Feminists

Groups like the National Organization for Women insist that women are being cheated out of 24 percent of their salary. The pay equity bill is driven by indignation at this supposed injustice. Yet no competent labor economist takes the NOW perspective seriously. An analysis of more than 50 peer-reviewed papers, commissioned by the Labor Department, found that the so-called wage gap is mostly, and perhaps entirely, an artifact of the different choices men and women make—different fields of study, different professions, different balances between home and work. Wage-gap activists argue that even when we control for relevant variables, women still earn less. But it always turns out that they have omitted one or two crucial variables. Congress should ignore the discredited claims of activist groups.

The misnamed Paycheck Fairness Act is a special-interest bill for litigators and aggrieved women's groups. A core provision would encourage class-action lawsuits and force defendants to settle under threat of uncapped punitive damages. Employers would be liable not only for intentional discrimination (banned long ago) but for the "lingering effects of past discrimination." What does that mean? Employers have no idea. Universities, for example, typically pay professors in the business school more than those in the school of social work. That's a fair outcome of market demand. But according to the gender theory permeating this bill, market forces are tainted by "past discrimination." Gender "experts" will testify that sexist attitudes led society to place a higher value on male-centered fields like business than female-centered fields like social work. Faced with multimillion-dollar lawsuits and attendant publicity, innocent employers will settle. They will soon be begging for the safe harbor of federally determined occupational wage scales.

This bill also authorizes the secretary of labor to award grants to organizations to teach women and girls how to negotiate better salaries and compensation packages. Where is the justice in that? The current recession has hit men harder than women. Census data from 2008 show that single, childless women in their 20s now earn 8 percent more on average than their male counterparts in metropolitan areas. If Congress is going to enact labor legislation with the word "fair" in it, it cannot limit the benefits to women. Senators may be tempted to vote for the Paycheck Fairness Act out in the mistaken belief that it is a common-sense equity bill. It is not. It won't help women, but it will create havoc in an already precarious job market.

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As an analysis, the myth of the "mancession" may have started out as an overly-stylized reading of labor market statistics. Men lost a larger share of jobs than women at the outset of the Great Recession in 2007, according to widely-reported Bureau of Labor Statistics measures tracking trends through spring 2009. This led University of Michigan economist and American Enterprise Institute scholar Mark J. Perry to conclude that there was a "historic" and "unprecedented" gender gap in unemployment favoring women by as much as two percentage points -- a gap that actually has been closing more recently as cutbacks shift from the male-dominated construction and manufacturing sectors to education, human services, and other areas where women predominate.

But as an idea, the myth of the mancession has assumed a staying power beyond what those initial numbers appeared to support: it taps into larger cultural and economic anxieties that predate the Great Recession and that have to do with changing relations between men and women. This is revealed nowhere more powerfully than in the late, great passing of the "traditional" two-parent family, in which men could expect to be the chief -- if not the solo -- breadwinners.

Of course, there is rarely just one way to read statistical measures, and on these grounds alone the "mancession" has been subject to much dispute. More fine-grained analyses of the data, for example, show considerable differences in the impact of male job loss across lines of class, race, age, and region; not all men have been affected equally by the downturn, nor women for that matter, suggesting at the very least that there is more to the so-called gender gap than meets the eye. Nor has the Great Recession shown any "favor" to women when it comes to wage losses and poverty rates, both of which are on the rise. <snip>

The myth of the mancession may not take us back to the dark days of cultural denial, but its exaggerated claims echo the old stereotype-laden, zero-sum ways of thinking that pit the fortunes of female earners against those of men. In recent months, it has stirred a minor skirmish in the ongoing culture wars between feminists and the right. Echoing the idea that men were the chief victims of the Great Recession, AEI resident scholar and author of "The War Against Boys" Christina Hoff Sommers accused feminists of "skewing" President Obama's initial stimulus plan by insisting on equal treatment for women, who in "mancession" logic did not need the jobs as much as men. Writing more recently on the AEI blog, Mark Perry similarly criticized the Obama National Economic Council for issuing its report on "Jobs and Economic Security for America's Women" in the midst of what he now refers to as the "Great Mancession", calling it "one-sided and misguided" to focus on women, when they are doing "so much better than men."

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In fact, the gender wealth disparity has been on the rise since 1998 despite the recent decline in the income gap. According to Chang, “The gender revolution has stalled, and the ways it has stalled are reflected in the wealth gap.”

The story is especially grim for particular groups of women. Never-married women own only 6% of the wealth of never-married men. More than half of all single Hispanic women in the US are what Chang calls “wealth poor,” possessing no assets or suffering from debts that outweigh the value of their assets. Single black and Hispanic women own a penny of wealth for every dollar owned by men of their race, and they own a fraction of a penny compared to white men. Because these racial inequalities are intertwined with gender, Chang warned, “Unless the gender wealth gap closes, the racial wealth gap cannot close.”

Also, marriage does not solve the wealth problem. Women often become economically dependent on their husbands and have less control over shared finances. According to Chang, men frequently manage the finances due to “deep rooted assumptions about which gender is better suited for these tasks,” and women’s economic self-sufficiency before marriage often impacts their relative power in the marriage. These disadvantages can be difficult to quantify, as marital wealth is often considered equally shared among spouses. Furthermore, women tend to outlive their husbands, and they experience more negative financial consequences from divorce than men. Half of all households are non-married, half of all marriages end in divorce, and women now spend more of their lives single than married.

