Equal Pay Day Highlights Inequality

Each year, Equal Pay Day tracks how far into the next year the median woman has to work to earn what the median man earns in a calendar year. In 2020, Equal Pay Day occurred on March 31; this year it is March 24. Wow—have we closed almost a tenth of the gender pay gap in one year?

No.

The COVID-19 pandemic’s initial impact was to destroy a large number of low-wage jobs held by women, artificially decreasing the wage gap between men and women. These service sector jobs—leisure, hospitality, dining—disappeared first as the pandemic caused people to limit face-to-face interaction with strangers.

This March 24, 2021, the typical woman (receiving median pay) will, when she adds her 2020 wage to the amount she has been paid year-to-date, get the same income that her male counterpart (receiving the median male salary) will have been paid in 2020.

But not all equal pay days are the same. At the median, the gender wage gap in the United States is 18 cents – women making $0.82 for every dollar that a male makes. But among the lowest-paid 10% of workers, the male and female income gap is around $.12 or less, while among the highest-paid 10% of workers, the gap is at least 0. 28.

The median woman is not so much median as white. If we look at the first decile (that is, where she is paid more than 10% of women), she is very likely to be either Latina or African American. For an African American woman, equal pay day won’t occur until early August, and a Latina has to work until late October. For Asian American and Pacific Island women, equal pay day comes earlier, on March 9,^,but for Native American women, it doesn’t come until September 8.

The story at the ninth decile is different in its own way. The ninth-decile woman is almost certain to be white (or sometimes Asian American) and to have a college degree or two. Higher education has brought her more income but also left her further behind her male counterpart. She has to work into May to receive the same income her ninth-decile male counterpart did last year.

Why does this pattern of greater gender wage inequality exist even as the wage level rises?

At the lower end of the income distribution, there is still pay discrimination by gender, but there is an important force for gender equality: the minimum wage. A universalistic policy—think the Fight for $15—counters particularistic discrimination.

Is the greater wage gap at higher income levels the result of choices that high-income women make about family and children? No. The reality is that women entering high-paid occupations (medicine, law, finance) get lower starting salaries than new male hires. For example, women financial managers are paid only $0.64 on the male dollar.¹ In Marxist terminology, the gender disparity in the rate of surplus value extraction is higher at the upper ends of the income hierarchy. In plain English, the bosses make a bigger profit off of women in higher-paid professions.

How does the United States compare to other wealthy capitalist countries? Not very well, especially at the lower end of the income distribution.

Source: calculated from: https://stats.oecd.org/index.aspx?queryid=54751    

So, what should we do?

In a democratic socialist society, the gender pay gap would not exist. Must we wait for that utopia?

Icelandic women said no. On October 24, 2016, women in Iceland left work at 2:38 PM, the time they calculated that, if they were a man, they would have earned their paycheck. And this wasn’t the first time: on that same date in 1975 over 90% of Icelandic women did not go to work at all.

Beginning in 2018, all Icelandic companies with 25 or more employees, must, every three years, analyze their gender wage structure, report the results to the central government, and get certified as to their accuracy.

Adopting Iceland’s policy would not bring gender equity overnight, but it would shine a bright light on the gender pay gap.² And, it would be one more inroad into the prerogatives claimed by capital. From the early days of the factory, when workers were prohibited from having timepieces, through today’s effort to keep us in the dark about the patterns of gender discrimination, capital has sought power over our lives.

And then there is the unequal pay day: the date by which the typical S&P 500 CEO will be paid as much as his or her median employee is paid. This happens early on January 3, the second workday of the year.

¹To see what the gap is for a broad range of occupations, go to: https://narrowthegap.co/

²The EU Commission just proposed rules that would require disclosure of gender wage inequality.