The Shrinking Gender Pay Gap

The pay gap between women and men in the United States has been declining fairly steadily since the early 1980s. As the chart below shows, the ratio of median annual earnings by women to that by men (among those employed full-time year-round) increased from .60 in 1980 to nearly .80 in 2006. That’s a good thing insofar as it reflects greater labor market access and opportunity for women.

But the celebration ought to be tempered. Most of us are likely to assume this means women’s earnings have been rising faster than men’s. Unfortunately, that is not the case. Women’s median earnings have been rising. But men’s have been flat; they haven’t budged in a generation.

(The data are in table A-2 of this Census Bureau report.)

There’s no reason to presume a causal relationship between the two; it isn’t likely that men’s earnings have been stagnant because women’s have been rising. After all, prior to the mid-1970s both were increasing.

Still, this poses an interesting question for egalitarians. If forced to choose, which period’s outcome would you prefer? 1960-73, in which both groups experienced absolute increases but the gender gap held constant? Or 1980-2006, in which the gap declined but men experienced no absolute increase?

If you favor the latter period, let me make the choice a little harder. The average rate of growth of women’s median earnings during 1960-73 was 2.2% per year. For 1980-2006 it was 0.9% per year.

5 thoughts on “The Shrinking Gender Pay Gap

  1. I think the answer will be clearer when the question is reframed in policy making terms.
    Will you, as a policy maker, accept a program that will cause a halt in men’s wages and will badly hurt women wage increase, to achieve a smaller income gap?
    I consider myself very egalitarian, and my answer is a definite no.

    (well, maybe it’s not so much a clearer way to reframe the question, only a more european one :-))

  2. Is this some kind of joke? A 35% tax rate is NOT confiscatory? I’m not in your top 1% of income earners by a long shot, though I am prosperous. Last year the Federal government took $57K out of my pay checks! That’s $57 K that I could have invested to help create more jobs, that I could have used to send my kids to college, save for retirement (so I don’t have to dpend on transfer payments from the rich, which is what an increasing number of Americans do). That also didn’t include the FICA taxes I paid, which are just a complete waste of money. I’ll never get back what I had robbed from my checks. Before you say that I should be willing to pay because I’m propsperous, let me just tell you that I also donate 12% of my income to charity. I would donate more if the government would leave more in my paychecks. Bottom line is that half of Americans don’t pay any federal taxes at all. Not one red cent! And you still can sit there and say that our system is not fair because the RICH don’t pay enough? They practically pay it all! Worst of all, the more we increase the size and availability of transfer payments, the more moral hazard we introduce into the economy. You heard me right — moral hazard. People who learn that they don’t have to work, save and take care of themselves will make the IMMORAL choice to depend on others to support them. That’s where the real immorality lies in our tax system.

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