T EC SP ER P

About the Speaker

IV

E
The Myth of Women as Economic Victims

Liberal womens groups have long complained that women suffer discrimination in the workplace that leaves them

economically worse off than men. Economist Diana Furchtgott-Roth debunks this claim in a new well-sourced book, Womens

Figures: An Illustrated Guide to the Economic Progress of Women in America, which shows how well American women are doing in

the 21st Century. By many metrics, she argues, women are doing better than men.

Back in 1997, Barbara Ladeen, who was then head of the Independent Womens Forum, said that we needed a book showing the truth about the gender wage gap and the glass ceiling in order to combat all the myths that there are about women making only 75 cents of a mans dollar. At the time I said, Barbara, no one believes in the wage gap. Theres no point in putting any of this together. No one believes in the glass ceiling. She replied, yes, Diana, there are really people who believe it. Now years later in 2012, people are still talking about women making 75 cents on the dollar, or 77 cents, or sometimes 78. President Obama has said that women make 78 cents on the dollar, and he uses that as a rationale for affirmative action for womenthat is, promotion of policies that would benefit women and hurt men.

And if that Martian then was told it is the favored group that is discriminated against and it is the favored group that the President wants to give affirmative action to, the Martian would just be shocked because by many, many metrics women are doing better than men. Yet President Obama continues to push for the Paycheck Fairness Act (PFA), which would require employers to submit lists of their employees salaries, race and gender to the government to demonstrate that

Diana Furchtgott-Roth
is senior fellow at the Manhattan Institute, a contributing editor of RealClearMarkets.com, and a columnist for the Washington Examiner, MarketWatch.com and Tax Notes. From 2003 to 2005, she served as chief economist of the U.S. Department of Labor. Furchtgott-Roth, who received her B.A. in economics from Swathmore College and her M.Phil. in economics from Oxford University, authored two books in 2012 Womens Figures:The Illustrated Guide to the Economic Progress of Women in America (AEI), and Regulating to Disaster: How Green Jobs Policies are Damaging Americas Economy (Encounter Books).

Womens Progress
What is interesting about this argument is that if a Martian were to come down and see there were two groups of peoplemen and womenand one of the groups earned 58% of all Bachelors and Masters degrees, more than half of all PhD degrees, an equal number of medical degrees and legal degrees, had a longer life expectancy by about 5 years, had a lower unemployment rate, and fewer of this group were in jail and fewer were on drugs, they would say, oh, this must be the favored group of people.

differences in pay were not based on gender discrimination. Fortunately, the PFA did not pass even a Democratic-controlled Congress.

Wage Gap Affected by Choices

The whole crux of this comes down to the measurement of something called the wage gap. Its true that if you simply average wages of full-time men and full-time women and compare that number, women do make about 77 cents on the dollar. But thats averaging ALL women with ALL men, without regard for the many different individual choices women make that affect this average.

Clare Boothe Luce Policy Institute 112 Elden Street, Suite P Herndon,Virginia 20170 P (888) 891-4288 F (703) 318-8867 www.cblpi.org

Clare Boothe Luce Policy Institute

ones that demand 60 to 80 hour weeks. Yale Law female graduates want to work for firms that have flexible schedules where they can combine their family life with their work life. Unfortunately, jobs with flexible schedules often pay less than jobs with inflexible schedules. Dangerous vs. Safe JobsMens higher wages can also be a compensation for risk-taking. Those who work in dangerous jobsmining, logging, and constructionare generally paid more than someone working in the relative safety of an office. Im just not built for working 50 feet up on scaffolding in bad weather, and many women make that same choice.

Econometric Studies
So the wage gap is mythical when you account for women in comparable situations to men. Its only when you compare women in flexible jobs to men in inflexible jobs, men in dangerous jobs with women in safer jobs that different kinds of wage gaps emerge. Numerous econometric studies by economists have shown that when everything is constant, the wage gap disappears. If you look at a male and female legal associate, or a first year lawyer in the same firm, for example, they earn the same. Likewise, a first year supermarket cashiermale or femalemake about the same. June E. ONeills recent study1 for the National Council for Public Policy is the latest study to bear this out. I n t e r e s t i n g l y, the wage gap also disappears for young single women. In the young, single, collegeeducated demographic, you find that women actually make more than men.

Career PathsIn school, for example, more women major in English, gender and comparative studies, while more men major in chemistry, physics and math and computer science. This means that women and men are on different career paths in fields with different earning potential. No one can say that womens choices are wrong; they are simply their preferences as to what they want to do.

