Pay equity is sound economic policy, matter of basic fairness

A new study that compares salaries of first-year male and female college graduates challenges assumptions that women’s life choices cause them to earn less than men.

In “ Graduating to a Pay Gap,” American Association of University Women researchers Christianne Corbett and Catherine Hill calculated that women who graduated in 2009 earned, on average, 7 percent less than their male classmates — after factoring for variables such as academic major choices, hours worked and compensation disparities between professions.

The long-term negative impacts of that finding matter in Maine, where women make up 49 percent of the workforce and graduate from postsecondary schools in higher percentages than men, according to the Permanent Commission on the Status of Women.

Corbett and Hill found that within the same profession, women launching careers made less than new male hires with similar credentials. For example, male business majors earned a little more than $45,000 on average, compared with $38,000 for female business majors.

The situation for female college graduates, who earned an average of 82 cents for every $1 their male counterparts were paid, is better than the national labor force as a whole. In 2011, the most recent year for which the U.S. Census Bureau provides data, women throughout the country earned 77 cents for every $1 male workers received. In Maine, women who worked full time earned 79 percent of what their male peers did.

The troubling aspect of Corbett’s and Hill’s findings is that they indicate a gender pay gap begins at a time when men and women entering the workforce should be on equal footing. Reasons typically offered to explain women’s lower earnings potential — such as leaving the workforce to have children and care for family members — don’t apply to candidates fresh off campus.

“One might expect that when you compare men and women with the same major, who attended the same type of institution and worked the same hours in the same job in the same economic sector, the pay gap would disappear,” Corbett and Hill wrote.

But it doesn’t, and while researchers attribute at least part of that “unexplained” 7 percent gender pay difference to discrimination, which can sometimes go unrecognized by both male and female employers, they say much of it relates to women’s and employers’ approach to salary negotiations.

While some employers are put off by strong female negotiators, “Men’s aggression might have been met with a more positive response because of old-school thinking that men need the salary to provide for their family,” Bates College sociology professor Emily Kane theorized.

In Maine in 2012, that logic no longer applies, and perpetuating it would be a drag on the overall economy. Women make up more than half the state’s population, and 10 percent of all households in Maine are run by single mothers, twice the number headed by single fathers.

When female college graduates who head households earn less than men with similar qualifications, they have less money available to raise their children and smaller financial bases for retirement. Hardships created by falling behind at the outset of a woman’s career affect her children’s likelihood for success and worsen her quality of life as she ages.

The AAUW study also should spur employers, educators and young Mainers preparing to embark on a career to consider why society undervalues professions, such as education, social work and caregiving, that typically attract a higher percentage of female employees.

“Just opening up traditionally male-dominated fields like engineering to women doesn’t stop us from needing people in those other fields, so while it helps address the explained part of the gender pay gap, it still tends to reward typically male domains more than typically female ones,” Kane said.

In Maine, where women live an average of five years longer than men, paying women less for comparable work contributes to elevated poverty rates among children and elders. That increases reliance on government-funded social welfare programs.

To address the problem, initiatives similar to the WAGE Project, which visits campuses to teach women to be better negotiators, could be introduced in the state’s high schools as part of the new focus on helping students make better choices about postsecondary education and careers.

With some sentiment in Congress to revise the Equal Pay Act of 1963 in a way that would impose greater government oversight of compensation equity, employers ought to take the opportunity now to prove that intervention unnecessary by implementing clear, gender-neutral criteria for what entry-level positions are worth and by committing to transparent, nondiscriminatory employee evaluations.

Aside from being a basic right, pay equity is good economic policy.