With all the talk about the so called Gender Wage Gap I wanted to break it down into more simple terms in hopes it might enlighten some.
“The gender wage gap is unadjusted and is defined as the difference between average earnings of men and women relative to average earnings of men.”
Uncle Jan decides he wants to start a business. He mortgages his house and borrows $1 million dollars from the bank. He forms a company and decides to pay himself $80K per year. This seems fair as he is taking all the risk. If the company fails he will lose his house and be bankrupt.
He hires two full time employees, one man (Tim) and one woman (Sue). Because they are both highly qualified and it is the law, he pays them each $60K a year because that is a fair wage for that position.
So the average earnings of men are $70k and the average earnings of woman is $60K. This is a Gender Wage Gap of 14%. Sue is depressed, but is Sue being discriminated against? No, she is making the same salary as a man with the same job description.
Business is going great. So Uncle Jan hires a full time project manager. He hires the best person he can find, a woman (Tina). He pays her $70k a year because that is a fair prevailing wage for that position.
So now the average earning of men is $70k and the average earning of woman is $65K. This is a Gender Wage Gap of 7%. Sue is ecstatic. As an ardent feminist she praises Uncle Jan as a male ally. She thinks Uncle Jan is an awesome guy for cutting the Gender Wage Gap in half. But is Sue making any more money? No, she is making the same salary as a man with the same job description.
Business continues to go well. So Uncle Jan doesn’t want his main staff to be answering phones, writing memos, etc. so he hires a full time secretary/ administrative assistant for each employee. He advertises far and wide but the only people who apply are women. So he hires four female secretaries/ administrative assistants (Ann, Amy, Molly, and Jen) and pays them the fair prevailing wage of $40K a year.
So now the average earnings of men are $70k and the average earnings of woman are $48K. This is a Gender Wage Gap of 31%. Sue is devastated. She feels betrayed, but is she being discriminated against? No, she is making the same salary as a man with the same job description.
Sue is so upset that she marches into Uncle Jan’s office and complains. Uncle Jan says “what are you complaining about? You are being paid the exact same amount as Tim.” But, but, but the “Gender Wage Gap” she says. Jan replies “Tell me who is being treated unfairly?” “You are being paid more than a secretary because you are more qualified than them, yet less than a project manager because you are not qualified for that position.” Uncle Jan goes on, “You make the exact same money as a man (Tim) for doing the same job, what do you want?”
There you have it. Who is being treated unfairly? Who is being discriminated against? In fact, the demographics of the office are 66% female. Uncle Jan has given 6 women jobs paid at the prevailing fair wage.
Why is this so hard to understand.
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sjt1975 1 year, 10 months ago.
