The Gender Wage Gap

Scott Rae: Welcome to the podcast Think Biblically: Conversations on Faith & Culture. I'm your host, Scott Rae, dean of faculty and professor of Christian ethics at Talbot School of Theology here at Biola university.

Scott Rae: We're here with a special guest today, Dr. Angela Dills, who is professor of economics and holds the Gimelstob-Landry Distinguished Professor chair in regional economic development, that's kind of a mouthful to say, at Western Carolina University. And you've been at Western Carolina for how long?

Angela Dills: I've been at Western Carolina for three years.

Scott Rae: Three years?

Angela Dills: Yes.

Scott Rae: Okay.

Angela Dills: Yeah.

Scott Rae: And one of the things that you have specialized in is the area of economic inequality, particularly as it concerns the gender gap, or the presumed gender pay gap, between men and women in the workplace. So thank you for coming on with us and we really appreciate your expertise in this and a chance to talk about a very controversial subject.

Angela Dills: I'm happy to be here. Thank you.

Scott Rae: So given, Angela, this is such a controversial subject, let's start with the facts, okay?

Angela Dills: Great.

Scott Rae: So what do we know about the connection between gender and wages? Sort of spell out the facts for us.

Angela Dills: Great. So most people have probably heard a statistic like women earn 80 cents for every dollar that a man makes. The number last year was 81.8%, so women, on average, earn 81.8% of what a man earns. And the way they come up with that number is, is what they're looking at is among all full-time, full year workers, they're going to take the median man and compare the median man to the median woman. So-

Scott Rae: Okay, now, spell out, what do you mean by the median for that?

Angela Dills: Great. So to find the median man, they're going to take all the male full-time, full year workers. They're going to line them up from lowest earning to highest earning, and then take the person in the middle.

Scott Rae: Okay.

Angela Dills: So the median man earns more than 50% of all men and less than 50% of all men. So that median man, we're going to compare it to the median woman, and the median woman earns about 80%, 82%, of what a median man earns. That's a fact.

Scott Rae: Okay.

Angela Dills: It's a fact that's frequently presented in a somewhat misleading way, but among all men and women, women earn 82% of what men earn. Nobody's arguing that fact. That's the first thing we know, women, on average, earn less than men, okay?

Angela Dills: We know a couple of other facts. One is that that gap has gotten smaller, it's significantly smaller than it was-

Scott Rae: Over how-

Angela Dills: Over 40 years.

Scott Rae: Okay. Right.

Angela Dills: And the gap is larger if we look at older workers than it is among younger workers. So the gender wage gap is-

Scott Rae: What's the reason for that, that there's a bigger gap among older workers? How do you account for that?

Angela Dills: So the bigger gap among older workers is driven mostly by one big thing that ends up feeding into a lot of other things, which is that women have babies. So the vast majority of the gender wage gap today is really a motherhood wage gap. When women have children, their earnings suffer, and that gap sort of accumulates over their lifetime.

Angela Dills: And their earnings fall because some women leave the labor force when they have a baby to take care of their children. Or even if they're not leaving the labor force, maybe they're still working full-time, but they're working fewer hours than they were before. And those fewer hours mean they're accumulating less experience, they may be viewed differently in the workplace, and all of those things are leading to lower wages compared to their male counterparts.

Scott Rae: Okay, so is this what is commonly meant by a gender wage gap?

Angela Dills: So I think it's a tricky part to think what does the gender wage gap refer to. If you're listening to the media, if you're reading the popular press, a lot of them really are just talking about that 82% of, on average, women earn less than men.

Angela Dills: When economists talk about a gender wage gap, they're generally talking about something a little bit smaller than that, which is, if we took two comparable people in comparable positions, in similar industries and occupations, how do their wages differ? And so we can talk... But those are really two different things.

Scott Rae: Okay.

Angela Dills: The big gender wage gap that most people have referred to is that 82% number.

Scott Rae: Okay. But that's a pretty significant difference in how that's viewed.

Angela Dills: It is.

Scott Rae: Okay.

Angela Dills: It is.

Scott Rae: I think that's a part of what I want to get into in this.

Angela Dills: Yes.

Scott Rae: So let me ask you a second question just about sort of what we know about this.

Angela Dills: Great.

Scott Rae: The median discussion I think is really helpful statistically, but what are the things that actually determine what a person gets paid?

