Today, Explained - What's my wage again?

Episode Date: April 10, 2018

Today is Equal Pay Day. Vox’s Sarah Kliff reveals the real reason why working women earn about 82% as much as men. Then Valerie Wilson of the Economic Policy Institute explains why things get a lot more complicated when race comes into play. Learn more about your ad choices. Visit podcastchoices.com/adchoices

My husband was telling me, he's like, I really like the ads on Today Explained. Thank you. He said the toothbrush ones have been his favorite. So I was like, well, I'm more of a mattress firm partisan, but he likes Quip ads. Does he want to be in some toothbrush ads? Probably. Yeah? I think he'd be in a toothbrush ad.

Tell me his phone number. I'll call him and we'll do toothbrush ads. Gotta keep him fresh. Fresh like your mouth after brushing with Quip. Exactly. That's an ad. Get Quip.com with Quip. Exactly. That's an ad. Get Quip.com slash explained. Recording an ad.

I work in financial services. And as sometimes happens, we were all out at a happy hour. And one of the men on my team that I was supervising sort of let slip what he was making in base pay each year. And I remember just sort of stopping and kind of rewinding and like, what? He was making almost $20,000 more per year than I was. I remember just being completely floored. He wasn't more experienced. He wasn't older. There wasn't any good reason, you know, especially considering that I was managing him and training him kind of in my footsteps. And I ended up going to the director of our department and I'll never forget. He looked

at me and he said, unfortunately, that's just what the market demands that we pay you. If you can prove to me that the market would demand we pay you more, go for it. I remember having this glass shattering moment, realizing that the company had no interest in paying me what I was worth and that they were going to do whatever they could to pay me the least amount that they could for as long as they could. That was a Today Explained listener who shared her story with us. And we asked for listener stories because today is equal payday. It is. It is the day that women would have to work to to earn as much as men earned in 2017. It changes every year. Which is to say that this year

women would have had to work from January 2017 straight through today, April 10th, 2018, to earn as much as men did in 2017. Yes. Which is to say things aren't getting that much better too quickly. It's to say the gender wage gap is alive and well. And it's not just sexism behind it. Turns out there's a super specific reason we have a gender wage gap. Sarah Cliff, host of the Impact podcast here at Vox.

How bad is the wage gap? Right now, women earn about 82% of what men earn. Why is it so alive and why is it so well in 2018? This is an answer that changes over time. You know, if we had been doing this interview, if podcasts existed in like the 1970s or so, we would have said that, well, women aren't in the labor force as much. And when they are, they don't have as good of an education. They don't get graduate degrees. But a lot of those factors have actually faded away. Women get more graduate degrees than men at this point. Women's labor force participation has risen hugely over the past few decades.

The one thing that has not changed is this expectation that when couples have children, it is the women who are going to step back and take care of them. And that expectation really seems to be at the heart of the wage gap that exists in 2018. Really? It's all about having children, maternity leave? Yeah, there's one statistic I found that just really blew me away and drove this home. Women who don't have children, they earn on average 96% of what men make. Almost closes the gap. Almost closes the gap. Almost closes the gap. Damn.

If you don't have kids, your earnings look a lot like your male counterparts. And that suggests a lot of what's going on with the wage gap is really a motherhood penalty. Is the larger problem that someone's got to care for the kids and workplaces aren't that flexible? Is that the problem? I think that's certainly a chunk of what's going on, is that one of the things I think is really revealing about the gender wage gap is that it changes over the time of a career. I actually want to tell you about this University of Chicago study that helped me understand it.

Please. So there were about 10,000 people who graduated with business degrees from the graduate school at University of Chicago between 1990 and 2006. Okay. In 2009, three economists decide to study a quarter of those people. And they find that when people graduated, there was a wage gap, but it was pretty tiny. That women earned $115,000 right out of graduate school. Men earned $130,000. Nine years out of graduate school, women are earning an average of $250,000, while men are averaging out at $400,000.

