The Causes of the Wage Gap between Men and Women in the United States - Research Paper Example

Causes of the Gender Wage Gap in the United s Causes of the Gender Wage Gap in the United s President Obama recently signed executive actions seeking to close the gender wage gap, which favors men over women in the country’s employment environment. The April 8, 2014 undertaking revived focus and debate regarding the lack of progress thus far, in the efforts to guarantee equality in the work environment. The acuity of this situation is exacerbated by the fact that the Equal Pay Act was enacted about half a century ago, and although women currently constitute about a half of the American workforce, their compensation still lags behind that of their male counterparts. Recent statistics show that a typical American female employee working full time gets an estimated 77 cents for each dollar paid to a male worker. This implies that women make approximately 77 percent of the wage earned by men working the same duration of time. The latter statistic is annual, while weekly data places this estimate at about 82.1 percent. Irrespective of the varying nature of the statistics, the irrefutable fact is that there is significant inequality between men and women in terms of wage allotment. The gender-oriented wage disparity has spurred interest among scholars and other stakeholders, to determine its possible causes. This paper provides insight into the wide array of causes of compensation inequality between the two sexes put forth by various scholars. Causes of the Wage Gap between Men and Women in the United States Various approaches have been utilized by researchers to determine causative factors of the gender wage gap. Key among these approaches is multivariate statistical analysis, as well as, focused analysis of statistics. The former examines multiple variables to estimate the extent to which a combination of factors contributed to the general wage gap, while the latter examines specific determinants of wage adjustment aimed at catering for cost differences associated with various workers. From the multivariate perspective are possible causational factors like widespread discrimination in the American labor market, as denoted by scholars like Ruiz and Rivera (2009), as well as, occupational disparities pointed out by Boraas and Rodgers (2003). These and other potential causes of the gender compensation gap are addressed in detail in the subsequent subsections. Occupational Disparity Judging from trends in the work environment, women and men have opted for notably distinctive occupations. Consequently, the proportion of female workers varies significantly among diverse occupations. Various terms have been utilized by researchers to characterize this tendency including occupational sorting, selection, crowding, and segregation. Different researchers have independently obtained results from statistical analyses of varying data sets, which consistently show that the gender wage gap is largely attributable to the differences in occupations chosen by male and female workers (Boraas & Rodgers, 2003). Female workers primarily dominate occupations that proffer relatively low salaries like teaching, nursing, secretarial positions, and clerks in retail outlets. In contrast, men principally work in occupations that offer comparatively high compensation hence most tend to be scientists, doctors, engineers, lawyers, and company executives, among other high-ranking professions. As a result of this disproportionate propensity to work in occupations that are notably different, the average wages earned by women are generally lower than the mean compensation accrued by men. In further support of the occupational disparity theory, statistical analysis findings by Joy (2006) indicate that the selection of males and females among various professions starts with their respective choice of academic disciplines. While most men choose disciplines like engineering, medicine, and science, among other majors deemed relatively difficult, women mainly opt for enrollment in education and arts. This disparate enrollment of men and females in these disciplines lays the foundation for their respective dominance in affiliated occupations and the ultimate difference in the level of compensation. The variance in occupation selection is undoubtedly a feasible explanation of the gender wage gap, as is further reinforced by the fact that it has narrowed over the years following continuous efforts by women to venture into male dominated professions (Mulligan & Rubinstein, 2008). This shows, however, that occupational difference cannot serve as the sole explanatory factor of the gender pay gap, since it fails to account for the current difference in compensation between males and females in the same profession. Other potent causes are, therefore, explored further hereunder. Women Discrimination in Hiring Gender discrimination or prejudice in the recruitment process refers to the tendency of employers to prefer a certain type of worker, while excluding another, solely on the basis of a candidate’s membership to either sex. Such discrimination may occur in two forms, that is, taste or statistical prejudice. In case of the former, an employer may have a personal preference of men over women employees, whereas in the case of statistical discrimination, the employer could wield wrong information about potential female candidates. As a result of statistical discrimination, employers anticipate future failure based on preconceived elements of potential job candidates’ identity as females. This means that an employer overlooks the female candidate’s qualifications and past experience, out of fear that her identity will impede her performance capability. Goldin and Rouse (2000) discovered from their research that in most situations when assessors of job applicants saw potential job candidates’ gender, there was a high likelihood of selecting men than women. In cases where the evaluators had no information about applicants’ gender, the number of female recruits increased significantly. This is a clear indicator that women can easily be overlooked in recruitment for well-paying jobs. The