Angela Dills: Right. So there are two big items that are going to determine how much it person gets paid. The first is the characteristics of the worker, and the second is the characteristics of the job. So I'm going to take those two separately.

Scott Rae: Okay.

Angela Dills: Alright. So workers who have more schooling, workers who have more training, workers who have more experience, workers who have skills that are particularly valued in the labor force, particularly maybe quantitative skills, those kinds of characteristics of the worker mean that that worker earns more money. So if you go to college, most people go to college anticipating earning more money and there is a payoff to going to college. So schooling raises your wages.

Scott Rae: Okay, so would it be fair to say that all of those factors you named would actually make a person better qualified?

Angela Dills: Yes.

Scott Rae: For a particular job?

Angela Dills: They make them more [crosstalk 00:05:58], yes. Yes. So all of those factors build what economists referred to as human capital, so they're building the productive capacity of the worker, they make them more productive in their jobs, and it's because they're more productive, the employer is willing to pay them more.

Scott Rae: Okay. What about the second part?

Angela Dills: So the second part is the job characteristics. So people who work in less pleasant jobs, whether that's more dangerous jobs or noisy jobs, or outside jobs or physical jobs, jobs that are less pleasant pay more because otherwise people wouldn't work in them. So economists call that compensating wage differentials. In order to induce people to take a dangerous job that has, say, some risk of death or injury, we need to pay them-

Scott Rae: [crosstalk 00:06:46].

Angela Dills: We need to compensate them in order for them to be willing to do that.

Scott Rae: Such as?

Angela Dills: So such as a lot of fields that we think of as being very male-dominated, like being in the military or construction, or mining or police officers, firefighters, those are dangerous jobs. There's some risk of death or dismemberment. And if we were to look at jobs that required similar levels of skills in other ways, dangerous jobs pay more than less dangerous jobs.

Scott Rae: Okay.

Angela Dills: Okay. The other way we can think about it, which I think people sort of like the way it sounds less, is that if you're in a job that you love, that brings you a lot of pleasure because you feel like you're making a difference in the world, that's part of your compensation, and so the firm doesn't have to pay you as much for you to be willing to take the job because you're getting compensated in your good feelings.

Angela Dills: So we think a lot of female-dominated jobs like teaching or nursing, that people take a lot of pleasure in the difference that they're making in people's lives, and that's wonderful, but it also means that they don't have to be financially compensated enough in order for people to be willing to take those jobs.

Scott Rae: Okay-

Angela Dills: So the job characteristics matter, and men and women take different kinds of jobs, on average.

Scott Rae: Okay. So that would relate to artists, for example.

Angela Dills: Yes.

Scott Rae: Who get-

Angela Dills: For example.

Scott Rae: You know, I've got three kids who are artists, and God bless them, they're all making a living at it and doing great-

Angela Dills: That's wonderful.

Scott Rae: But they take immense satisfaction in that. It's what they've dreamed about doing and they're getting compensated for it, I think, based on the market demand for them. And they're freelancers for the most part, so they are fully entrenched in the gig economy, so a company doesn't have to compensate them quite as much, but I think they are willing to make some financial sacrifices in order to do the things that they had been most passionate about for most of their lives.

Angela Dills: That's a wonderful example. So [inaudible 00:09:06], it is a drawback of making a living on doing what you love, which is it may not pay that well unless you have really unusual preferences. If you love being an actuary, God bless you, you're golden.

Scott Rae: You're-

Angela Dills: Yes.

Scott Rae: Okay. So I mean, when we talk about the gender wage gap, it's not uncommon for people in the media, people in other disciplines sometimes, to jump to that conclusion, that because there's this median wage gap, that roughly 20% difference, that somehow that's the result of some form of discrimination against women. How do you assess that claim as an economist? Because surely there are instances where that claim is true.

Angela Dills: Yes, and I think that's the challenging part of kind of negotiating this conversation is that there is a wage gap, and some part of that wage gap is discrimination. We know from some very good evidence, from audit studies, from lawsuits, from experimental evidence, that women are discriminated against, and it shows up in their earnings, but that's only a small piece of the story.

Angela Dills: The bigger piece of the difference that's driving the wage gap are the different jobs that women and men have with the different job skill characteristics that women and men have. And in in depth discussions of this gender wage gap, some of that is also a question of how much of those choices are personally driven choices versus choices based on anticipated discrimination, for example.

Scott Rae: Okay. So give us some examples of a wage gap or wage difference that you would say is based on gender discrimination.

