April 8, 1999, was dubbed Equal Pay Day by the National Committee on Pay Equity, which joined the National Organization for Women and the AFL-CIO to try to persuade the nation that women are paid only 74 cents on a man's dollar. Their organizational literature proposed stunts such as selling hamburgers for $1 to men but for 75 cents to women; selling cookies with one quarter removed; distributing dollar bills with holes in them to reflect the gaps in women's pay; and organizing a New Year's party on April 8 to recognize that women have begun a new year after catching up to men's earnings from 1998. Such claims draw media attention, but do not accurately describe women's compensation in the American workplace.
At about the same time, the AFL-CIO and the Institute for Women's Policy Research (IWPR) released Equal Pay for Working Families: National and State Data on the Pay Gap and Its Costs. This report again propounded the fiction that women are paid only 74 cents on a man's dollar in the United States as a whole, and presented data for women's earnings in individual States. In Louisiana, women's earnings are supposedly 67 percent of men's, whereas in the District of Columbia women earn 97 percent of men's wages. In addition, the report looked at the percent of men and women working in different industries, and concluded that "America's working families lose a staggering $200 billion annually to the wage gap."
If these groups are to be believed, then American women are still second-class citizens, as they were before they had the right to vote. But before declaring another crisis, it is worth looking at how these numbers were put together and some of the reasons behind the differences.
During the nineteenth century, employers usually operated on the assumption that women in the labor force earned wages that were merely supplemental to household income. This assumption was reflected in women's average earnings, which, according to most historians, were approximately one-third of men's in 1820, rising to approximately 54 percent of men's by the end of the nineteenth century. Women's average wages continued to rise relative to men's wages during the twentieth century, reaching 74 percent of men's in 1998.
The 74 percent figure is derived by comparing the average median wage of all full-time working men and women. To obtain figures for individual states, average wages of men and women within that state are compared. So older workers are compared to younger, social workers to police officers, and, since full-time means any number of hours above 35 a week (and sometimes fewer), those working 60-hour weeks are compared with those working 35-hour weeks. These estimates fail to consider key factors in determining wages, including education, age, experience, and, perhaps most importantly, consecutive years in the workforce. That is why in States such as Louisiana, where it is less common for women to work, and where they have less education and work experience, the wage gap is wider. In...