There is no gender pay gap for Equal Pay Day

Copyright: Public Domain / Used with permission

We have Equal Pay Day – the day when women no longer earn money in the face of the gender pay gap for the year, and the basic truth we have to show to the shrieking Harridans is that there is no gender pay gap. There are differences – on average, of course, in the population – in how men and women decide to live their lives. This means that some gain more, some less along certain axes, it also means that some gain more, some less along different axes, from which we can judge income, wealth, life and benefits.

But Harridans complain:

Equal Pay Day – why women are not paid because of the gender pay gap for the rest of the year
The gender pay gap means that tomorrow women will effectively no longer earn income compared to men

This is nonsense:

On average, women earn 13.7 percent less than men and effectively start working for free on November 10.

And that's the wrong statistic. This is the comparison of male and female wages, including part-time and full-time workers. The Statistics Ombudsman also told us not to use this number. The part-time employees are predominantly female. Part-time employees pay less per hour than full-time employees, and for good reason and nothing to do with gender. This is therefore a misleading number. A more accurate value is about 9.5%. This is the difference in median pay between all men and all women in full-time employment. We should realize that this is one of the lowest in the world.

It promises to be the hottest party in the city; a huge Trafalgar Square Bash to celebrate the end of the gender pay gap.

But there is only one catch. Guests were asked to save the date – in the year 2235, the year in which the World Economic Forum said the gap is closed in the face of the current rate of change.

Labor MP Stella Creasy said the party organized by her, organized by the mayor of London Sadiq Khan, is sending a serious message.

Undoubtedly a funny gasp, but not in the least true. For on closer inspection, there is no gender pay gap. Instead, we have a difference in what people do with their lives.

On Saturday, November 10th, Equal Pay Day will be held in the UK.

After this date, women will effectively work free of charge until the end of the year because of the gender pay gap.

No, it just does not work that way. This is however

We cheer because the basic point is made that the gender pay gap nowadays largely or not at all depends on the different choices that men and women make in terms of childcare provision for their children born to each other. Where we differ is that if the choices are available and adults then meet, what is that for another, what the result is?

Did not we all want to be liberal in such matters?

No, really, it's just about kids:

The arrival of children creates a long-term gender pay gap of about 20%, which is roughly equal to labor force participation, hours worked and wage rates. In these "child penalties" we find clear dynamic impact on the profession, promotion to senior management, the sector and the family friendliness of the company for women compared to men. Based on a dynamic decomposition framework, we show that the proportion of gender inequality caused by child punishment has increased dramatically over time, from about 40% in 1980 to about 80% in 2013.

If there is no gender discrimination, we still have this pay gap:

This is where our Uber data comes into play.

The platform does not distinguish between male or female drivers. The fees do not differ a single time. It would be a breeze to try to insist that customers prefer to choose male drivers and leave less work for women.

Still, we still see a difference in average earnings. In fact, about 7 percent – very close to the more general gender gap, once we have taken into account the usual things like education level, etc. in the economy as a whole (this popular 77-cent figure is needed before any kind of corrections).

That is, in the absolute and total absence of any discrimination, we still see an income gap among the sexes. Therefore, we can not assume that every gap we can see is the result of discrimination.

No, really, I'm sorry, it's just not a gender pay gap:

Our modern world does not have a gender pay gap, there is a difference in the pay gap. On average and in the whole population, fathers do more than non-fathers, mothers less than non-mothers. This is after we have adjusted for education, age, and all observable traits beyond fertility. It is purely a family responsibility that explains this: housekeepers are subject to the same fine as mothers. More specifically, the primary nannies do less than the parents who do not.

This was pointed out in different places:

As you can see, it is marriage and, above all, having children, which means that what everyone calls the gender pay gap and what should be better described as the mother's pay gap. Now that we have correctly determined the reason for the difference in pay, we can decide what we want to do about it. Because if motherhood actually causes the gap, then all current recommendations in gender equality are really a bit strange. Equal pay in companies will not do much to influence how the birth affects income, is it?

We can even go further and try to count correctly if we could find that the gender pay gap benefits women:

Women are paid less than men. In general, this applies to the entire economy. This is what is known as a rough, unadjusted or gross gap. But we are in a market economy. Of course, people who have different jobs, work hours, or stay on the same career path are paid differently. That there are some deviations is to be expected.

Once we have corrected all these factors, we find that the gender pay gap for people doing the same work in the same organization drops to about 0.8 percent. We could attribute this number to a rounding error rather than something more sinister.

However, add non-wage rewards and:

It should be noted that, despite the same retirement age, women receive their pension for about three years longer than men. Wherever there is still a gender-specific age gap, it will be even bigger. But women are also disproportionately represented in the public sector. There is still a much more valuable contribution-based pension. There are reasonable estimates that such pensions increase up to 30 percent of public sector salaries. Or use our above definitions for compensation in the public sector.

If we add all these parts of the compensation, the gender gap could look a little different. On average, women may receive a different compensation mix than men: higher job security, greater flexibility, possibly better pensions, all at the price of some cash in their monthly salary packages.

It is really true that we do not have a gender pay gap. Once we take into account the hours worked, the direct comparison of jobs, the level of education, the number of working-age years and the gap of less than 1%. And then, if we add something that female employees earn a little more than men do, like these pensions, women might prefer it too.

But more importantly, we employers do not discriminate against or against gender. We have individuals who try to live their lives and make other choices. These choices are a bit different from gender. Even more on the arrival of children. A sexually dimorphic species makes different choices in parenting? Escape, huh?

So, what does Stella Creasy do then? Well, we came in with a comment about screeching Harridans, right?

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