Wow. So men are earning 60% more than women nine years out. So that initial gap was like that pure, we just pay men more gap, and then it gets exponentially worse because women have taken time to have kids. Yeah. So that first gap, you know, might be paying men more. Maybe, you know, you have some people who are looking down the future and thinking, I want a certain kind of job that's going to be more flexible. OK. But something happens in that nine year time period. And if you think of like the life events that happen between finishing a graduate degree and a decade later, one of those big life events is kids. And you just see in study after

study, the wage gap gets really, really big as women hit their 30s and 40s. Sounds a lot like where you're at, Sarah. Have you experienced this at all, like firsthand? So people who are listening to this cannot see that I'm about eight months pregnant at this point. So I've been thinking about this a lot. I've seen in the research and like seen in my own life that one of the things that happens when you get pregnant is people make certain assumptions about what you might want. People assume you might not want to travel as much or that you're going to want to scale back your responsibilities once you have this child. And there really isn't that kind of assumption that gets placed on men. Some of it probably isn't conscious.

Some of it's just like, oh, well, Sarah looks pretty uncomfortable sitting at her desk at this point. Maybe she doesn't want to get on a five-hour plane flight is well-meaning in a way. Yeah. But it also kind of holds women back, you know, by not asking, you know, if I do want to get on that five-hour plane flight. Do you want to get on that five-hour plane flight?

Not anymore at this point. Good to know. I just wanted to ask. A few months ago, yes. When a father takes time off for childcare, do we see it affecting his earnings? We do. And this is like one of the most fascinating,

I think horrific parts of the wage gap literature is men actually get penalized more than women for taking significant time off. That's refreshing. So I guess it's like it is a little refreshing, but it's also disturbing to me because it is a totally rational decision. If you're like a couple having a baby, you know, who are looking at all this research, you might say, well, you know, the world being what it is, it makes more sense for the woman to take the time off because she's going to get penalized less than if the man takes the time off. So it's kind of like a bummer. The wage gap research suggests they actually face a steeper economic penalty for taking that time off. So if the United States or, you know,

employers in the United States help pay for more child care So if the United States or, you know, employers in the United States help pay for more child care, would the gender wage gap sort of disappear or go back to the smaller gap that you said would happen just after college or something like that? Not necessarily. And I think, you know, the Scandinavian countries are actually really instructive to look at here because they do have heavily subsidized daycare. There was this recent study that came out of Denmark's wage gap. It is startling to me how much the charts of Denmark's wage gap look like what you'd find in the United States, where a woman has a baby and her earnings just totally crater. And one of the things that's really interesting when you dig into, well, why

is that happening? They have subsidized child care. Is that in Denmark, they have very generous maternity leave or actually very generous parental leave. Men have the option to take it. But again, there's like that cultural norm that women are going to take the entirety of this really generous leave. I think it's a full year of leave after you have a baby. So what would help then? Are there any policies in other countries that actually work? So in Iceland, for example, there any policies in other countries that actually work? So in Iceland, for example, there's three months of leave that can only be used by the dad, three months of leave that can only be used by the mom, and the rest can be split up between the couple.

So you kind of have this three months of use it or lose it paternity leave in Iceland. The rates of men taking paternity leave skyrocket in Iceland. All of a sudden, when it was like, well, I could get three months paid for free or just lose it and go to work. I was like, yeah, that seems like a pretty decent deal. I'll stay home and take care of my kids for those three months. So, I mean, in the United States, that feels like it'd be kind of radical to say like, man, you're taking three months now. But is it like just something that we need to have a cultural awakening on? I mean, it'd be radical to say, hey, women, you get three months of paid leave at this point.

You know, there's some fascinating international research that shows, you know, whether you're in the US, in Denmark, in the UK, the vast majority of people who live in these developed countries do not think that women should work full-time when they have kids who are not yet school-aged. In all those countries I just listed,

it's less than 20% of the people who live there agree with the statement, you know, women should work full time. You look at should men work full time and like the number skyrockets up to a big majority. So I don't think our cultural norms are quite there yet. How do we convince like male father people that they can take time to take care of their children? You know, I'm about to have a baby. I'm going to take three months of leave and be back here at Vox. So there's been a huge shift on the part of women into the workforce. And I think a lot of that is by modeling that, you know, I see all my friends are doing this, like I see other people doing this, and that becomes more normal. I think the same shift hasn't happened for men.