What factors contribute to this troubling gender wealth gap? According to Chang, men enjoy greater access to the “wealth escalator,” which translates income into wealth at a faster rate. This wealth escalator includes perks like fringe benefits (paid vacation days, health insurance, stock options, etc.), favorable tax codes (capital gains tax, tax credits, etc.), and government benefits (unemployment insurance, social security, welfare, etc.). Women are systematically less likely to tap into the wealth escalator because of the jobs they work in and their greater propensity to work part-time. Men are more likely to attain jobs with benefits, receive higher incomes that allow them to save more, work full-time throughout their adult lives, and possess the types of assets that receive preferential tax treatment. Even if the income gap closed today, women would not be able to turn their incomes into wealth as effectively as men.

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You may recall that Ledbetter was a supervisor at a tire factory in Alabama who, after almost 20 years of employment, received an anonymous note containing the salaries of three other male supervisors. The sole woman among 16 supervisors, Ledbetter was the lowest paid person in her position, earning $3,727 per month. Salaries for the men in the same position ranged from $4,286 to $5,236 per month, despite some having less seniority and experience. Over 19 years, cumulative salary discrepancies cost Ledbetter more than $200,000 in wages.

Sadly, Ledbetter is not an exception. The wage gap costs an average woman almost a half a million dollars in income over her working years, according to Lifetime Losses, a report by Jessica Arons of the Center for American Progress. But this lifetime earnings gap is only the tip of the iceberg because it creates further inequities as lower wages translate into lower pension and Social Security benefits.

There is no doubt we need to keep working to close the pay gap between women and men. But there is equally important, if not more important, work to be done to close the wealth gap between them.

While women ages 18-64 make 77 percent of what men make, Federal Reserve data reveals they have only 36 percent as much wealth. Wealth, which is the value of your assets minus your debts, translates into your ability to take an unpaid sick day, to buy a home, and secure a comfortable retirement. Many people have no wealth at all, and some even have what sociologists call “negative wealth” — meaning the value of their debts surpasses the value of their assets. Almost one in three single women ages 18-64 has no wealth or negative wealth. In comparison, about 12 percent of married couples and 24 percent of single men fall into this category.

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Among the rich, gender equality is still far out of reach when it comes to investing the family's money.

Nearly three-quarters of wealthy men say they are better qualified to make investment decisions than their spouse, according to a survey of some 650 adults with $3 million or more in investable assets conducted by U.S. Trust, Bank of America's private wealth management division. That compares with a mere 18% of wealthy women who believe they could do a better job.

Similarly, 73% of rich men say they have a greater say in household investments like retirement funds, stocks and other assets -- compared to 15% of women.

My print column this week examines the basis for the often-repeated stat that women in the U.S. control 80% of consumer spending. It turns out that there isn’t much of a basis for it.

I found that articles and websites that include the claim either don’t attribute the information, or if they do, the sources cited said they aren’t sure where the numbers come from. For instance, some cite the management consultancy A.T. Kearney, but a spokesperson for the company said, “We have been trying to track down that source for years, but no one in the firm knows anything about it.” Others have attributed the number to Yankelovich, but Emily Parenti, director of marketing for the Futures Co., which was the result of a merger between Henley Centre HeadlightVision and Yankelovich in 2008, said that the statistic “did not originate with our research, but appears to have been manufactured by a source we haven’t yet been able to identify.” And others cite the Bureau of Labor Statistics or the Census Bureau, but spokesmen for both organizations said they don’t collect such data.

“It is not possible to say how much spending women control because so much spending is done at the household rather than the individual level,” Cheryl Russell, editorial director for New Strategist Publications, wrote in an email. “My own personal estimate, based on my analysis of the Consumer Expenditure Survey, is that women are involved in 78 percent of consumer spending. This figure is based on the share of households headed by married couples, female-headed single parent families, and women who live alone multiplied by the average spending levels of each of those household types. By the same measure, men are involved in 76 percent. There is not much difference because married couples account for the bulk of spending, and both men and women are involved in those spending decisions.”

The numbers typically originate with companies and writers who specialize in emphasizing the importance of marketing to women — who do seem to control more than half of household spending, according to some surveys, but not 80%. This isn’t academic research, and a half dozen economists contacted said they aren’t familiar with any studies that quantify women-controlled spending. “The notion of spending under ‘control’ of one group just does not make much conceptual sense to me,” Harvard University economist Lawrence Katz wrote in an email.

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Indeed, the Futures survey is one of the first ones that actually goes so far as to quantify the issue. Ira Mayer, president of EPM Communications which publishes the newsletter Marketing to Women, has attempted to find the origin of the accepted 80% figure – but has come up empty.

“There is never any sourcing of the number,” Mayer says. And yet, “it’s become accepted folklore.”

When challenged to cite corroboration, students of marketing point to the book Marketing to Women, published in 2002 by Marti Barletta, wherein the claim is made that women “handle 80% to 90% of spending and purchasing for the household.”

And yet … Barletta has never been able to cite the source for this claim, either. Instead, she considers it “one of those rules-of-thumb numbers that everyone in the industry uses.”