## EARNINGS DIFFERENCES BETWEEN WOMEN AND MEN

#### December 1993

#### Figure 1

What is the earnings gap?  When we talk of comparing women's
earnings with men's earnings, we find that no matter how we measure them,
women's earnings are below those received by men.  Very often men's earnings are
used as the "yardstick" to measure women's, and we say women's
earnings are a percentage of men's.  The earnings gap is the difference between
this percentage ratio and 100 percent.

How large are the earnings differences?  In 1992 for those receiving
hourly rates, women's median hourly earnings were 79.4 percent of men's;
for full-time wage and salary workers, women's median weekly earnings
were 75.4 percent of men's; and median annual earnings for women were
70.6 percent of men's annual earnings in 1992, the most recent year for which
data are available.  Of course, the earnings gap for hourly
earnings is 20.6 percent; for weekly earnings, 24.6 percent; and for
annual earnings, 29.4 percent.  All three measures are developed from
Current Population Survey (household survey) data and released by the Bureau of
Labor Statistics (BLS) and the Bureau of the Census.

Why the difference among measures?  We find the three measures which
compare women's earnings with men's earnings differ  for several reasons. 
Median weekly earnings and median annual earnings relate to full-time wage and
salary workers while hourly earnings are reported for wage and salary workers
who are paid an hourly wage, without regard to whether or not they are full-time
or year-round wage and salary workers.  About 60 percent of all wage and salary
workers are hourly workers; almost 55 percent of all employed American workers
are paid hourly wages; and 50 percent of all employees paid hourly wages are
women.

When considering the earnings of full-time year-round women and men, it
should be noted that women are employed fewer hours in the week and fewer weeks
in the year than their male counterparts.  Less time on the job contributes to
the earnings difference when women's weekly and annual earnings are compared
with men's.

Are we closing the earnings gap?

Figure 1 provides perspective on annual earnings adjusted for inflation for
women and men working full-time year-round from 1951 through 1992.  A gradual
closing of the wage gap between women and men since 1973 is apparent in Figure
1.  Full-time year-round workers have different characteristics from other
workers.

Estimates of median annual earnings in constant dollars, with 1982-1984 used
as the base years, were constructed using the BLS CPI-U to adjust for inflation.
 Figure 1 outlines the relatively steady climb in women's real earnings while
men's earnings peaked in 1973 and have drifted downward since.  Recessionary
dips appear in both women's and men's earnings in the early 1980's, while the
recessionary period in 1990-1991 shows an increase in men's earnings compared
with women's earnings.  This unexpected change occurred because more low-wage
earning men lost their jobs in the recession, leaving a larger proportion of men
with higher earnings in the work force.  With fewer low-wage earners, the
estimate of earnings for men rose as employment of men declined.  Women did not
experience similar employment losses, and their annual earnings held steady
during the recessionary period.

When we look at the 41-year period as a whole, women's earnings have
increased by 1.3 percent each year while men's earnings have grown by only 1.1
percent.

Though annual earnings for women and men have been available from the CPS
since 1951, hourly and weekly wages by gender have been calculated only since
1979.  Table 1 presents the percentage ratios of women's earnings to men's
earnings for median hourly and weekly earnings along with median annual earnings
for comparison.  The hourly and weekly ratios were prepared by BLS, and the
annual ratios, by Census.



`Table 1.  Women's earnings as a percent of men's, 1979-1992

     Year           Hourly         Weekly         Annual

     1979            64.1           62.5           59.7
     1980            64.8           64.4           60.2
     1981            65.1           64.6           59.2
     1982            67.3           65.4           61.7
     1983            69.4           66.7           63.6
     1984            69.8           67.8           63.7
     1985            70.0           68.2           64.6
     1986            70.2           69.2           64.3
     1987            72.1           70.0           65.2
     1988            73.8           70.2           66.0
     1989            75.4           70.1           68.7
     1990            76.8           71.8           71.6
     1991            77.5           74.0           69.9
     1992            79.4           75.4           70.6`

