study conducted by the Centre for Economics and Business Research (Cebr) reported that in the U.S. “33% of job vacancies remain open for three months or more. The cost of these unfilled jobs reaches $160 billion each year, a significant cost to the nation as a whole, businesses and individuals.”

Just as providing too much comfort through support for families and the unemployed has produced negative economic and social outcomes, so will giving away tuition to community colleges.

The truth is that Barack Obama and the others who share his poisonous ideals don’t want people to think for themselves or to be self-sufficient. Big government liberals want widespread dependency. They decry and oppose free market features and self-sufficiency at every turn, not because it is better for Americans or for the country at large, but because it suits their narrow, selfish ambitions.

Remember, back in late October of 2008, candidate Barack Obama told us he wanted to fundamentally transform the United States of America.

When those who think government is the answer to all problems, great and small, significantly outnumber those who prefer individual liberty and self-reliance, the country will have taken a step from which it will not be able to retreat. We are very near to that point.

Government is a poor mechanism for correcting societal problems

Commentary by James Shott

Most Americans think that helping truly needy people, whether they live here or in some other country, is a worthy objective. Looking at charitable contributions as a benchmark, Americans are the most generous people in the world, giving $316.23 billion to charitable organizations in 2012, about 2 percent of GDP, according to Charity Navigator, and preliminary figures for 2013 indicate a significant increase to $328 billion.

Double those numbers and it still would not be good enough for the federal government, which believes that if private sources don’t relieve every semblance of suffering for every single suffering American, the government must step in and do the job better.

Except that government can’t do it better, never has, and never will.

Government’s failure to achieve better results than normal people doing what normal people do has never been a deterrent to wasting billions of taxpayers dollars in a futile effort to try one more time to do so.

The most notorious failure was Lyndon Johnson’s “War on Poverty” which began 50 years ago in Mr. Johnson’s State of the Union message. From the beginning of the war on poverty until 2013, local, state, and federal spending on welfare programs totaled $16 trillion, according to data from the U.S. Census Bureau. Currently, the United States spends nearly $1 trillion every year to fight poverty.

When the War on Poverty began, 33 million Americans were in poverty and the poverty rate was 19 percent. Today, approximately 46.5 million live in poverty and the poverty rate is 15 percent. Even though the poverty rate is lower than 50 years ago, because our population is much larger now than then, more people are poor today than in 1964. We have fought a long and expensive fight, and lost. Yet we still fight on.

President Barack Obama’s cause du jour is income inequality, and it’s significant other, the minimum wage. And now that “reforming” the best healthcare system in the world is well underway, he wants to declare war against income inequality.

In no free or relatively free economic system can there be income equality, for two reasons. First, inequality is a fundamental part of life. Some people sing better than others. Some are better athletes than others. And some people make more money than others, and that’s because some people are better at their job than others and deserve higher pay, and some jobs require more skill and training than others, and pay better.

So, like poverty, another area that will always exist, we will always have income inequality.

Far more important, however, is whether there is the opportunity to move up from the lower income levels, and that is an area that has been fairly stable, according to The New York Times, which reported last month that “the odds of moving up — or down — the income ladder in the United States have not changed appreciably in the last 20 years….”

That means that people in the lowest quintile are not condemned to stay there, and people in the top quintile are not guaranteed to stay there, and there is substantial movement in and out of all quintiles.

It’s a favored piece of envy politics that the rich get richer and the poor get poorer. But the data tell a different story. From 1967 to 2009, the real mean household income increased for every quintile, which means the poor became richer, not poorer. Americans in poverty could afford more goods and services in 2009 than in 1967, according to U.S. Census Bureau data.

Other factors, like where people live, have an effect. Harvard University’s Raj Chetty reported “the probability that a child reaches the top quintile of the national income distribution starting from a family in the bottom quintile is 4.4 percent in Charlotte but 12.9 percent in San Jose,” and factors such as better primary schools and greater family stability also aid upward mobility, he wrote.

Larry Kaufmann, senior advisor at Pacific Economics Group, discussed findings of the Pew Charitable Trust, which showed that “Half of children born to parents with bottom-third income levels experience upward relative mobility when the parents remain continuously married; the figure falls to 26 percent when this is not the case,” he wrote.

The Pew study shows that the poverty rate among married couples is only 6 percent, and among married couples who both have full-time jobs the poverty rate is practically zero. The poverty rate among single dads and single moms, however, is much higher: 25 percent for single dads and 31percent for single moms.

Investor’s Business Daily Senior Writer John Merline notes that income inequality has increased faster since Mr. Obama took office than under any of the three previous presidents, and that inequality is now greater than at any time since the Census Bureau started recording it back in 1947.

The message from this is that to assist folks in moving up the income ladder, Mr. Obama should replace his administration’s policies that impede economic recovery, and seriously encourage the restoration of family values among Americans. That would accomplish far more than making people think they are victims, and fomenting division among Americans.



Cross-posted from Observations