The ongoing battle over gender equality has turned the question of the relative pay of women and men into quite the political football. Over the last few years, defenders of markets, including me, have been on the offensive, arguing that the gender pay gap is in some sense a “myth.” More recently, critics have replied that it’s not a myth and that those who think it is a myth are peddling nonsense.
It turns out that both sides have a point. Whether the gender pay gap is a myth depends upon exactly what claim either side is making. Below, I hope to sort out these various claims and make clear what we can and cannot say is true and false about the gender pay gap.
What Is Mythical?
For decades, critics of markets have trotted out the claim that women make only a percentage of what men do as evidence that markets discriminate against women. Early on, women were claimed to make only about 65% of what men do. Now that number is more like 80%. So one observation from the start is that the gap, whatever its causes, has narrowed since the 1970s.
But why would people claim this is a myth? Two reasons. First, if the critics are claiming that the 80% number means that when men and women with the exact same skills and experience and preferences do the exact same work that women get paid 80 cents for every dollar men do, they are wrong. That is not what the 80% figure shows.
Rather, that number is the ratio of female to male wages among full-time workers, across all kinds of jobs and regardless of the skills and preferences of the workers. That 80% is an aggregate – it is not an apples-to-apples comparison of men and women doing the same work. Thus, the claim that women get paid 80% of what men do for the same work is a myth.