Work HoursOnce in the workforce, fulltime women work about 10 percent fewer hours than men. Full-time, you see, is anything over 35 hours a week. The Labor Department doesnt make any distinction between those working 35 hours per week and those working 50-60 hours per week. Both are considered full-time. Yet comparisons of womens fulltime and mens full-time find that women work fewer hours, which is one reason that, on average, women earn less. Flexible vs. Inflexible SchedulesWomen also tend to choose jobs with more flexible schedules, while men choose ones with inflexible schedules. One example can be found at the Yale Law Women website. Those who get into Yale Law are some of the smartest, most ambitious women in the country. What do you think are the characteristics of the top firms that female Yale Law graduates choose? According to a Yale Law Women annual survey, they choose the firms with the flexible schedules, not the

Econometric studies have shown that when everything is constant, the wage gap disappears

Affirmative Action for Women Movement

Despite the significant progress women have made in education and in the workplace, there is currently in America a strong advocacy movement for women promoting policies such as affirmative action and quotas in college admission, hiring, and federal contracting. Organizations such as the National Organization for Women (NOW) and the NOW Foundation, the American Association of University Women (AAUW) Action Fund and the AAUW Educational Foundation, the National Womens Law Center (NWLC), and Catalyst promote these policies in a purported defense of womens rights.

1 The Declining Importance of Race and Gender in the Labor Market: The Role of Federal Employment Policies, June E. ONeill and Dave M. ONeill, (Washington, DC.: AEI Press, Aug 2012). See also The Disappearing Gender Wage Gap, by June E. ONeill, National Council of Policy Analysis (http://www.ncpa.org/pub/ba766)

Clare Boothe Luce Policy Institute

These feminist organi-zations decry the gender imbalances in certain fields of study and careers. Failing to look any further than discrimination for explanations of gender disparity in the United States, they claim that gender discrimination remains a barrier to womens success in the twenty-first century. To remedy this discrimination, they conduct research, fund womens programs, and lobby Congress, the administration and government leaders to establish preferential programs. However, it is both unnecessary and unwise for lawmakers to mandate further affirmative action and gender quotas in education, the workplace, federal contracting, grant-making, and other areas of economic life. It would risk subjecting educational institutions, private sector firms, and government agencies to additional lawsuits or decreased federal funding unless they adopt a system of gender quotas. Yet quotas distort these institutions admissions, hiring, and contracting practices, thus increasing costs and lowering productivity. Quotas are unfair to men, who may be passed over for a position in favor of a less-qualified woman. They are also unfair to women because they undermine womens achievements by enforcing the belief that successful women in high positions got there through affirmative action rather than through merit and accomplishments. In the end, such affirmative action policies would slow down Americas economy, as would the Paycheck Fairness Act, since they would add to businesses employment costs and likely result in employers employing fewer people, including women.

biofuels are more costly ways of producing electricity than natural gas and other traditional forms of energy. Consider this. In California by 2020, 33% of electricity will have to be generated by green energy renewables. Thats going to make electric bills soar and hurt everyone, especially lower income Americans who spend about 22% of their total income on electric utility bills, natural gas bills, and motor fuel. CAF Standards Another anti-woman, familyunfriendly regulation that the president has just brought out is raising the CAF standard for cars to 55 miles per gallon. To reach that standard, cars will have to be made smaller and lighter. Many women with children know they need a car that holds kids plus all the stuffthe stroller and diaper bags, the hockey sticks, the football gear, the groceriesand small cars just dont do it. Worse, small cars are less safe. Youre more likely to get killed if youre in an accident in one of these smaller, lighter, thinner cars.

What Women Want

Free contraceptives, free health care, arbitrary quotas and wage policy built on myths are not what women want. Rather, they want a vibrant economy that offers a chance for themselves and their families to be economically secure and to choose employment that fits their preferences and their lifestyle choices. When it comes to a vibrant economy, government policies matter. Think about this. In North Dakota, land is mostly privately-owned, and landowners are free to invite oil companies to explore that land for natural resources. Exploration in natural gas hydro-fracturing production in that state has sparked such an economic boom that North Dakota today has an unemployment rate of only 3%, compared to a national rate hovering near 8%. Its important to begin taking downnot building upgovernment barriers to employment, whether its affirmative action and quotas, or unrealistic CAF standards and renewable energy usage demands. The future economic progress of womenand men depends on it.

Current Anti-Women Policies

Meanwhile, many policies that are decidedly antiwomen and very family-unfriendly are already in place. Health CareThe new health care law, for example, has a penalty of $2,000 per worker, for firms of 49 or more employees, if the employer doesnt offer the right kind of government-endorsed health insurance. The Obama Administration claims the health care law is great for women, but it isnt because it will mean fewer people, including women, employed. Green JobsThe President also claims its green jobs policies are good for the economy and the environment. Yet they arent good for women because few women are employed in the green jobs sector. Moreover, green job policies raise the overall cost of energy and families utility bills because solar, wind, and

This paper was adapted from remarks by Diana Furchtgott-Roth to the Conservative Womens Network in September 2012.