The “$.77 on the dollar” construct is thrown around frequently, it is usually intended to be illustrative rather than precise. There are plenty of women around me who have graduated from various distinguished universities and are among the smartest, most talented of my friends and family. When we graduate from colleges like IITs, NITs, IIMs or International Universities like HEC and Columbia, we expect to have really good post-college opportunities which will open doors for us to step up the ladder of our career. To my surprise, these women were pretty much sure they were in for a life of inequality. A future of gender discrimination was awaiting them. They had a presumption of paying a 22% tax for being a woman in the workforce.
But wait. I am not blaming them. Look around us and the news we’re being peddled all day and all night. Just do a web search for wage gap and you’re redirected to a plethora of websites backing this notion with numbers. One of these webpages is the reliable United Nations weblink. According to UN, women earn a meagre 10% of world’s income, while working two-thirds of the world’s working hours. This would have been a shocking statistic if it there was any bit of veracity in it. More than 15 years ago, Sussex University experts on gender and development Sally Baden and Anne Marie Goetz, repudiated the claim: “The figure was made up by someone working at the UN because it seemed to her to represent the scale of gender-based inequality at the time.” But there is no evidence that it was ever accurate, and it certainly is not today. Now if UN’s statistics have been discredited, where do I go to look at some hard numbers?
Another couple of links that do show up are links for NOW (National Organization for Women), a US Organization. On it, again we see that famous number with the quote. “For full-time, year-round workers, women are paid on average only 77 percent of what men are paid. Women still are not receiving equal pay for equal work, let alone equal pay for work of equal value.” Now here’s the thing. This percentage tells a lot more than we think. If you thought it meant that for the same work, women with same skills, experience are only paid 80% of what men are paid, you’re wrong. This figure says something else. It is the ratio of female to male wages among full-time workers, across all kinds of jobs and regardless of the skills and preferences of the workers. That 80% is an aggregate – it is not an apples-to-apples comparison of men and women doing the same work. It is no wonder that college women buy into this 77% pay gap myth.
To debunk this number further, I’ll throw more statistics your way to let you decide. The average man spends 14% more time at work. Men choose the highest paid specializations compared to women who mainly choose jobs towards the other end and the middle of the spectrum. This figure also doesn’t take into account differences in occupations, positions, education, job tenure or hours worked per week. When all these factors are plugged in, the wage gap narrows to the point of vanishing.
Now, I’ll get some arguments here that women’s education and career choices are not truly free, they are driven by powerful sexist stereotypes. In this view, women’s tendency to retreat from the workplace to raise children or to enter fields like early childhood education and psychology, rather than better paying professions like petroleum engineering, is evidence of continued social coercion. Here is the problem: I can understand when this is said with respect to countries like India or other Asian countries. But western women are among the best informed and most self-determining human beings in the world. To say that they are manipulated into their life choices by forces beyond their control is divorced from reality and demeaning, to boot.
So why is this idea still perpetuating? One reason is the pervasive opacity about what workers are paid and the practice in most company that pay based on an individual rather than the job. Since wide discrepancies persist among people with identical job titles, it remains hard to pin down whether women really earn less for doing exactly the same work as men under exactly the same circumstance. Okay, so I have nearly convinced you that gender pay is a farce. But wait, is there equality? Not quite.
What exists in our society is something known as Gender Earnings Gap and pay gap has absolutely nothing to do with it. There is almost no evidence that men and women working in the same position with the same background, education and qualifications are paid differently. Whether it’s the Target Corporation, BASF, Facebook, Reliance or McDonald’s, there is almost no evidence that any of those organizations have two pay scales: one for men (at a higher wage) and one for women (at a lower wage). Of course, that would be illegal, and if that practice existed, organizations would be exposed to legal action. The idea that we can close the gender pay gap just by paying women more seems reasonable enough, as Facebook’s Sheryl Sandberg  has intimated. Sadly, though this isn’t in fact the correct answer. The gender pay gap does not exist because men and women are paid less for the same jobs, it exists because men and women tend to do slightly different jobs. When equal jobs being done out there is reached then we will have gender pay parity. Because, as before, we already have the same pay for the same job.
What certainly does exist is a well-documented gender earnings gap when the unadjusted median earnings of men and women are compared without correcting for any of the dozens of relevant factors that explain the natural differences in earnings by gender. Take any big company. Chances are you’re going to find earnings gap. Although men and women get paid the same for the same job, there are always more men than women in the highest-paid positions and more women than men in the lowest-paid and that is the crux of the problem according to me. More deserving women aren’t in these higher-paying positions which is a shame. Let me give you a real-life example. My father works for a government oil company. I interned there for a month and was in a refinery. I couldn’t find a single woman who worked in the office except for one. The problem is, an overwhelming majority are men who apply for these positions. Female candidates are in single digits compared to men. Women who did apply for internship moved on to service sector companies, even if it meant having a job in lower salary bracket.
The first step in solving any problem is recognizing there is one. Mrs. Sandberg’s solution would fail miserably if implemented. Women need to actively pursue jobs in these sectors and jobs to close this real gap. This gap has actually widened in these years, because not a lot of people are focusing on it. To conclude, I would like to borrow from Mark Twain, it ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.