possibility of gender pay disparity is further reinforced by findings from research conducted by Ransom and Oaxaca (2005). The scholars found out after eight years of data collection from a grocery store that there was a pattern of gender disparities during recruitment, as well as, in subsequent employee efforts to advance upward in the organization’s management hierarchy. Women in the store suffered significant penalties compared to men, with most failing to get promoted owing to individual attributes linked to their gender identity. Discrimination of women and subsequent gender compensation variance is further denoted in a report compiled by the Committee on Science, Engineering, and Public Policy (2007). The committee found out that, professional females in engineering and science fields are impeded by bias in employment and inequality in compensation, among other unconscious yet widespread forms of prejudice. Judging from these studies, it is irrefutable that there is a wide array of inexplicable factors that contribute to women’s lower compensation, compared to their male counterparts. Overall, these unexplained aspects point to overt prejudice against women. Difference in Work Experience The gender pay gap is also partially attributable to the disparity in labor market experience between women and men. Given the conventional division of labor on the basis of gender within familial and societal structures, women tend to garner less work experience than their male colleagues. In addition, women have lower motivation to invest their time and energy in work-oriented education and job training than men. The latter is due to the fact that females anticipate short and intermittent work lives, as they seek to take training and work breaks in order to take care of their families. As a result of the lower work experience, women have diminished human capital investment hence less wages relative to those earned by men. It is also imperative to take note of the fact that traditional labor division relegates women to spending longer hours dealing with home responsibilities. This effectively decreases the effort that women exert in their respective jobs, compared to that which is applied by men in similar fields. The fewer number of hours worked by women also impedes their productivity, especially when weighed against that of men, thus decreasing their wages and the prospects of earning more with additional experience. This dimension of work experience is particularly influential, since women may avoid jobs that require significant investment in skills deemed unique to a specific enterprise. Women tend to shy away from these jobs because the benefits of such an investment can only be enjoyed if one remains with the same employer, which is not guaranteed for a female with other duties. In tandem with female employees’ reluctance, an employer may not be keen on hiring women for these long-term jobs, for fear of failing to reap maximum returns from costs incurred in training and skill development. Inability to Negotiate Salaries A part of the selection and recruitment process into any job includes the salary negotiation since different individuals would want to be paid differently depending on the education they have as well as their job experience. According to Vedantam (2007), women are not adequately equipped in salary negotiations in comparison to fellow male employees. As a result, there is a possibility that they fail to adequately negotiate salaries. This incapacity is perpetuated by discrimination experienced from male executives during the recruitment, selection and later induction process. Vedantam (2007) points out that many of the male bosses in American corporations tend to avoid working with female counterparts who strongly negotiate payments. There seems to be a consensus among majority of these male employers that women are supposed to accept the compensation stipulated by the firm, failure to which they will not be considered fully qualified to be part of the company’s task force. Further, in the research Vedantam (2007) found out that the number of males who would seek remuneration increment if promised a fixed wage amount was four times higher than that of women. This clearly shows that men are more confident, hence more capable of securing themselves high salaries compared to their equally qualified female counterparts. There is also a possibility that different organizations take advantage of this inability of women to make work demands, with the ultimate outcome being that women get lower compensation than men. Some scientists have, in turn, stepped in to clarify this fact by articulating the fact that the reason why women are not as demanding and aggressive as men is due to their genetic predisposition and also because of societal gender socialization, which assigns women a nurturing demeanor. In a society that is still largely patriarchal, the boy child is brought up with widespread expectations that he should be tough and capable of demanding for his needs, unlike the girl child who is expected to be submissive and adherent to structured rules. The Risk Job Factor and Job Positions Held Different economists of the world reveal the fact that the higher the risk in a certain job, the higher the wage pay. According to Blau and Kahn (2000, women are known to avoid high risks not only in the daily life but also when evaluating jobs available in the market. In America for example not until recently, high risk jobs such as ship captaincy and piloting were primarily assigned to males and not females. Still, the number of male ship captains in America is still higher as compared to that of their female counterparts. Such high risk jobs have more salary allowances than jobs thought to pose a lesser threat to workers. In the American job market, remuneration allotted to such jobs and job positions almost doubles the basic salaries of conventional jobs, to which most women and consigned. The act of avoiding high risk jobs by the American women has contributed immensely to the difference between the males and females in the American economy. Men who occupy such positions end up getting better pay than women in