Men have kept working, but there hasn't been that addition of the caregiving. And like you need some kind of ad campaign almost showing men in caregiving roles. And we just don't see that a lot. If like a man is going to look around and look at his friends at the moment he's having kids, he probably sees a lot of guys who go back to work very quickly. You need some kind of like PSA or something like, hey, this is like a normal thing to do to take time to take care of your children. We should make the PSA. We're going to make a PSA? Well, let's do it. Hell yeah, we'll make a PSA. To all you men out there, what would you say in this PSA? Well, my PSA, stay. Hello, men of America. This is Sarah Cliff with a public service announcement on Equal Pay Day 2018.

If you think it's wrong that women get paid less than men, there is a huge role for you to play. If you are going to be a more active caregiver, if you're going to tell your work, I'm having a baby and I want to take a certain amount of time off, that is the contribution you can make to help enclose the gender wage gap.

Don't be afraid if you are someone who wants to take time off to push for that, even if it goes against the norms of your workplace culture. Tell your friends,

show up with your baby when you hang out with your friends to show them that it's a normal thing for men to take care of babies as well perfect and i'm just picturing the the more you know star riding that rainbow yeah over like a baby sitting at like a bar in brooklyn or something perfect yeah is that where this is one of those things you carry your baby in like on your front the

bjorn so you got your baby bjorn and like beer and your brat. And you're just like dad and hard. By the way, this whole gender wage gap thing is way worse when you factor in race. That's next. Please leave your message for... Hey, Sarah Cliff's husband, Daniel. Sarah told me you were a big fan of our ads, and I was calling because I thought this might be a good time to get you on one of them. I was apparently wrong.

But, you know, the ad probably would have been for a Quip electric toothbrush. I would have told you they're great. They start at $25. Your first toothbrush comes with a set of free refill brush heads. And I would have told you you can learn more at getquip.com slash explained. We probably would have had some fun talking about Sarah being on the show with you today. And we probably would have left it there. Maybe you can call me back.

If not, thanks for listening. And getquip.com slash explained. This is Today Explained. I'm Sean Ramos-Ferrum. I'm Valerie Wilson. I direct the program on race, ethnicity, and the economy at the Economic Policy Institute. And we've been talking on today's show a lot about the wage gap between men and women in general, but how does that conversation change when you factor in race? Well, when you factor in race, that gender gap expands tremendously. Today, we are acknowledging that this is Equal Pay Day. This is the day when, on average, women will catch up with what men earned in the previous year.

Okay. For African-American women, that date will come on August 7th. For Hispanic women, that date will come November 1st. Holy smokes. So race adds an entirely different dimension to gender pay disparities. Can you give me some specific numbers here so we can sort of paint a picture? Like what are African-American women making on average? What are white women making on average? Latin American women? So if we consider median wages, so median is the person right in the

middle. Half will make less, half will make more. For white women, the median hourly wage is $18.26. For African-American women, it's $14.61. And for Hispanic women, it's $13.50. And if we're going to then compare that to men, for white men, their median hourly wage is $22.50. And, you know, when we're talking about the gender wage gap, you factor in maternity leave and it makes things much worse. But otherwise, it kind of looked like wages are reasonably close. How has it changed over time when you factor in race? Is it getting worse, better, staying about the same? So that's interesting because most of the wage disadvantage that women of color experience is a gender pay disparity. So when the gender pay gap narrowed

during the 1980s and about midway through the 90s, all women experienced that improvement in pay. But when that gender wage gap sort of flattened out and we started to see less positive progress, for African-American women, the gap expanded. And why is it expanding? For African-American women, the expansion of the gap is sort of interesting because we see that educational attainment is increasing. It's increasing for all workers. The gap that's growing between Black women and white women is largely because the rate of educational attainment for white women is growing faster than it is for black women. So both groups are increasing education. It's just not increasing as quickly for African-American women. We have to factor in the

impact of the wealth gap, the racial wealth gap, and the fact that it costs a lot of money to go to college and to get more education. That sort of slows the rate at which you're able to increase attainment. Do we assume that racism plays a role here too? I absolutely assume that racism plays a role. And I say that, and I'm so confident, I say that in such a strong way because, you know, we did a study a couple years ago where we looked at the trends in the racial wage gap. And we cut the data almost any way you can think of trying to find some slice of the population where you get more parity or equality. It's not there. If we look within the same level of education, there's a pay gap. If we look in the same region

of the country, there's a pay gap. If we consider how distribution across occupations has changed over time, that doesn't explain the widening of the pay gap. So there's really little left to explain the fact that there is a disparity by gender and by race other than racism and sexism and the role that those play in how people get paid, whether or not they get hired, whether or not they get promoted. And do you see that gap decreasing in size out of curiosity, the one that you can't explain through factors like education or work experience? No, in fact, that gap has widened. No.

