Women nearing retirement confront pay gap
For all the strides that women have made in the workplace over the past quarter century, one sub-group has been left behind: older women.
Those within five years of the normal retirement age have made no progress relative to men's earnings since 1975, according to a recent census report. Those within 10 years of retirement have advanced exactly one percentage point; by 1999, they were earning 56 percent of what men earned.
Discrimination? Perhaps. But the findings suggest other factors are at work.
When it comes to their careers, men and women tend to take different paths. And as time goes on, those paths diverge. They separate so much in later years that some economists argue that the pay gap between men and women is misleading and very nearly irrelevant.
"It's very hard to say what the real differential is," says June O'Neill, economics professor at Baruch College in New York City and former director of the Congressional Budget Office. "If there is any differential, it's probably not very big."
"It seems to me in order to close the wage gap we've reached the point where women will have to behave exactly like men," adds Christina Hoff Sommers, resident scholar with the American Enterprise Institute.
No one expects that to happen anytime soon.
On the face of things, women get short shrift when it comes to payday. For example, the US Census Bureau calculates, based on its 2000 figures, that the average woman working full-time and year-round earned only 73 percent of her male counterpart's income. That has changed little during the 1990s, even though women are working longer, entering more lucrative fields, and delaying pregnancy compared with their mothers.
Even narrowing the education gap with men has had little effect. Every year since 1982, more women than men have earned bachelor's degrees in the United States. Nevertheless, the earnings gap persists across all levels of educational attainment, according to a recent census report.
Age plays a more important role. Among the youngest set of full-time, year-round workers (age 25 to 29), the census report found that women earn 84 cents for every $1 that men earn. Among the oldest workers (60 to 64), the gap stood at 56 cents.
Several factors explain such differences. First, women choose different and, often, lower-paying careers than men (such as education instead of engineering). This was especially true through the 1960s, when today's older women first entered the workforce.
At the time, women still faced many barriers. Well-educated females took jobs such as librarian and social worker, with little prospect for big gains in earnings, says Harvard economist Claudia Goldin.
Another factor: Through the early '70s, women married and had children earlier than their counterparts today. Such choices usually moved them off the fast track while their husbands kept advancing. When these women returned to work, they could match neither the experience nor seniority of their male counterparts.
Many of these differences persist today (though less rigidly than in the past). New mothers still drop out of the workforce much more often than new fathers do. And working women, even those without children, still bear the brunt of housework in many families.
Thus, while women perform the equivalent of a second part-time job, many husbands continue to work extra hours at the office and get ahead.
Not surprisingly, women often choose jobs with flexible hours or even part-time positions even if they don't pay as well.
Actually, women appear to do better at part-time jobs than do men (who are often graduate students needing extra income). For example, those who worked 34 hours or less last year earned 112 percent the income of their male counterparts, according to the latest government data. Even those women who worked 35 to 39 hours earned almost as much as their male counterparts: 98.6 percent.
Thus, the real pay gap looks much narrower when taking into account the different work/life paths that men and women tend to take.
"What all the academic economists do agree on is that the wage gap is something between 2 to 4 cents on the dollar," says Christine Stolba, senior fellow with the Independent Women's Forum, a conservative nonprofit education group based in Arlington, Va. That's a far cry from the 27 cent gap in the census data.
Where conservatives and feminists disagree is how freely women make those career choices.
"As long as mothers continue to make children their No. 1 priority, women are not going to earn as much as men," says Janet Skarbek, author of Planning Your Future: A Guide for Professional Women. "And that's OK as long as they have that choice." Her study of 100 recent graduates of Villanova University suggests full-time working women are far more likely to be jealous of stay-at-home moms than the other way around.
But would the same trends occur if things were really equal? asks Heidi Hartmann, a labor economist and director of the Institute for Women's Policy Research, a nonprofit think tank in Washington.
For example, access to high-quality, subsidized childcare might convince many women to stay in the workforce rather than drop out.
And if women really did earn as much as men, more families might decide that the wife should keep working while the husband stays home, she adds. "When it truly is a free choice, you're going to see more men doing it."
While many economists believe women will continue to earn less than men because of the choices they make, Ms. Hartmann remains optimistic the gap will be closed. "I honestly believe we will get to pay equity," she says. "But I think it's a long march."