So much public discourse surrounds the “gender wage gap,” or the national average of a woman’s income compared against that of a man. Many tout the statistic that women make seventy seven cents for every dollar a man makes. From big-name celebrities to former president Obama, many decried the wild injustice that seemed to be captured in that small statistic. However, as is usually the case, there are some other factors at play that could change the whole perception about what that number really means.
Many believe that the source of the cost is pure, unfettered discrimination, but a series of laws have prevented such blatantly bad behavior and in fact made it easier to sue employers on the basis of discrimination — and yet, that number remains the same.
A popular theory deals with a more sociological phenomenon — that women don’t argue for higher wages the way men do. Some say that it has to do with how women tend to underestimate their abilities whereas men tend to overestimate their abilities. Others point to women’s tendency towards temerity, whereas men are culturally more encouraged to speak and argue. However, according to Claudia Goldin, this theory also fails to hold water. If this were indeed true, there would be a pay gap for entry-level jobs as soon as young professionals leave college, but one doesn’t exist. The gender wage gap we all know and love doesn’t usually appear until workers near the age of 30.
Still others argue that women self-select into lower-paying jobs. Again, there are some historical truths to that, as women were often excluded from more cognitively demanding jobs until after World War 2 and relegated instead to the likes of teaching and sewing, which do not pay as well. Again, though, when put to the test, this, too, fails to hold water. Goldin noted that, even if we did even out the distribution of men and women in both high and low paying professions, we would only fix about 25% of that gender pay gap.
The real culprit, as it turns out, is the cost of time flexibility — that is, just how expensive it is for workers to work hours that are conducive to raising a family. In industries where one worker is almost completely replaceable with another, the gender wage gap is low. Take programmers, for instance, or even nurses. On the whole, two programmers in the same job should both have the same knowledge to do the work assigned. Similarly, two nurses can both do the exact same work, and it doesn’t matter which one does it. As such, those industries can offer their workers more time flexibility, so their “gender pay gap” is much smaller.
However, now consider a real estate agent, or a piano teacher. In those jobs, the actual person matters more, so one person’s missing work could derail the whole structure, lose a potential sale, and have some reverberating consequences on reputation. Time flexibility in jobs like these is much more costly, and thus they exhibit a wider gender pay gap.