Figures 2 through 4 present data in constant dollars,  adjusted for
inflation for full-time wage and salary workers, by age and race/gender groups
from 1979-1992.  The graphs show a steady downward trend with a closing together
of real earnings for all race/gender groups 16-24 years old.  In this age group,
white women's earnings exceeded black men's earnings in 1982 and continued at
higher levels through 1992.  For those 25-54 years old, white and black men's
earnings have gradually moved down while white women's earnings have gradually
risen, exceeding black men's earnings in 1991.  Black women's earnings have 
remained relatively stable.  Historically, black men had earnings higher than
white women, but for workers under 55 their positions were reversed in the
decade of the 80's.  For those 55 or older, there has been little change in the
relative positions of the various race/gender groups in the 13-year period. 
Itappears that older workers, in general, have not experienced the downward
pressure on earnings that younger workers have.

In the face of gains made by women in many areas, why is change in the
earnings ratio so slow?  Researchers have suggested that the wages of all
working women did not increase relative to those of working men
between 1920 and 1980 because the skill (as measured by education and
experience) of working women did not increase relative to working men over this
period (Smith and Ward 1983).1

The authors prepared estimates for the time period 1920 through 1980 of the
amount all women would earn, based on their education and work experience,
without regard to whether or not they were actually in the labor force.  These
estimates were then used to compare the estimated wages of the whole
population of women with the whole population of men. The
researchers pointed out that the average wages of the entire population of
women, have increased much more rapidly than the entire population of men over
the 60 years.  The researchers estimated that "women's wages grew 20
percent faster than men's wages" as women's work experience increased.
 Smith and Ward concluded that the rise in
women's real wages between 1950 and 1980 accounted for almost 60 percent in the
growth of women's labor force during the period.  Incentives to work are higher
when wages are high; higher wages also tend to discourage larger families so
that women have more time for paid work.

Much of the discussion on earnings in the 1980's focused on the widening
differences in earnings; this disparity occurred among both women and men.  But
because women's hourly earnings grew faster than men's and because their annual
average hours of work increased, while men's hours of work did not, a larger
segment of all working women had annual earnings of $20,000 or more at the end
of the decade than at the beginning even when measured in constant dollars (Levi
and Murnane, 1992). 2

When viewing the earnings of women compared with the earnings of men between
1980 and 1991, structural changes occurred which caused women's earnings to rise
steeply. Sorensen conducted research into the differences in earnings ratios
during the 1980's between women and men and between black and white workers.3  She identified two divergent trends. "Women made tremendous
gains in their wages relative to those of men" while "The pay
disparity between blacks and whites increased for both women and men."  Her
research suggested that the human capital characteristics of women (education
and work experience) compared to men of the same race increased over the decade.
 Increases in work experience was more important in raising women's earnings
than changes in education, however.  The occupational distribution of women and
men also tended to converge.  The wider gap in earnings between black and white
men was related to changes in industrial attachment and a change in the wage
structure during the 1980's which increased the returns to education for white
men.

Another researcher (Bamezai 1989) in discussing structural change in the
1980's suggested that the widening disparity resulted from both demand and
supply changes in the economy. 4 He indicated that technological
change required increasing skills in the U.S. job market with education and
vocational training becoming more important.  "The recent experience of
technological change has been qualitatively different from the historical
experience because of the central role played by microprocessor-based
information technologies within and across industries."  He suggests that "The
most important change in the structure of wages has been the dramatic rise in
the price of skill (that is, schooling and work experience) between 1973 and
1988...growth in the demand for highly skilled labor has outstripped growth in
its supply resulting in an increase in the wage rate of skilled workers;
meanwhile, the demand for relatively unskilled labor has fallen relative to its
supply, resulting in a decrease in the wage rate of relatively unskilled
workers."