other jobs within the labor market. Other than the job risk factor, there is the element of education risk avoidance. Majority of women tend to avoid the difficult and demanding education fields, usually associating them with risky employment opportunities and overwhelming effort. In contrast, men embrace these challenging academic disciplines, effectively laying a foundation for better integration into the high risk and high paying segment of the labor market. This trend is evident from male dominance in the fields of engineering and computer science, among other scientific and mathematical fields. Such education spheres are associated with better job positions and equally lucrative compensation, compared to other education fields such as the social sciences and arts. The higher pay is perhaps ascribable to the risk and complexity linked to constituent tasks. It is, however, vital to note that there are women in the same fields who exhibit equal competence to male colleagues, but still get less pay. This serves to reinforce the discrimination theory and the misconception that men put more effort in these risky jobs. There is also a prevalent yet mistaken notion that men have more familial obligations to provide, hence warranting higher salaries than women. The latter assumption overlooks the fact that women are also primary providers, especially in contemporary America, where the number of single mothers with widely acknowledged careers is growing progressively. Family Obligations and Career Interruptions Women, unlike men, have a higher likelihood of taking breaks in employment, in order to take care of family responsibilities. Motherhood is perhaps the greatest of these obligations and subsequent career interruption. This is because a woman not only has to go for maternity leave, but she also has to consistently take care of the child, especially if there is no other caregiver. This implies taking prolonged work leaves, which disrupt experience acquisition and skill development. Consequently, although most women may strive to balance work and family life, the limited experience and inability to meet requisite expertise in employment denies them an opportunity to get compensation that is as high as that of male workers that have worked consistently in their respective job posts. Baseline statistical analysis results from Budig and England’s (2001) study show that getting kids is linked to a 7.3 percent wage reduction for mothers, especially in corporations that do not have paid leaves for their workers. The researchers proceed to indicate that mothers’ absenteeism from work and resultant reduced acquirement of crucial experience, wages further decrease by 4.7 percent. On additional consideration of job features that may seem likeable to mothers, like flexible work times and part-time job status, salaries decline by 3.7 percent. The statistical and analytical information in the preceding paragraph clearly demonstrates that men are in a better position to earn more than women, since they have a lower probability of going on prolonged job leaves. The difference also points to the absence of policies and company standards that could protect women from career setbacks, even as they make concerted efforts to maintain their family lives. Provision of allowances to women during and after maternity leaves could go a long way towards narrowing the gender remuneration gap, while giving them incentives to engage in work experience bolstering programs. Nonetheless, instead of adopting these potentially productive measures, some companies go to the extent of dismissing or failing to hire women for fear of incurring losses when they hire replacement staff during motherhood related leaves. Conclusion Economic research identifies the numerous factors proven to contribute and widen the gender compensation gap. Judging from the discussion, majority of these factors revolve around the differences in behavior and choices of males and females, as they attempt to balance their professional, individual, and family responsibilities. The most notable factors include varying occupation choices, gender discrimination, and motherhood among other potent career disruptions, work experience, as well as, overall commitment to individual development efforts aimed at increasing one’s own value as human capital. Other factors include salary adjustments inherently linked to employment, such as ability to work overtime and extra benefits associated with one’s job position. It is virtually impossible to conclusively link distinctive explanation factors to the disparate compensation between men and women in America. All the same, one can assertively conclude that, in combination, these factors contribute significantly to the gender compensation gap. References Blau, D., & Kahn, M. (2000). Gender Differences in Pay. The Journal of Economic Perspectives, 14(4), 75-99. Boraas, S. & Rodgers, W. (2003). How does Gender Play a Role in the Earnings Gap? An Update. Monthly Labor Review, 9-15. Budig, M. & England, P. (2001). The Wage Penalty for Motherhood. American Sociological Review, 66(2), 204-225. Committee on Science, Engineering, and Public Policy. (2007). Beyond Bias and Barriers: Fulfilling the Potential of Women in Academic Science and Engineering. Washington, DC: The National Academies Press. Goldin, C. & Rouse, C. (2000). Orchestrating Impartiality: The Impact of "Blind" Auditions on Female Musicians’ The American Economic Review, 90(4), 715-741. Joy, L. (2006). Occupational Differences between Recent Male and Female College Graduates. Economics of Education Review, 25(2), 221-231. Mulligan, C. & Rubinstein, Y. (2008). Selection, Investment, and Womens Relative Wages over Time. Quarterly Journal of Economics, 123(3), 1061-1110. Ransom, M. & Oaxaca, R. (2005). Intrafirm Mobility and Sex Differences in Pay. Industrial and Labor Relations Review, 58, 219-237. Vedantam, S. (2007). Salary, Gender and the Social Cost of Haggling. Retrieved from http://www.washingtonpost.com/wp-dyn/content/article/2007/07/29/AR2007072900827.html Ruiz, L. & Rivera, A. (2009). Wage gap by gender: Puerto Rico and other countries. Inter Metro Business Journal, 5(2), p. 27. Read More