Angela Dills: I'm actually not quite sure I understand your question. Like a specific case where-

Scott Rae: Yeah.

Angela Dills: We know that it's happened?

Scott Rae: Yeah. Yeah.

Angela Dills: Okay. So one great study that happened was, maybe, mentioning artists, was among applicants for an orchestra. So that used to be that you would stand on stage in front of the judges, you would play your instrument, and they would decide who would be able to join the orchestra. They decided to change it and put a screen in front of who was playing so you couldn't identify the person playing, and it turned out that women were much more likely to get hired once the screen was placed there. Playing wasn't any different, the only difference was the judges couldn't see who playing.

Angela Dills: So we know from studies like that that discrimination happens, and that we can make some changes to reduce it. The other big source is probably... So I mentioned audit studies. So a lot of times what these audit studies look like is researchers will mock up a bunch of resumes, they will look exactly the same, but some of them will have male names on them, some of them will have female names on them, and they'll send them out and see who gets called back and who gets hired, well, who gets called back again. They're fake resumes-

Scott Rae: Yeah, yeah, yeah.

Angela Dills: So nobody's getting hired.

Scott Rae: Yeah.

Angela Dills: But in some cases, they'll train graduate students to go and apply for jobs and sort of do so in a very systematic way in terms of how they're presenting themselves and how they're talking, but they'll send some male graduate students and some female graduate students and see who gets the job, and then, what their offers look like. So those kinds of audits studies also tend to find that women are less likely to receive offers or receive lower offers.

Scott Rae: Okay. But you say that's a piece of the puzzle, but a small one?

Angela Dills: It's a small piece of the puzzle. A lot of what's driving the difference are differences in hours worked, and differences in industries and occupations that people are choosing to go into. Men are much more likely to work long hours and there is, increasingly, a very large return to working long hours, where long hours is working more than 50 hours a week, and that's driving some of this.

Angela Dills: And then, men and women are choosing different occupations, and men are tending to sort into professions that are higher paying professions and women are sorting into ones that are lower paying professions.

Scott Rae: Okay. Do you see that changing-

Angela Dills: Yes.

Scott Rae: Over the last, what? 20 years or so?

Angela Dills: Yeah, certainly over the last 30 or 40 years, it's changed a lot, but a big part of the reduction in the gender wage gap happened in the 80s, and you can see a huge change too in the kinds of subjects that women are choosing to major in in college. We see big switches and-

Scott Rae: More STEM types of fields?

Angela Dills: More STEM types of fields like biology. It used to be heavily male-dominated, now it's majority female. There's some fields that are still heavily male-dominated. Engineering is very male. Computer science is an interesting field in that it went from 10% female to maybe 30% female, and then it dropped back down again.

Angela Dills: And so there's some fields that are a little bit different, but certainly we've seen some changes in women going into fields that are historically male-dominated, but there's still significant difference in the kinds of occupations that men go into and women going into.

Scott Rae: Okay. And you would say those are primarily driven by the fact that women have babies and men don't, and some of the choices that are made? Or is it more complicated than that?

Angela Dills: I suspect that most 18 year olds, when they're choosing what to major in, maybe aren't thinking about babies.

Scott Rae: Yeah.

Angela Dills: Some of them are. Some of them are thinking, "I want a career, because I know I'm going to have a family, and I want a career that's family-friendly." And I'll come back to that in a little bit. I think that why women choose some majors over others or choose some fields over others is part of what we're still trying to figure out. Economics, for example, is still very male-dominated, and there's a lot of interest in trying to bring more women into the field, but that hasn't really changed for economists for 20 years maybe, which is frustrating to the profession-

Scott Rae: Yeah.

Angela Dills: And we can't quite figure out why. We know that college students, female college students, are very sensitive to getting bad grades and they take that as a sign they shouldn't major in econ, but economists are really good at giving bad grades, so-

Scott Rae: [crosstalk 00:16:03].

Angela Dills: And men don't seem to have the same response to getting a B as women do. And some of that, I think, we're less clear as to why the choices are being made initially. Some of that may be climate. I mean, certainly we hear horror stories in some fields about how toxic the work climate is in some disciplines, in some fields, for women, and I don't doubt that that is part of the story as well. Yeah.

Scott Rae: And we hear a lot about a glass ceiling-

Angela Dills: Yes.

Scott Rae: For women in the c-suite and executive suite. How do you assess the claim that that glass ceiling is due to gender discrimination?

