Bernie Sanders is probably celebrating how close the gap was between him and Clinton in the Iowa Caucus last night. The senator, who aims to fight inequalities in minorities (people of color, women, LGBT, disabilities) and the welfare of the youth and the elderly, has been gaining support steadily. Anyone can visit his official campaign website to read more about where he stands on issues. There's one issue, particularly the 'facts' and its descriptive statistics, even as female (and somewhat of a feminist) I cannot bring myself to totally agree with it.
This issue is the endless 'gender wage gap" that politicians have been debating over for decades.
Does it exist? I believe so
Are the statistics correct? Most likely.
Are politicians fighting the anti-pay gap making a case based on statistics? Yes
So, they must be right? Not necessarily.
First, take a look at where Sanders stands on Gender Wage Gap from his issue on "Fighting for Women's Right" (Reference: https://berniesanders.com/issues/fighting-f...womens-rights/)
AS PRESIDENT, SENATOR BERNIE SANDERS WILL:
1. FIGHT FOR PAY EQUITY FOR WOMEN.
It is a national disgrace that women only earn 79 cents for every dollar a man earns.1 The gender pay gap is even worse for women of color. Today, African American women earn just 64 cents for every dollar a white male earns, while the figure for Hispanic women is just 54 cents. As president, Sen. Sanders will sign the Paycheck Fairness Act into law to end wage discrimination based on gender.
5. INCREASE THE MINIMUM WAGE TO $15 AN HOUR BY 2020.
According to the most recent statistics, women make up two-thirds of all minimum wage workers. Increasing the minimum wage to $15 an hour would significantly boost the wages of more than 15 million women and help close the gender wage gap.
6. RAISE THE TIPPED MINIMUM WAGE TO $15 AN HOUR BY 2023.
The federal tipped minimum wage of just $2.13 an hour hasn’t been raised since 1991. More than two-thirds of tipped workers are women. Increasing the tipped minimum wage to $15 an hour by 2023 would lift millions of women out of poverty and significantly reduce the gender pay gap.
Skipped #2-#4 as they were irrelevant to wage gap (they were about reproductive rights and childcare)
See any problem there with the descriptions? Most might say "Well it's just the median, so the extreme outliers won't skew the median". Well, true...but here are the considerations:
- Are the female minimum wage worker and the tipped minimum wage worker groups large enough so that the median salary includes their pay rates?
- Are the male minimum wage worker and the tipped minimum wage worker groups small enough so that the median salary does NOT include their pay rates?
If both answers to the questions above are yes, then sure, increasing the minimum wage would help. However, the fact is that it is inaccurate. Based on government data (Bureau of Labor Statistics), 'Hourly rate' (not limited to minimum wage) workers represent 58.7% of all wage and salary workers, and only 4% of those hourly rate workers are making minimum wage or below. So we can conclude that raising minimum wage is good for certain workers, but will NOT close the gender wage gap.
Now, one can argue this way: if the minimum wage increases, wouldn’t the wage of other non-minimum wage jobs increase as well? Yes, the cost of doing business would increase, however in order to generate positive returns or to merely break-even, businesses would mark up the prices of goods and services, which means the cost is transferred and absorbed by the customers. When price level goes up, it becomes inflation, and non-minimum wage workers would demand high wages in return. In the long run, everything would be adjusted but will also return to equilibrium. So is increasing minimum wage the answer to solve gender wage gap? Or is it more of a campaign tactic that Sanders is using in order to gain supports from the many lower wage workers? I would like to think it’s the latter.
Descriptive statistics, if used properly, can properly identify issues/problem/inefficiencies/inequality, and provide insights on what is or isn’t working. However, the misuse of descriptive statistics is misleading and deceptive, and can even cause the ill-informed to think/act based on incomplete information and biased messages. Unfortunately, politicians and the media often unintentionally or deliberately interpret statistics, make inferences, and draw conclusions only to their advantages.
Without turning this into a political debate, let’s focus on the main issue here. If gender wage gap exists, how should we properly measure this based on the data that we have? The answer is not as easy as we think.
What are the challenges?
The 79% (Refer to pg. 7 of the link provided below)
This is a very quick but rough comparison. It is inclusive of all workers, regardless of job function, location, skills (hard and soft) competency, tenure at the job, years of relevant work experience, age, education, licenses, and certification etc. The distribution of these attributes could vary based on gender but the comparison does not distinguish any of them. Also, the research report did not disclose the profile of the median earnings of female and male.
Comparison by state (pg. 9)
This is better, but it only helps a little by taking into consideration the diverse cost of living among states.
Comparison by age group, education (pg. 14, 15)
These comparisons are bit more convincing, at least they show that we are seeing gaps in every age group/education level. The difficult part would be to validate some of the soft facts, such as whether women are taking jobs that are as aligned to their education as their male counterpart; whether women are leaving the workforce at some point to start a family and returning years later; or have their male counterpart been switching jobs more often and negotiating salary more aggressively. These factors could be an explanation for some of the differences, rather than concluding it as a discrimination that women are hitting so-called glass ceiling that limits their earning potential.
Comparison by specific job title (pg. 17)
This seems to be the better comparison, but again the challenge is still there – as the other attributes/factors could still play a significant role in driving the differences in the measured result.
It is extremely difficult and complicated to properly show the accurate earnings gap between genders, if we have to take into account all factors that can be attributed to earnings. Even if all factors are being accounted for, ceteris paribus, still shows the gaps, our analysis would provide accuracy and granularity, but lose credibility.
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1 all figures are median earning based on AAUW's published result (http://www.aauw.org/files/2015/09/The-Simple-Truth-Fall-2015.pdf) the information published in this report is often used as the gender wage gap debate. It’s worthwhile to take a deep look for anyone who is interested. The report has better analysis and argument to explain the differences in the numbers than how the main-stream media with political biases choose to interpret them.
