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7/2/15

Explaining the White House (and overall) gender pay gap — neither are primarily the result of gender discrimination

WhiteHouseTableI reported yesterday that there is a gender pay gap at the White House, based on an analysis of White House salaries for 2015. That analysis revealed that the median pay for female staffers at the White House is $65,650 compared to the median pay for men of $78,000, resulting in a 15.8% gender pay disparity. How can we explain the fact that women working at Obama’s White House earn only 84.2 cents on average for every $1 earned by men? Discrimination? Probably not. More likely explanations include factors that result in a national gender wage gap, currently at 17.9% according to the most recent BLS data — factors like age, continuous work experience, marital status and children.

The chart above might help to explain the 15.8% gender pay disparity at the White House (WH), by showing a gender breakdown for White House staff at different salary rankings: the top 25/50/75/100 highest paid employees and the bottom 25/50/75/100 lowest paid employees. Because many employees make the same salary, I sometimes had t0 include more or fewer employees to the salary categories, e.g. the top 51 and the bottom 55, etc.

Here are some facts:

1. For the bottom ranked 25, 50, 75, and 100 lowest-paid White House employees in 2015, female staffers are over-represented in each category, with more than a 55% share of each of those four categories. Looking at the 100 lowest-paid WH employees with salaries between $41,000 and $47,361, women represent 57% of that group. Given the fact that women now earn about 57% of bachelor’s degrees in the US, and assuming that most WH staffers have at least a bachelor’s degrees, it makes sense that women outnumber men at the White House for the more entry-level, lower-paid positions.

2. For the highest ranked 25, 50, 75 and 100 highest-paid employees, male staffers are over-represented in each of those four categories. Among the 51 highest paid White House staffers with salaries between $143,079 and the maximum of $173,922, male staffers outnumber females 30 to 21, and by percentage represent almost 59% of those senior employees. For the top 105 highest paid White House staffers with salaries of $120,000 and higher, men outnumber women 58 to 46, and represent a 55.2% share of that group.

MP: So here’s an economic explanation for the 15.8% gender pay disparity at the White House.

Women are far over-represented for the more entry-level, junior positions at the White House and probably for other government-related jobs in DC. But over time there are probably more women than men who voluntarily choose to forgo full-time job responsibilities in favor of greater family responsibilities, child care, and more flexible, family-friendly or part-time employment options.

Therefore, it might just be a reality that men represent a majority of the professionals in the Washington, D.C. labor market who have the necessary qualifications to be hired for the highest-paying, senior staff level positions at the White House. And what are some of those qualifications? Probably at least ten or more years of continuous work experience in government, public policy, nonprofit organizations or legal services, and the willingness and ability to work 50-60 hour weeks when necessary. So even though the White House might try to hire equal numbers of men and women for senior positions, they are likely faced with the economic reality that the number of qualified men available to be hired for senior staff positions is greater than the number of qualified women. In that case, a natural gender imbalance in favor of men emerges for the higher-paid, more senior level positions, and the White House thus has a 15.8% gender pay gap in favor of men.

In other words, almost all of the 15.8% gender pay disparity at the White House can be explained by age, continuous work experience, hours worked, marital status and number of children, the same factors that can help explain the 17.9% gender pay gap nationally. For example, the BLS data show that young women 25-34 years old earn on average 90.2% of their male counterparts, and women who have never married earn almost 96% of their male counterparts. In contrast, women who are married earn only 76.6% of what married men earn.

Bottom Line: It’s probably the case that none of the 15.8% gender pay gap at the White House is a direct result of gender discrimination. Rather, the pay gap at the Obama White House is likely the result of the voluntary choices of women, many of who marry and have children as they get older, which makes them less available for senior White House positions that require decades of uninterrupted work experience and long work hours. For example, one study of MBA graduates of the University of Chicago’s Booth School of Business found no gender difference in hours worked or incomes for recent MBA graduates. But significant pay gaps were found after longer periods of time, due to differences by gender in career interruptions and increasing differences by gender over time in the number of hours worked following graduation.

Here’s one of the key findings of that study on MBA graduates (“Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors“):

Differential changes by sex in labor market activity in the period surrounding a first birth play a key role in this process. The presence of children is associated with less accumulated job experience, more career interruptions, shorter work hours, and substantial earnings declines for female but not for male MBAs.

Although President Obama’s rhetoric would have us believe that the 17.9% gender pay gap reported by the BLS is entirely the result of gender discrimination, which can only be corrected by legislation and executive orders, the similar 15.8% pay gap at his own White House suggests that factors besides gender discrimination can explain most gender pay disparities – like motherhood and marriage, and other voluntary family choices. A salary analysis of most organizations like Target, Costco, Ford, and Google would likely find a gender pay gap similar to the one at the Obama White House. And those gender pay gaps could likely be mostly, if not completely, explained by the same factors that explain Obama’s 15.8% gender pay disparity at the White House.

If President Obama applies the bogus statistical deception he uses to make statements like “Women are paid 77 cents on the dollar for doing the same work as men” — by comparing unadjusted aggregate income differences by gender — then he now has to admit that he is guilty of gender discrimination for paying his female staffers “84 cents on the dollar for doing the same work as male staffers.” But if he defends the 15.8% gender pay gap at the White House as a natural outcome of voluntary choices and not the result of discrimination, they he should stop with the pay gap rhetoric, stop the lecturing, stop the executive orders, stop the legislation and stop the presidential proclamations every year in April about National Equal Pay Day.



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