Angela Dills: Yeah. So I think that's one of your hardest questions. I think there's two parts of it, two pieces of evidence that sort of bring to bear on that question.

Angela Dills: One is this question of overwork. So being in the c-suite takes a lot of long hours, it takes a large commitment to your job and, in most cases, that means having someone at home to help run the rest of your life, making sure there's meals cooked, or if you have children, that children are taken care of. And men are much more likely to have that person at home doing those for them and so they're more likely to be willing to work those long hours that it takes to be a c-suite executive. I suspect that's part of the story, is sort of this leaning in, or not leaning in, tendency of women.

Angela Dills: But there's also really, like all of the social scientists are sort of working on this question, so there's also really interesting research in psychology that shows if you took a job description of two people and changed their names, and indicated, "Here's a really capable person, how do you feel about them," when women are described as being very capable, they're viewed as not very nice, and when men are described as being very capable, nobody thinks anything of it.

Angela Dills: And so, I do think some of this is attitudes about sort of promotability of women in leadership roles that I think is still a sticking point for some women.

Scott Rae: So what I'm hearing is the suggestion that there's still a double standard that's applied to women in the workplace, with some of the traits that would be either neutral or complimentary about a man, would be taken negatively about a woman.

Angela Dills: Yes.

Scott Rae: It that true?

Angela Dills: I think that's what the psychologists are finding. Yes, that's true. And it's a tricky line to walk if you work in a field where your output isn't that measurable, right? If what you're doing is fixing windshields or making widgets in a factory, we can see how productive you are and we can pay you accordingly, your employer can pay you accordingly.

Angela Dills: If what you're doing is providing a vision and leading a team, it's a lot harder to measure how effective you are at that, how much of that is your effectiveness as a leader or your team's effectiveness? And so, when your production is hard to measure, it's easier to let your implicit or explicit biases drive your behavior.

Scott Rae: Okay. And I know we hear this among college-aged women who I think, understandably, have concerns about how they're perceived. Because things that would be said about a man, that they're driven or they don't take nonsense off of people, those kinds of things would often be said of a woman, "Well she's arrogant and overbearing," or sometimes even less-

Angela Dills: True.

Scott Rae: More derogatory than that.

Angela Dills: Assertive seems to be a word that applies very differently for women than men.

Scott Rae: Yeah.

Angela Dills: Yes.

Scott Rae: And so you see that as still-

Angela Dills: I think it's still-

Scott Rae: Still a factor?

Angela Dills: A factor. Although I think it's changing. Even if you look at sort of popular culture in the 80s, women who were in professional roles in the workplace did that by pretending to be men, right? And dressing like a man and trying to act like a man, and I think it was a reasonable way to try to integrate into a workforce that was very male-dominated.

Angela Dills: And I think now we're kind of, talking outside of my role, I guess, as a researcher, but I think now the culture has kind of shifted towards, "Well, yeah, but we're different. We have our own strengths and skills. I don't need to pretend to be something that I'm not, but can I find a way to lead that's me and is accepted?" And I think that's a great shift culturally of sort of women leading in their own way, just as men are leading in their own way, and finding ways to bring those strengths to the workplace.

Scott Rae: I remember, years ago, one of the classic cases on gender discrimination was in public accounting, the case of Ann Hopkins, where she was denied a partnership because she was rude, arrogant, overbearing, many of the same traits that would be used positively about the men-

Angela Dills: Yeah.

Scott Rae: In her firm, and she sued successfully. And the partners also said some other things that were very clear to be gender discrimination. But I think that she was a good example of what you're describing. You know, she realized that in order to compete in a man's world, she had to be a man.

Angela Dills: Yes.

Scott Rae: And it's encouraging to see that changing, that women are feeling more comfortable in their own skin in the workplace and allowing their own skills and personality to come out. And do you see us appreciating that in the workplace more for what it is?

Angela Dills: More-

Scott Rae: But a ways to go [crosstalk 00:22:35].

Angela Dills: I mean, I think there's still a ways to go, but I mean, I do think the climate has gotten a lot more favorable to women than it was 30 or 40 years ago. It's a very different culture in a lot of good ways for women.

Scott Rae: Yeah. So considerable progress made-

Angela Dills: Yes.

Scott Rae: But still a ways to go. So here's... I mean, I hear people say this all the time, "Men and women are doing the same job, they should be paid the same." Right?

