Dems Play Politics With Bogus 77-cent Differential in Male-Female Pay

By Michael Barone

Tuesday, April 15, 2014

An economist serving on a second-term president's Council of Economic Advisers might expect to weigh in on fundamental issues, restructuring the tax system or making entitlement programs sustainable over the long term. Barack Obama once talked of addressing such issues, and Republican leaders such as House Ways and Means Chairman Dave Camp are doing so.

But that's not what University of Michigan economist and CEA member Betsey Stevenson finds herself doing. Instead, she is defending the use of misleading statistics in support of legislation addressing a minor problem.

The legislation is Obama's latest pay equity measure, which failed to pass in the Senate last week. The misleading statistic is 77 cents, cited repeatedly by Obama as the amount women earn for every dollar earned by men.

When challenged on this by MSNBC's Irin Cannon, Stevenson admitted that the 77 cents figure is misleading. "If I said that 77 cents was equal pay for equal work, then I completely misspoke," she admitted.

"There are a lot of things that go into that 77 cents figure," she went on. "There are a lot of things that contribute, and no one's trying to say that it's all about discrimination, but I don't think there's a better figure."

Of course some people are trying to say that "it's all about discrimination"--starting with Stevenson's boss, President Obama, and including the political ad-makers preparing to cut 30-second spots accusing Republicans of a "war on women."

So Stevenson is fibbing about that. And when she says, "there are a lot of things that contribute" to male-female earnings disparities, she is indicating that she understands the weakness of using the 77 cents number.

This isn't controversial stuff. As my American Enterprise Institute colleague Christina Hoff Sommers writes in the Daily Beast, the 77 cents "does not account for differences in occupations, positions, education, job tenure or hours worked per week."

Those factors are acknowledged in a 2012 Bureau of Labor Statistics report cited by AEI scholars Mark Perry and Andrew Biggs in the Wall Street Journal. It shows that (a) men tend to work longer hours than women, (b) men tend to take riskier jobs with premium pay and (c) female college graduates tend to specialize in lower-paid fields than male college graduates.

As a result, the BLS concludes, women who worked 40-hour weeks earned 88 percent of what similar men did. Single women who never married earned 96 percent of men's earnings.

Stevenson concedes that not all the differential comes from discrimination or sexism. "Some of women's choices come because they are disproportionately balancing the needs of work and family," she told MSNBC.

By "disproportionately," she presumably means that more women than men choose to stay home to care for children. "Which of these choices should we consider legitimate choices," she asks, "and which of them should we consider things that we have a societal obligation to try to mitigate?"

This raises the specter of government bureaucrats intervening in marital decision-making, pushing more husbands to stay home with the kids. Even the Obama administration stops short of that.

The Democrats' problem is that sex discrimination by employers was outlawed by the Equal Pay Act signed by John Kennedy in 1963 -- 51 years ago. To make "the war on women" an issue and rally single women to the polls, the Obama Democrats have had to concoct new legislation putting new burdens on small employers and ginning up business, as the 2009 Lilly Ledbetter Act's extended statute of limitations did, for their trial lawyer contributors.

Such legislation attacks a problem very largely solved. The male-female pay differential for those working at similar levels has been reduced nearly, but not quite, to the vanishing point. Remaining differences result almost entirely from personal choices by women and men.

Those choices shifted sharply 40 years ago but haven't changed much lately. The percentage of mothers seeing full-time work as an ideal, Pew Research Center reports, was 30 percent in 1997 and 32 percent in 2012.

By any realistic standard the equal pay problem is minor, certainly in comparison to the growth-stifling effects of the current tax code and the unsustainable trajectory of current entitlement programs.

But this president, unlike his two predecessors, has chosen not to address such major problems in his second term. And so Betsey Stevenson has to defend the indefensible 77 cents statistic.