During last night’s Oscar ceremony, Best Supporting Actress winner Patricia Arquette used her acceptance speech to rail against unfair pay for women:
To every women who gave birth to every taxpayer and citizen of this nation, we have fought for everybody else’s equal rights. It’s our time … to have wage equality once and for all and equal rights for women in the United States of America.
The wage equality that Arquette is referring to is the gender wage gap—the difference between male and female earnings expressed as a percentage of male earnings. Because she frames the issue as a matter of equal rights, Arquette presumably believes that the problem is caused by intentional discrimination.
The gender wage gap certainly exists, but there is considerable debate about the size of the gap and whether it is caused primary by discrimination or by other factors, such as education and work hours. Much of the confusion is caused by the use of misleading statistics by politically motivated groups. For example, last night the Department of Labor (DOL) posted on their Twitter account:
FACT: Women make 78% of what their male counterparts make. Learn more: http://dol.gov/equalpay/ #Oscars
To say that the Labor Department was being intentionally dishonest would require knowing their motives. It’s much easier to assume basic incompetence. For instance, the tweet claims the gap is 78 percent. But on the “Equal Pay” page they link to the gap is claimed to be 81 percent (“women earn about 81 cents on the dollar compared to men”). Dig deeper onto the site and you’ll find other claims, such as that the gap is 77 percent. The differences may seem small, but it reveals a significant problem when a government agency can’t even agree with itself about what the real number should be.
One number you won’t find on their “Equal Pay” page is 94 percent. That was the true wage gap found in a 2009 study by the economics consulting firm CONSAD Research Corporation, prepared for the Department of Labor. In the introduction to the report the Labor Department says, “the raw wage gap continues to be used in misleading ways to advance public policy agendas without fully explaining the reasons behind the gap. The purpose of this report is to identify the reasons that explain the wage gap in order to more fully inform policymakers and the public.” That statement is rather prophetic since the DOL is now the one using “misleading ways to advance public policy agendas” related to the wage gap.
As this video by the Independent Women’s Forum explains, the causes of the gender wage gap are mostly based on individual preferences:
The gender wage gap isn’t the most pressing public policy issue even in the area of equal rights for women. But for those who are concerned about gender wage discrimination, there’s a simple solution: increased free market competition. As AEI’s Andrew Biggs and Mark Perry explain,
Some gender discrimination in the labor market certainly does exist. But the best solution isn’t more lawsuits. In fact, the Obama administration’s proposal to shift the burden of proof in gender discrimination cases against employers would make hiring a female employee a potential legal liability for employers, and thus employers would hire fewer women.
What female workers need is a vibrant and competitive workplace, since it is competition that weeds out discrimination. When one employer discriminates against women, a new employer could earn a windfall profit by hiring an all-female workforce and paying them slightly more. … Several studies have shown that as industries faced increased competition, through either deregulation or international trade, the gender pay gap shrank. And the pay gap is larger in monopoly markets without competition and smaller in start-ups and small businesses that must be productive in order to survive. Women need more markets, more enterprise, and more opportunity, not more regulation and litigation.
Maybe that’s what Arquette really meant, that women “need more markets, more enterprise, and more opportunity.” (It seems to have worked well for her.) If she had made that claim in her speech last night it would have been a positive proposal for advancing equal rights for women. And if she had spoken that truth to the Hollywood audience it would have been a performance worthy of another Oscar.