Angela Dills: I completely agree. Absolutely. But I'm going to-

Scott Rae: Or is it more complicated?

Angela Dills: Well, so I would add one little qualifier, which is that if men and women are in the same job and producing the same, they should be paid the same. But what's really challenging here is even if we looked at full-time workers, you know, men, on average, are working 10% more than women are in terms of hours every week. And then the question is, are those actually productive hours? Right? So are women getting the same amount of work done in fewer hours? In which case, yes, of course they should be getting paid the same.

Angela Dills: But productivity matters, right? Your employer is only willing to pay you as much as you are increasing their revenues by. If they pay you more than you're increasing the revenues by, they're losing money by having you as an employee, and they're just not going to be willing to do that. So it is important to think about how productive your workers are.

Scott Rae: So you would suggest there might be limits to the degree to which employers are going to be willing to restructure the workplace to be more friendly to women who are making those choices?

Angela Dills: So a lot of the reasons women are working fewer hours is because they're also dealing with family obligations, household obligations, and someone has to do that work. And historically, it's been done by women, so in a lot of households, it ends up being done by women. Not all, something like 16% of stay-at-home parents now are men, so that's also changing. But if the work has to be done, the question is sort of how to split the work, right? And in a lot of households, it ends up being predominantly on one person.

Angela Dills: I suspect, especially if you look at young people these days, a lot of them want a better balance of work and life. They want to be an artist and pursue their passions. They want to go hiking on the weekends. They don't want to be tied to work constantly. So even though we tend to frame that discussion about work/life balance and more family-friendly workplaces in terms of women, I think there's a lot of benefits to men as well-

Scott Rae: Yeah.

Angela Dills: And being able to make different, or a wider variety of choices about how they spend their time.

Scott Rae: So two more questions.

Angela Dills: Sure.

Scott Rae: What are you encouraged about by trends in the workplace, in the way women are being treated and the way women are being esteemed in the workplace? What gives you hope and encouragement?

Angela Dills: So I think if you look at really young workers right out of college, 20-something year old workers, the gender wage gap is very small, once we're comparing people in similar occupations in particular, but even outside of that.

Angela Dills: But I think what I find particularly encouraging is seeing women and men sorting into a wider variety of professions because I think it's good for everybody. It's good for people to be able to do a job that they love, that fits their skillsets, that allows them to flourish at work because I think that makes people happier, to do work that they love, but it's also good for us, as consumers, because it means they're more productive.

Angela Dills: If we have women who are bad at nursing or just doing nursing because that's what women are "supposed to do", that's not good for anybody. It's not good for her, but it's also not good for us if we get bad nurses, right?

Scott Rae: [crosstalk 00:26:56] It's not good for me as a patient.

Angela Dills: Right. Right. We'd rather have her being a civil engineer or whatever might be a great fit for that person. So I think it's good for the economy. It's good for us as consumers too when people are able to better choose professions that fit their preferences and skills.

Scott Rae: Alright. And then finally, what challenges remain to be addressed concerning women in the workplace?

Angela Dills: Yeah, so I think this question about women in leadership is an ongoing one. If we look at the gender wage gap and how it's closing, it's getting stuck most at highest skilled workers, and I suspect some of that is questions about how we view high-powered women versus how we view high-powered men. And I think that's a cultural question that [inaudible 00:27:49] it's slow, but I think there's progress to be made, but I think that is probably a sticking point for a lot of highly educated people, women in particular.

Scott Rae: Well, Angela, thank you. You've given us a lot of insight into what is a really complicated question. And it's been so helpful in this segment that it's not as simple as taking the median right there in the middle and drawing all the conclusions that we can out of that. So I so appreciate your background, your expertise on this, and how you've nuanced this in ways that we might not often think about. So thank you for giving us a lot of good things to think about. There's a lot of good news-

Angela Dills: Yes.

Scott Rae: But there's a lot of challenges that still remain, so-

Angela Dills: Wonderful. Thank you very much [crosstalk 00:28:40].

Scott Rae: Thanks so much for being with us.

Scott Rae: This has been an episode of the podcast Think Biblically: Conversations on Faith & Culture. To learn more about us and today's guest, Dr. Angela Dills, go to biola.edu/thinkbiblically. That's biola.edu/thinkbiblically.

Scott Rae: If you enjoyed today's conversation, give us a rating on your podcast app and share it with a friend. Thanks so much for listening and remember, think biblically about everything.