When looking for explanations of falling wages for lower skilled workers,
changes in the characteristics in the work force brought about by immigration in
the last 20 years become significant.  Levi and Murnane (see footnote 2)
referred to the 1990 study by Borjas, Freeman and Katz when they pointed out
that "Patterns of immigration also contribute to a supply related
explanation for the increase in the earnings (associated with
education)...because immigrants have less formal education, on average, than do
native born Americans. For example, as of 1980, 46.5 percent...of immigrants in
the U.S had less than a high school education, compared to 30 percent of native
born Americans."

The 1989 Statistical Yearbook of the U.S. Immigration and Naturalization
Service data used by Meisenheimer in 1992 reports increases of more than 10
million immigrants who were granted permanent legal residence in the U.S. during
the decades of the 1970's and 1980's.5  Meisenheimer also indicates
that nearly one-fourth of immigrants age 25-64 had completed fewer than nine
years of school compared with only 3 percent of native born women and 4 percent
of native born men.  As further evidence of the impact of immigration, the
Census Bureau reported that "Nearly one-fourth of the United States' nearly
20 million foreign-born residents entered the country between 1985 and 1990
according to tabulations from the 1990 Census."6

Meisenheimer (see footnote 5) points out that "Among employed men,
immigrants who moved to this country during the 1982-1989 period were much more
likely than natives to work in occupations that are generally low paying...19
percent of immigrants versus 9 percent of U.S. natives worked in service
occupations which included such jobs as food preparation, child care, and
janitorial services."  Thus, at the lower end of the skill spectrum,
significant numbers of poorly educated recent immigrants may be competing with
native born black workers and other minorities for jobs.

Which occupations have shown strong growth in women's earnings relative
to men's?The earnings ratio data are not uniform among all occupations. 
In some occupations women receive approximately equal, or even greater,
compensation than their male coworkers in the same occupation.  Occupations with
higher earning for women than men are both nontraditional (mechanics/repairers)
and traditional (nurses) occupations for women.  Table 2 presents women's median
weekly earnings as a proportion of men's for selected occupational groups. The
groups included in this table are those in which national totals for women's
earnings were at least 90 percent of men's earnings in 1992. Ratios are also
presented for 1983 to show the recent trend in relative earnings for women and
men. Table 2 also presents the proportion of women's employment to total
employment for each occupation.  In this context, individual occupations which
seem to fare well when women's earnings are compared with men's are not located
in only "women's" work (those occupations which have high proportions
of women's employment to total employment) or "men's" jobs (those with
high proportions of employed men).  Instead, these occupations appear to occur
throughout the whole spectrum of jobs.

`Table 2.  Ratio of median weekly earnings for full-time women to
        men and ratio of women's employment to total employment, 
                   selected occupations, 1992 and 1983

                           Women's earnings   Women as a percent
                             as a percent     of total employment
Occupation                  1992    1983        1992    1983

Total                       75.4    66.7        43.1    40.4

Registered nurses          104.7    99.5        93.5    94.4     
Pharmacists                 90.1    NA          42.7    27.8
Therapists                  95.8    NA          76.0    75.1     
Teachers, secondary schools 90.3    88.6        53.9    49.1     
Cashiers                    94.8    84.3        75.7    80.9     
                                      

Scheduling 
  supervisor/clerks         92.9    NA          30.7    20.1
Secretaries, stenographers,
  and typists               91.6    76.7        98.5    98.5
Records processing, 
  except financial          90.4    76.2        79.7    82.0
Postal clerks, 
  except mail carriers      94.6    93.4        42.9    32.2
Mail carriers, 
  postal service            97.0    NA          25.2    14.3


Mail clerks, 
  except postal service     93.2    89.0        48.5    48.9
Data-entry keyers           95.0    NA          86.6    93.5
Guards/police, 
except public service       94.2    91.2        14.8    11.1
Waiters and
  waitresses assistants     97.2    NA          38.3    36.9
Miscellaneous 
  food occupations         105.6   102.5        39.9    48.8


