To recycle or not to recycle? That is the question posed by PERC senior fellow Daniel Benjamin in the new video above from Learn Liberty. As Professor Benjamin explains, making an unused tissue out of a used one wastes resources and hardly benefits the environment. Melting and casting aluminum cans, though, both saves resources and benefits the environment. But you don’t need to exhort the aluminum company to save those resources: saving scraps is in its own interest. So why does it take a lesson from your third-grade teacher to get you to recycle household waste?
In January 2009, the CONSAD Research Corporation prepared a report for the US Department of Labor – “An Analysis of the Reasons for the Disparity in Wages Between Men and Women.” Although the detailed report on wage disparities was prepared under contract for the Department of Labor, it no longer appears on any government website, possibly because the results didn’t fit Team Obama’s “77-cents-on-the-dollar” politically-motivated and false narrative on the gender wage gap that assumes continuing and widespread gender discrimination in the labor market – to be addressed and corrected only by government action and executive orders? Here is a summary of the main findings of the CONSAD (emphasis mine) which clearly run contrary to Team Obama’s “disparity proves discrimination and requires government action” agenda in regard to gender differences in wages:
In the political domain, the values calculated for the raw gap have been interpreted by many people as a clear indication of overt wage discrimination against women, and have been advanced as a justification for proposed policies mandating equal pay or comparable worth. In the economic domain, the values calculated for the raw gap have been the stimulus for a substantial amount of scholarly research that has attempted to identify the sources of the observed differences in earnings, and to evaluate their relative importance.
There are observable differences in the attributes of men and women that account for most of the wage gap. Statistical analysis that includes those variables has produced results that collectively account for between 65.1 and 76.4% of a raw gender wage gap of 20.4%, and thereby leave an adjusted gender wage gap that is between 4.8 and 7.1%. These variables include:
1. A greater percentage of women than men tend to work part-time. Part-time work tends to pay less than full-time work.
2. A greater percentage of women than men tend to leave the labor force for child birth, child care and elder care. Some of the wage gap is explained by the percentage of women who were not in the labor force during previous years, the age of women, and the number of children in the home.
3. Women, especially working mothers, tend to value “family friendly” workplace policies more than men. Some of the wage gap is explained by industry and occupation, particularly, the percentage of women who work in the industry and occupation.
4. Research indicates that women may value non-wage benefits more than men do, and as a result prefer to take a greater portion of their compensation in the form of health insurance and other fringe benefits.
5. More of the raw wage gap could be explained by including some additional variables within a single comprehensive analysis that considers all of the factors simultaneously; however, such an analysis is not feasible to conduct with available data bases.
6. This study leads to the unambiguous conclusion that the differences in the compensation of men and women are the result of a multitude of factors and that the raw wage gap should not be used as the basis to justify corrective action. Indeed, there may be nothing to correct. The differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers.
Bottom Line: CONSAD’s study of gender wage differences found that “there may be nothing to correct” because of the fact that men and women play different roles in the labor market and different family roles – by choice. In other words, no “Paycheck Fairness Act,” no executive orders, no government action required, and therefore not part of Team Obama’s agenda that places the importance of government action far above the importance of the voluntary choices made by individuals, with any evidence to the contrary being ignored or removed from government websites.
3. Who-d a-Thunk It II? Harry Reid and Senate Democratic leaders are hypocritical about “equal pay and opportunities” for women, especially when compared to the GOP?
Sen. Chuck Schumer, Sen. Harry Reid and the others in the Senate Democratic leadership — Majority Whip Dick Durbin and Conference Secretary Patty Murray — are hypocritical in saying they want women to have equal seniority and pay. Not one of them has a female chief of staff or communications director, the person spearheading this week’s publicity stunts.
On the contrary, Senate GOP leaders demonstrate gender equality in the workplace. The top two leaders have female chiefs of staff — Sharon Soderstrom for Minority Leader Mitch McConnell and Beth Jafari for Minority Whip John Cornyn. These women are also the highest-paid chiefs of staff in leadership, which is commensurate with their positions.
Four of the five leaders — Mr. Cornyn, Conference Chairman John Thune, Policy Committee Chairman John Barrasso and Conference Vice Chairman Roy Blunt — have female communications directors. These high-power jobs usually are not family-friendly, yet two of these women are working mothers. Furthermore, these women are paid an average salary of $124,000, which is about $18,000 a year more than Democrats pay men doing the same job.
