Arndt on the wage gap

Bettina Arndt has a terrific piece in this morning's Herald Sun, in which she explains the reasons men tend to earn more than women. Given that Herald Sun articles are only availabe online for a short time, I've reproduced the article below.


Why men are paid more

October 16, 2006

EVERY few years the Australian Bureau of Statistics releases data about the gender wage gap. And every time the Labor Party announces the sky is falling in.

The fact that men earn more than women is presented as proof that the country is going backward under Howard. The white picket fence is rising up to capture us all.

Everyone who participates in this farce knows full well that these wage-gap statistics are meaningless.

So, what if the average woman in Australia earns $300 less per week than the average man.

That statistic fails to take in account the hours worked. In fact, the average Australian Joe Blow works almost twice as many hours as the average Jenny Blow, according to data HILDA, the Household Income and Labor Dynamics in Australia survey.

Since he's putting in twice as many hours, I hope Joe Blow would earn far more. Not only does he work far longer hours, he's also far more likely to take on hazardous jobs such as mining, construction, trucking, he's more likely to be willing to move overseas, or to an undesirable location on demand and has trained for more technical jobs with less people contact.

In fact, the wage gap hasn't much to do with discrimination, or conservative governments trying to keep women in their place. Differences in the way men and women behave in the workplace largely determine how much they earn.

Women are more likely to balance income with a desire for safety, fulfilment, flexibility and proximity to home. These lifestyle advantages lead to more people competing for jobs and thus lower pay.

Wage gaps tend to disappear when women put in the same hours and have the same experience, training and work history as men. In Australia, similarly trained men and women under 30 show similar earnings. It is only in the older age groups that wage gaps start to widen, according to Mark Woden at the Melbourne Institute.

Yet men and women still tend not to have the same training. A London School of Economics study of more than 10,000 British graduates found the men started off earning 12 per cent more than the women.

The reason? Most of the women had majored in the social sciences, while many men chose engineering, maths and computing.

While more than half the women said their primary interest was a socially useful job, men were twice as likely to mention salary.

SIMILAR patterns emerge here. Graduate women in Australia, who move into traditional male professions, often start off earning more than men. For instance, the average starting salary for female geologists in Australia is $60,000 compared to $52,000 for men.

When women go into potentially high-earning careers, many end up earning far less than their male colleagues because of the way they structure their working lives. Look at female doctors. To get into medicine, these women were as ambitious and hard-working as any of their male colleagues.

But a few years down the track it's a different story. Current figures show a female GP works in her paid job only 63 per cent of the hours put in by a male, although clearly many face a second shift at home.

Women are making choices. Yes, these choices are constrained by their family responsibilities. That's the reason they work those shorter hours and seek the lower paid, but more flexible work closer to home.

Australian women still choose to take time out when their children are young, then return to part-time work. They miss out on financial rewards but are more content. The latest HILDA survey clearly shows women working part-time are more satisfied than full-time working women.

The part-timers are far happier with their work-life balance and just as satisfied with their jobs as the full-timers. In fact, more than half the women working full-time want to work fewer hours while just over a third of the part-timers want to work more.

Yes, there are still glass ceilings, pockets of discrimination, but the major reason men earn more than women is the trade-offs women choose to make. So, the next time Anne Summers bleats about wage gaps, you'll know she's trying to pull the wool over your eyes. Wage gap talk is a con job.



I'll add just one brief point to Bettina Arndt's efforts. It makes little sense to oppose male earnings and female earnings. It's not as if the male wage stays with men, to be used for the purposes of men. What men earn is mostly spent on the upkeep of a family; a lot of it, in fact, will ultimately be spent by women.

So even the framework of the "male wage" debate is misconceived. The money earned by men is not really "male" income, but family income which women directly share. Women have an interest in encouraging their husbands to earn a good income, and this too helps to explain why the gender gap in wages still persists.