For Equal Pay Day - There Is No Gender Pay Gap

For Equal Pay Day - There Is No Gender Pay Gap
Copyright: Public Domain / Used With Permission

We have Equal Pay Day – the day after which we do not earn any more money for the year – the gender pay gap – and the basic truth we've got , There are differences – on average over course, across the population – in how men and women choose to live their lives. This means that some gain more, some less, along certain axes.

But, you know, harridans complaining:

Equal pay day – why are they not paying for the rest of the year due to the gender pay gap
The gender pay gap means that from tomorrow women will effectively stop earning compared to men, here's how to fight back

That's nonsense:

Women earn 13.7 per cent less than men on average so they effectively start working for free on November 10.

And that's the wrong statistic. That is to compare male and female wages, including both part and full timers. We've been told, by the Statistics Ombudsman no less, not to use this number. The part time workforce is predominantly female. Part time workers get paid less per hour than full time workers, good reason and nothing to do with gender. This is a misleading number. A more accurate one is 9.5% or so, the difference in median wages between all men and women in full time employment. Something which is, one of the lowest in the world.

It promises to be the hottest party in town; a huge Trafalgar Square bash to celebrate the end of the gender pay gap.

But there is just one catch. Guests have been asked to save the date – in 2235, the year that the World Economic Forum has said the gap will be closed, given the current rate of change.

Labor MP Stella Creasy said the party, which has been hosted by the Mayor of London Sadiq Khan, carries a serious message.

A jolly wheeze, no doubt, but not true in the slightest. Instead, we have a difference in what people decide to do with their lives.

Saturday 10 November marks Equal Pay Day in the UK.

After this date women are effectively working for free until the end of the year because of the gender pay gap.

No. This simply is not how it works. This is however:

We mutually beg children. We cheer because the basic point is being made. Where we differ is that, well, what are the choices?

Are not we all supposed to be liberals on such matters?

No, really, it's all about children:

20% in the long run, driven in roughly equal proportions by labor force participation, hours of work, and wage rates. Underlying thesis "child penalties", we find clear dynamic impacts on occupation, promotion to manager, sector, and the family friendliness of the firm for women relative to men. Based on a dynamic decomposition framework, we have seen that the proportion of gender inadequacy caused by child penalties has increased dramatically over time, from about 40% in 1980 to about 80% in 2013.

We still have that difference in pay:

Which is where our Uber data comes in.

The platform does not distinguish between male or female drivers. Pay rates differ by not one whit. It would be one of the most stressful ways to try and inspire that customers were preferentially picking male drivers, leaving women with less work to do.

Yet we do not see a difference in average earnings. Some 7 percent in fact – very close to the more general gender gap.

That is, in the absolute and complete absence of any discrimination, we still see a gender earnings gap. Thus we can not assume, and should not, that any gap we can see is the result of discrimination.

No, really, I'm sorry about this, it's just not a gender pay gap:

It has a parent pay gap. Mothers make less than non-mothers. This is after adjustment for education, age and all the observable characteristics other than fertility. Hus husbands suffer the same pay. In more precise detail, primary child carers make less than parents who are not seeking.

This has been pointed out in a number of different types of venues:

As you can see, it is marriage and more especially the getting pregnant with your child and your child has to pay more. Now that we've correctly identified the reason for differential pay on average, we can not decide what, if anything, we'd like to do about it. For that, it is really a little odd. Equal pay audits at companies are not going to do much about the way that parturition affects income now, are they?

We can even go further try to count correctly, when we might find that the gender compensation gap is in favor of women:

Women get paid less than men. In general that is, across the economy as a whole. This is what is known as the raw, unadjusted or large gap. But we're in a market economy. People who work different jobs, work different hours or stick with the same career path. There is some variation to be expected.

In fact, the same thing is happening in the same organization, the gender pay gap falls to 0.8 per cent than anything more sinister.

But add in non-ware rewards and:

The key thing to note is that women, even given equal retirement, tend to receive their pensions for about three years longer than men. Where there is still a gap in retirement age based on gender this gap expands even. But also women are so disproportionately represented in the public sector, the one remaining place where the very much more valuable defined benefit pension still exists. There are reasonable estimates that as much as 30 per cent to public sector pay. Or, using our above definition, to public sector compensation.

If we add all these parts of the equation then the gender gap might start to look rather different. It is possible that they are getting a different compensation, on average, to pay for themselves: greater job security, greater flexibility, possibly better pensions, all at the cost of some cash in their monthly pay packets.

It really is true that we have not got a gender pay gap. Once we have worked for account, direct job to job comparisons, levels of education, years in workforce and all that is under 1%. And then when we add back to those things which female employees gain a little more than male, like those pensions, it might well favor women.

We've got people trying to live their lives. Those choices differ a little dependent upon gender. More with the arrival of children. A sexually dimorphic species makes different choices about raising children? Getaway, huh?

So, what's Stella Creasy going on about then? Well, did not we have a comment about shrieking harridans, did not we?

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