So, yeah, that— What? When we look at this trend in the expansion of the racial wage gap, more of that gap is unexplained, leaving that sort of gaping hole and big question mark of, is this something else we just haven't measured, or is it really race? That's not what I wanted to hear, Valerie. Me either. What are we doing about that? I think that there was some progress under the Obama administration to try to make some progress in addressing it in terms of greater pay transparency and requiring companies with 100 employees or more to report pay data by race, ethnicity, gender, and by job.

But the current administration has decided not to move forward with that. What could you possibly object to about greater transparency and labor statistics? Your guess is as good as mine. But what it does say to me is that pay equity, gender pay equity, racial pay equity is not a priority for this administration because that was a simple thing to do. I wonder, you know, we asked Sarah Cliff, the reporter we spoke to in the first half about her own personal experiences with this. Have you personally experienced the wage gap? Do you have a story you could share?

So that's an interesting question because I will say that my answer is probably what you're going to get from most women. I don't know. And I think that that's a problem with why we have a gender pay gap. For the most part, we don't know what other people who work with us or who work in our profession doing similar types of work, we don't know what other people are making. But, you know, there are a number of websites out there, Glassdoor and others, where you can search on job titles and I think even companies. I mean, the best you can do as an individual is be informed.

Being informed isn't just pie in the sky. That Today Explained listener we heard from at the top of the show? I'll never forget. He looked at me and he said, unfortunately, that's just what the market demands that we pay you. If you can prove to me that the market would demand

we pay you more, go for it. This is how her wage gap story ends. It's kind of awful that I had to do this, but I ended up interviewing around, searching the internet and job boards for comparable job opportunities. And then actually going through that full interview process until I had an offer in hand from another firm.

When I had a few legitimate offers to present, I made a meeting with my director and to the company's credit, they matched the best offer. But it sucks that I had to go through that process in the first place. Being a woman in finance is already kind of hard, but on top, you have this pay gap to be addressed. To this day, I'm continuously interviewing elsewhere and being honest about that with my colleagues. Maybe one day, none of us will have to waste our time interviewing for jobs that we don't want to get paid fairly. Thanks to all the Today Explained listeners who shared their stories with us. And thanks to Lauren

Katz and Julie Bogan at Vox for helping us reach out. Today Explained is produced in association with Stitcher, and we're part of the Vox Media Podcast Network. Our executive producer is Irene Noguchi. Noam Hassenfeld and Luke Vander Ploeg produce. Bridget McCarthy is our editor. Afim Shapiro is our engineer. And the unbeatable Breakmaster Cylinder makes music for us. You can do Today Explained a solid and rate and review us on Apple podcasts.

Thanks. Hello. Hey, is this Daniel? That's the Daniel. Hey Daniel, it's Sean Romsfer. I'm calling from Today Explained. Hey, Sean, how are you doing? I tried calling you a second ago, but I don't know.

It went straight to voicemail. My phone was dead, Sean. I'm so sorry. Oh, man. You know what's cool about Quip electric toothbrushes, Daniel? I don't, but please tell me. When the batteries in your Quip electric toothbrush die

you can just replace them with triple A batteries you don't have to like plug it into a wall or something that's pretty damn cool and you can get one at getquip.com slash explained I'm gonna go onto my computer and I might just do that right now

that's amazing hey I'm so glad this worked out and I got a hold of you yeah me too I'm going to go onto my computer and I might just do that right now. That's amazing. Hey, I'm so glad this worked out and I got a hold of you. Yeah, me too. I'm really glad to talk to you and learn about the Quip toothbrush. It's fantastic. We just recorded an ad. It's done. That was it. Awesome.

Awesome. Glad to help.