Nurses aids, orderlies,
  and attendants            96.0    81.0        87.9    86.8
Mechanics/repairers        105.4    89.4         3.3     3.4
Textile sewing machine 
  operators                 91.9    NA          87.2    94.0
Packaging/filling 
  machine operators         90.0    78.5        61.5    64.2
Stock handlers, baggers     97.4    91.9        24.5    19.0
Hand packers/packagers      94.6    91.6        63.3    66.4

NA = Not available.  Earnings data are not developed for
occupations with fewer than 50,000 employees.`

---



Historically, women have "crowded" into a few occupations.  In
1992 the six most prevalent occupations for women were, in order of magnitude,
secretaries, school teachers (excluding those teaching in colleges and
universities and those teaching in preschool and kindergarten), cashiers,
managers and administrators, registered nurses, and bookkeepers and accounting
clerks.  In 1992 more than one-third of all full-time women workers were
employed in these occupations.  It has been argued that women choose these
occupations because there tends to be less skill obsolescence for workers who
leave and reenter the labor force.  It has also been argued that the educational
commitment for employment in these fields is less than in some others, and
workers can have more time at home for other responsibilities.

There may be other factors which are difficult to measure that also affect
women's career decisions.  To what extent have women been denied the opportunity
to find  employment in other occupations?  Have they been fearful of entering
occupations where few women are employed because of lack of knowledge about the
field, or fear that sexual harassment may be a factor?  These are aspects which
are difficult to quantify.  However, Gupta reported that "(research)
results indicate that sex differences in occupations are due both to differences
in preferences and to differences in employer selection." 7

It should be remembered that occupational segregation has been diminishing;
there are far fewer "women's" jobs and fewer "men's" jobs
than in earlier periods.

What other factors besides occupation affect the earnings gap?  It
has been suggested also, that seniority within the firm  and in the job has much
to do with  earnings of American workers.  If this is the case, then the work
experience of the two groups will    have an impact on the earnings ratio of
women to men.   In 1990 Topel stated that his "estimates imply a very
strong connection between job seniority and wages in the typical employment
relationship: other things held constant, 10 years of job seniority raises the
wage of the typical worker by over 25 percent."8

Data from the Survey of Income and Program Participation (SIPP) showed that
for all men, only 1.6 percent of all  potential work-years were spent away from
work while for women workers, 14.7 percent of all potential work-years were
spent away from paid work.9 Thus, women spend significantly more
time away from work and are apparently unable to build the seniority that men
achieve.

However, there has been a significant change in women's  labor force
participation since World War II, particularly for women between the ages of 25
and 54.  Most women work today, including mothers of small children.  As
recently as 1975 BLS found sharp differences in participation rates among women
classified by marital status and the presence and age of children.  This greater
participation is reflected in an increase in women's earnings as a proportion of
men's earnings, particularly for younger women. 10 The SIPP
provides data for women and men with no work interruptions (defined as 6 months
or more without a job or business) by age and educational attainment.  For young
women, those 21 through 29 in 1984, the earnings ratio of women to men was 80
percent or more, no matter how many years of school had been completed. 
However, for young women who have completed 4 years or more of college, hourly
earnings are 86 percent of the hourly earnings of their male coworkers. The
relationship between education and earnings, particularly for young women,
deserves further attention.

A new BLS series which provides 1992 data on the average weekly earnings of
full-time wage and salary workers by the level of education received for
different gender and race groups is presented in Figure 5.  It is apparent from
the graph that as education increases, earnings also rise dramatically, at least
through the doctoral degree.

Turnover data for women and men have shown higher rates for women than for
men.  The recent change in women's labor force participation tends to narrow the
differences in turnover rates between women and men with a concurrent increase
in women's earnings. It was pointed out earlier that length of time on  the job,
and the resulting seniority, increases earnings; fewer turnovers tend to
lengthen the duration on the job.  Additionally, the growing tendency of
employers to provide child care benefits, flexitime, and family leave policies
can further strengthen women's opportunity to meet family responsibilities with
fewer work interruptions.