4. Who’d a-Thunk It III? Michigan Sen. Debbie Stabenow teams up with Michigan-based Dow Chemical and other large industrial users of natural gas to stop natural gas exports?
6. Professional Licensing: A Risk to the Free Markets and Freedom of Speech:
In almost every industry, trade associations representing established players push for legislation and regulation to protect their members from competition, usually under the guise of promoting public safety. Such efforts represent not just a threat to a free market, but to our freedom of speech as well.
2. Amazon Dash is a free, handheld barcode reader that lets consumers scan items on their own shelves, and then order and buy from Amazon Fresh, see video demo above.
Uber is launching an experimental line of Uber couriers in Manhattan who will deliver packages on foot or by bike for as little as $15. It’s a trial run that is clearly meant to show that while Uber is known for transporting people, it can transport things, too.
Glen Kessler, the Washington Post’s Fact Checker, just increased his rating today for Obama’s persistent ’77-cent’ claim on the gender wage gap from One Pinocchio (“Some shading of the facts. Selective telling of the truth. Some omissions and exaggerations, but no outright falsehoods.”) to Two Pinocchios (“Significant omissions and/or exaggerations. Some factual error may be involved but not necessarily. A politician can create a false, misleading impression by playing with words and using legalistic language that means little to ordinary people.”), and he almost gave Obama a 3 Pinocchio rating! Here’s part of Glenn’s report (and see video above):
Today, the average full-time working woman earns just 77 cents for every dollar a man earns…in 2014, that’s an embarrassment. It is wrong.”
–President Obama, remarks on equal pay for equal work, April 8, 2014
In 2012, during another election season, The Fact Checker took a deep dive in the statistics behind this factoid and found it wanting. We awarded the president only a Pinoochio, largely because he is citing Census Bureau data, but have wondered since then if we were too generous.
We also called out the president when he used this fact in the 2013 State of the Union address. And in the 2014 State of the Union address. And yet he keeps using it. So now it’s time for a reassessment.
The Truth Teller video above also goes through the details.
There appears to be some sort of wage gap and closing it is certainly a worthy goal. But it’s a bit rich for the president to repeatedly cite this statistic as an “embarrassment.” (His line in the April 8 speech was almost word for word what he said in the 2014 State of the Union address.) The president must begin to acknowledge that average annual wages does not begin to capture what is actually happening in the work force and society.
Thus we are boosting the rating on this factoid to Two Pinocchios. We were tempted to go one step further to Three Pinocchios, but the president is relying on an official government statistic–and there are problems and limitations with the other calculations as well.
For about the last seven months starting last September, I’ve been blogging about the 12% gender pay gap at the White House illustrated above, see my original post here, see a December 2013 post here, a January 2014 post here, another January 2014 post here, a February 2014 post about February 20 being “Equal Pay Day” at the White House for 2014, and a March 2014 post here. Not much happened until this week, when the story percolated long enough I guess, that it finally got some media traction and now it’s everywhere: Drudge Report, CNN, Bloomberg TV, Washington Post, New York Times, CBS news, talk radio, etc. And the result is that Jay Carney and Team Obama are now frantically trying to explain their own 12% gender pay gap, just as Obama issued two executive orders today concerning fair pay for women employed by federal contractors.
Here are some of the media reports over the last few days highlighting the White House’s hypocrisy on the gender wage gap:
1. Video (note that the opening graph features a variation of the chart above) and report below via Newsbusters:
On Tuesday’s CBS This Morning, White House correspondent Major Garrett completely dismantled President Obama’s left-wing talking points on the supposed gender pay gap of women making 77 cents on the dollar compared to men, reporting: “The White House is getting…roughed up by hits own pay equity rhetoric.”
Garrett used the administration’s hypocrisy on the issue to fact check the false claims: “An analysis of White House salaries, which nobody here disputes, shows that the median income of female staffers is 88% of that of male staffers….Now, the White House said its gender pay gap is tied to job experience, education, and hours worked, among other factors. This matters because those explanations, according to the Labor Department, explain a good deal of the gender pay gap nationally.
The big difference in these stories, when President Obama discusses this issue nationally he doesn’t mention those other work variables, only the broad figure that 77 cents per dollar is what women earn compared to men in median wages.”
