Equal Pay Myths
It probably doesn’t come as news that airline companies pay pilots more than cabin crew—but according to the dogma of the gender wage gap, we’re supposed to find this fact troubling. The British government now requires companies to report their raw gender gap—that is, the difference in the median hourly wages earned by their male and female employees. Ignoring occupational differences, seniority, employment history, hours worked, or any of the countless other factors affecting salaries, these data are misleading at best. Nevertheless, when budget airline EasyJet reported a 51 percent pay gap between its male and female employees, the company knew that its reputation perched on the edge of a PR abyss.
And that’s the whole point of the exercise: simplify statistics to shock people at the seeming injustice done to women and shame companies into action; refuse to compare similar job functions; ignore the fact that, like every other airline, EasyJet’s pilots are disproportionately male, while their cabin crews skew female; forget that almost all carriers compete for the same 4 percent of the world’s female pilots; and whatever you do, don’t mention that the EasyJet CEO, who was in charge of this bigoted organization and also its highest-paid employee until retiring earlier this year, was a woman. The company should be branded with a scarlet “51 percent” until it . . . does what? Cuts pilots’ pay? Hikes the salaries of female cabin crew? Hires male attendants instead of female? Goes bankrupt?
The United States does not—yet—use such a travesty of a reporting system, but it does maintain the same illusion that a gender wage gap is, by definition, proof of injustice. Activists have declared April 10 Equal Pay Day, to protest the approximately 20 percent pay gap between men and women, which, as in the EasyJet example, tells us more about the activists’ false ideology of gender equivalence than about whether women are being treated fairly in the labor market.
The idea that innate (average) differences between men and women affect their (average) labor market outcomes is dangerous to express in some circles, as former Google engineer James Damore discovered when he found himself without a job after writing a speculative memo on the topic. But a new Stanford study, in which three economists examine male and female earnings at the ride-hailing service Uber, appears to back up some of Damore’s musings. Uber is an ideal subject for a wage-gap analysis because it uses an automatic pay formula based on the time and distance of a trip, with drivers assigned blindly to customers by an algorithm dependent entirely on their proximity. Among drivers—the corporate offices may be another matter—there is no old-boy network, no salary negotiation, and no possibility that sexual harassment affects trip assignments. Uber also offers scheduling flexibility, a perk found particularly attractive to female workers. With information on 1.8 million drivers from January 2015 to March 2017 made available to the researchers, the study is particularly robust. The authors discovered no evidence that riders preferred male drivers; women and men got the same number of cancellations and similar ratings from customers.
With all factors appearing equal, Uber should be a female workers’ paradise. Yet male Uber drivers still make 7 percent more than female drivers. Half of this gap could be explained by the fact that men choose to drive in more lucrative pay areas and to do so for more hours per week. That second part is consistent with what we already know about a pervasive gender-hours gap: in every country and in most industries, men log more time on the job than women. The reason for the remaining 50 percent of the gap, however, might have come from a list of Google-banned gender stereotypes: men drive faster. The difference in speed isn’t huge—only 2 percent—but it’s enough for men to complete more rides and accumulate more experience. Call it female risk aversion or male bravado; the upshot is that Uber-men are more productive than Uber-women. Ergo, men earn more.
Of course, driving speed is irrelevant to performance at most jobs, and risk-taking is a mixed bag, leading to innovation and big bucks in some cases and havoc in others. Another paper released this winter, by the National Bureau of Economic Research, has much broader implications for women’s earnings. Like the Uber study, it shows the wage gap to be a poor proxy for either sexism or women’s well-being. The authors analyzed the work histories of the Danish population between 1980 and 2013, and found that women’s labor-force participation, work hours, and wages plummeted after the birth of a first child, while men’s continued on the same trajectory. Over the course of their career, women earned 20 percent less than men—if they were mothers. Childless women earned about the same.
During the decades studied, the overall wage gap shrank, as women got more education and moved into more managerial and professional positions. But the “child penalty” didn’t budge. “There used to be many different reasons for gender inequality [in Denmark],” Princeton economist Henrik Kleven, one of the study’s three authors, told Slate’s Jordan Weissman. “Many of those are disappearing over time. Children is the one that isn’t changing.” Here’s the kicker from the paper itself: “Even with perfectly equal pay for equal work—a zero gap in standard decompositions—our analysis would still show large child-related gender inequality.”
Remember, we’re not talking about the United States or Italy, countries whose family-welfare policies are relatively modest. Denmark offers 52 weeks of paid leave for new parents and heavily subsidized child care once they return to work. Like other Scandinavian countries, it has a proud tradition of gender equality. Danish women rank near the top globally in educational attainment, and they’re almost as likely to be in the workforce as men. Feminists have long promised that stronger social policies would bring about gender equality. On the evidence of the study of Denmark and of other family-friendly countries, they do not. The average woman cuts back when her kids are born, regardless of whether her country offers family cheap child care.
Two caveats are necessary in any discussion of the reasons for the gender gap. As the #MeToo revelations make clear, discrimination continues to limit women’s opportunities. And companies can do more to provide flexibility in work hours and less sexually charged work environments. Taken together, however, the Uber and Danish studies provide yet more insight into the reality of male-female differences—differences that the practitioners of outrage theater, from the UK’s gender-gap reporting to America’s Equal Pay Day, do their best to evade.