What about sex discrimination?  Sex discrimination still exists in
the American workplace, but the magnitude of its effect on the earnings gap is
hard to measure. Statistical studies have successfully attempted to measure the
effects on the male-female earnings differential of several factors.  Employee
characteristics, such as occupation, education, and experience, have been
examined using statistical techniques to assess the impact each has on women's
and men's earnings.  Most often the effects of discrimination in these studies
are included in an "all other" category and are not measured
separately.  However, individuals and Federal agencies responsible for
enforcement of civil rights legislation continue to win cases in which women
have been discriminated against in the workplace, thus demonstrating that sex
discrimination persists.  As an example, in 1992 sex discrimination was proved
in one of the largest of these cases ever settled. 11

What can we conclude? It appears that women's earnings are slowly
climbing when compared with men's earnings, as women's participation in the
labor force continues to move closer and closer to the pattern shown by men, and
as their educational investment and occupational choices also become more
similar to men's.  Employers' continuing efforts to provide more training and
promotion opportunities for women will help to diminish the difference between
women's and men's earnings.  Employers also appear to recognize the need to help
families balance conflicting needs.  The earnings gap should continue to narrow
as women work more hours in the week, spend more years at paid work in their
lifetimes, continue to increase their educational investment, widen their
occupational choices, and equal opportunity becomes a reality.

---

FOOTNOTES:

1James P. Smith and Michael P. Ward, "Women's Wages and
Work in the Twentienth Century," RAND Corporation, October 1984.

2Frank Levi and Richard J. Murnane, "U.S. Earnings Levels
and Earnings Inequality:  A Review of Recent Trends and Proposed Explanations,"
 Journal of Economic Literature, Vol. XXX (September 1992), pp. 1333-1381.

3Elaine Sorensen, "Gender and Racial Pay Gaps in the
1980's:  Accounting for Different Trends," Urban Institute, Washington, 
D.C., 1991.

4Anil Bamezai, "Rising Earnings Disparity and Technological
Change," RAND Corporation, 1989 dissertation.

5Joseph R. Meisenheimer II, "How do immigrants fare in the
U.S. labor market?," Monthly Labor Review, December 1992.

6U.S. Department of Commerce, Economics and Statistics
Administration, Bureau of the Census, "Monthly News from the U.S. Bureau of
the Census, Census and You," Vol. 28, No. 2., February 1993.

7Nabanita Datta Gupta, "Probabilities of Job Choice and
Employer Selection and Male-Female Occupational Differences," American
Economic Review, Vol. 83, No. 2, May 1993.

8Robert Topel, "Specific Captial, Mobility and Wages: 
Wages Rise with Job Seniority," Working Paper No. 3294, National bureau of
Economic Research, Inc., 1990.

9U.S. Bureau of the Census, Current Population Reports, Series
P-70, No. 10, Male-Female Differences in Work Experience, Occupation, and
Earnings:  1984, U.S. Government Printing Office, Washington, D.C., 1987.

10Susan E. Shank, "Women and the Labor Market:  The Link
Grows Stronger," Monthly Labor Review, March 1988, pp. 3-8.

11Kraszewski v. State Farm, DC No Calif. No. C79-1261TEH, April
28, 1992.

**NOTE:  For a copy of this fact sheet complete with corrected 
Figures 1-5, contact Ms. Arline Easley on (202) 219-6601 extension 136 or send a
self-addressed mailing label to the U.S. Department of Labor, Women's Bureau,
200 Constitution Avenue, N.W., Room S-3311, Washington, D.C. 20210.**

Footnotes and Further Reading

Return to DOL HomeDOL Home Page
Return to Agency Home Page Women's
Bureau Home Page Return to top of document Top of
Document