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The 77 cents on the dollar myth

dylancatlow
Posts: 12,252
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4/23/2015 3:20:25 PM
Posted: 1 year ago
When asked to justify his equal pay for equal work act, Obama always brings up the point that women only earn 77 cents for every dollar a man earns. The only problem is that the figure is totally misleading, should never be used in a million years, and Obama knows it. In fact, it's so misleading that it would be fair to criticize the whole democratic process on account of it, considering that Obama has largely been able to get away with saying it.

First, we have to understand where the figure comes from. The 77 cent figure is calculated by dividing the median earnings of full-time working women by the median earnings of full-time working men. When we make a few simple adjustments to the way this is calculated, the 77 figure approaches 90 percent. First, instead of using medium annual income (which is affected by taking time off), you look at weekly earnings. This brings it up to 82.1 percent. Next, you have to adjust for actual hours worked. The 77 figure uses the vague notion of "full-time" which means anything over 35 hours per week. As it turns out, men are twice as likely to work over 40 hours a week and women are twice as likely to work 35-39 hours per week. When you look at women who work 40 hours per week, the figure jumps up to 88 percent (the figure is even higher when you compare a man and a woman working exactly 40 hours per week). So essentially the starting point is 90 percent. When you take into account the fact that women enter lower paying careers, take time off to raise children and thus don't have as much experience, and even in the same field choose lower paying specialties, the pay gap basically shrinks to around 3 percent, which could easily be accounted for without assuming there's any pay discrimination.

"These gender-disparity claims are also economically illogical. If women were paid 77 cents on the dollar, a profit-oriented firm could dramatically cut labor costs by replacing male employees with females. Progressives assume that businesses nickel-and-dime suppliers, customers, consultants, anyone with whom they come into contact"yet ignore a great opportunity to reduce wages costs by 23%. They don't ignore the opportunity because it doesn't exist. Women are not in fact paid 77 cents on the dollar for doing the same work as men."

http://www.wsj.com...
(in order to read the article you have to copy and paste the title into google and click on the first link)
16kadams
Posts: 10,497
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4/23/2015 4:12:45 PM
Posted: 1 year ago
I think they get 98 cents on the dollar after relevant factors are controlled for.
https://www.youtube.com...
https://rekonomics.wordpress.com...
"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
Greyparrot
Posts: 14,317
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4/23/2015 5:28:38 PM
Posted: 1 year ago
At 4/23/2015 4:12:45 PM, 16kadams wrote:
I think they get 98 cents on the dollar after relevant factors are controlled for.

That means there is a 2 percent chance if you are a male that you will lose your job to a woman?
ford_prefect
Posts: 4,139
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4/23/2015 6:22:14 PM
Posted: 1 year ago
Im not a big Obama critic, but I do wish he'd stop using this terrible sound byte. Basic Econometrics proves the 77 cents argument is pretty empty. There is no real gender pay gap
16kadams
Posts: 10,497
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4/23/2015 7:12:14 PM
Posted: 1 year ago
At 4/23/2015 5:28:38 PM, Greyparrot wrote:
At 4/23/2015 4:12:45 PM, 16kadams wrote:
I think they get 98 cents on the dollar after relevant factors are controlled for.

That means there is a 2 percent chance if you are a male that you will lose your job to a woman?

lol
https://www.youtube.com...
https://rekonomics.wordpress.com...
"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
numberwang
Posts: 1,917
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4/23/2015 7:46:15 PM
Posted: 1 year ago
At 4/23/2015 7:43:25 PM, numberwang wrote:
where can i read that article for free i dont have a wsj account

nevermind i found it
dylancatlow
Posts: 12,252
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3/27/2016 4:37:43 PM
Posted: 8 months ago
A year later and candidates are still peddling it.

Welcome to democracy, the system whose only serious supporting argument is that everything else sucks more.
Greyparrot
Posts: 14,317
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3/27/2016 4:41:43 PM
Posted: 8 months ago
At 3/27/2016 4:37:43 PM, dylancatlow wrote:
A year later and candidates are still peddling it.

Welcome to democracy, the system whose only serious supporting argument is that everything else sucks more.

It's always been an exercise in confusing the concept of a "job" title with actual "work" output.

A fun political game of semantics at the expense of the public.
Skepsikyma
Posts: 8,286
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3/27/2016 7:18:54 PM
Posted: 8 months ago
At 4/23/2015 6:22:14 PM, ford_prefect wrote:
Im not a big Obama critic, but I do wish he'd stop using this terrible sound byte. Basic Econometrics proves the 77 cents argument is pretty empty. There is no real gender pay gap

Yeah, I generally respected Obama as more or less moderately competent and intellectually honest, but my respect is severely undermined every time he quips about the '77 cents' bogus statistic.
"The Collectivist experiment is thoroughly suited (in appearance at least) to the Capitalist society which it proposes to replace. It works with the existing machinery of Capitalism, talks and thinks in the existing terms of Capitalism, appeals to just those appetites which Capitalism has aroused, and ridicules as fantastic and unheard-of just those things in society the memory of which Capitalism has killed among men wherever the blight of it has spread."
- Hilaire Belloc -
YYW
Posts: 36,375
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3/27/2016 7:33:20 PM
Posted: 8 months ago
At 3/27/2016 7:18:54 PM, Skepsikyma wrote:
At 4/23/2015 6:22:14 PM, ford_prefect wrote:
Im not a big Obama critic, but I do wish he'd stop using this terrible sound byte. Basic Econometrics proves the 77 cents argument is pretty empty. There is no real gender pay gap

Yeah, I generally respected Obama as more or less moderately competent and intellectually honest, but my respect is severely undermined every time he quips about the '77 cents' bogus statistic.

I get the sense that he's just paying lip service to a political movement that can be miraculously solved by "correct" economic analysis.

I mean, this is literally exactly the kind of problem that politicians love: one that does not exist but gets people really engaged that Washington can, five years later, proclaim at their convenience to have remediated by some innocuous policy's or piece of legislation's impact.
Tsar of DDO
MattTheDreamer
Posts: 1,404
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3/28/2016 8:02:56 AM
Posted: 8 months ago
At 3/28/2016 5:52:12 AM, Axonly wrote:
The gender wage gap does exist, its just much more complex than it seems
In what way?
Greyparrot
Posts: 14,317
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3/28/2016 7:22:48 PM
Posted: 8 months ago
At 3/28/2016 8:02:56 AM, MattTheDreamer wrote:
At 3/28/2016 5:52:12 AM, Axonly wrote:
The gender wage gap does exist, its just much more complex than it seems
In what way?

The only real study that proves a slight wage gap is the likelihood that women have the balls to ask for a raise compared to men. Other than that factor, it is clearly detrimental to men if there actually existed women willing to do the same work for 77 cents on the dollar. Men would quickly be out of work in droves in the private sector, and only safe in the public sector. The market is very, very quick to take advantage of devaluations as anyone in financial investments can tell you.
Geogeer
Posts: 4,283
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3/28/2016 9:21:58 PM
Posted: 8 months ago
I never thought it was a myth! I work, but I was convinced that my wife ended up with 77% of everything I earn!

However, upon closer inspection, it would appear that she does end up with 98%.