2. Watch a video below of Jay Carney squirming as he unsuccessfully tries to defend the 12% gender pay gap at the White House, courtesy of the Washington Post, and see its report here titled “The White House’s own wage gender gap.“
3. The New York Times reported yesterday that “As Obama Spotlights Gender Gap in Wages, His Own Payroll Draws Scrutiny.”
Even as Mr. Obama seeks to make an issue of the gender gap in compensation across the country, however, his own hiring is facing some scrutiny. The recent study, by the conservative, showed that the median annual salary for women in the White House last year was $65,000, while the median annual salary for men was $73,729. The study was based on White House salary data.
4. In this video segment, CNN’s John King called the White House’s push for equal pay “A textbook case … of do as I say, not as I do.”
5. Fred Lucas reporting for The Blaze gives me a little credit in his report “Economics Professor: White House Holds Itself to a Different Standard on Gender Pay Equity.”
6. Here’s from another CNN report “Inside Politics: Equal Pay gap reaches White House“:
For the past several elections, Democrats have adopted the equal pay issue and made the equality of paychecks a huge priority. But the issue of equal pay plagues President Obama’s White House. An analysis by the conservative American Enterprise Institute found that women staffers made about 88 cents on the dollar, compared with male staffers.
Bottom Line: Along with my WSJ op-ed today with Andrew Biggs (“The ’77 Cents on the Dollar’ Myth About Women’s Pay“), it was a pretty good day for a dose of some overdue statistical and economic sanity, and a good day for exposing the ’77 cents on the dollar’ myth that has gradually morphed from a faulty or incomplete analysis of gender wage differentials into more of a political lie.
From my op-ed in today’s Wall Street Journal with my AEI colleague Andrew Biggs (“The ’77 Cents on the Dollar’ Myth About Women’s Pay“):
Today, April 8, is “Equal Pay Day,” an annual event to raise awareness regarding the so-called gender wage gap. As President Obama said in the State of the Union address, women “still make 77 cents for every dollar a man earns,” a claim echoed by the National Committee on Pay Equity, the American Association of University Women and other progressive groups.
In its annual report, “Highlights of Women’s Earnings in 2012,” the Bureau of Labor Statistics states that “In 2012, women who were full-time wage and salary workers had median usual weekly earnings of $691. On average in 2012, women made about 81% of the median earnings of male full-time wage and salary workers ($854).” Give or take a few percentage points, the BLS appears to support the president’s claim.
While the BLS reports that full-time female workers earned 81% of full-time males, that is very different than saying that women earned 81% of what men earned for doing the same jobs, while working the same hours, with the same level of risk, with the same educational background and the same years of continuous, uninterrupted work experience, and assuming no gender differences in family roles like child care. In a more comprehensive study that controlled for most of these relevant variables simultaneously—such as that from economists June and Dave O’Neill for the American Enterprise Institute in 2012—nearly all of the 23% raw gender pay gap cited by Mr. Obama can be attributed to factors other than discrimination. The O’Neills conclude that, “labor market discrimination is unlikely to account for more than 5% but may not be present at all.”
These gender-disparity claims are also economically illogical. If women were paid 77 cents on the dollar, a profit-oriented firm could dramatically cut labor costs by replacing male employees with females. Progressives assume that businesses nickel-and-dime suppliers, customers, consultants, anyone with whom they come into contact—yet ignore a great opportunity to reduce wages costs by 23%. They don’t ignore the opportunity because it doesn’t exist. Women are not in fact paid 77 cents on the dollar for doing the same work as men.
Administration officials are (very) occasionally challenged on their discrimination claims. The reply is that even if lower average female pay is a result of women’s choices, those choices are themselves driven by discrimination. Yet the choice of college major is quite free, and many colleges recruit women into high-paying science or math majors. Likewise, many women prefer to stay home with their children. If doing so allows their husbands to maximize their own earnings, it’s not clear that the families are worse off. It makes no sense to sue employers for choices made by women years or decades earlier.
The administration’s claims regarding the gender pay gap are faulty, and its proposal to make it easier for women to sue employers for equal pay would create a disincentive for firms to hire women
Every year the National Committee on Pay Equity (NCPE) publicizes “Equal Pay Day” to bring public attention to gender pay gap. “Equal Pay Day” this year will take place tomorrow on April 8, and represents how far allegedly into 2014 the average woman will have to continue working to earn the same income that the average man earned last year based on the questionable assumption that women working full-time earned 23% less than men on average last year.
President Obama will use “Equal Pay Day” this year to issue two new executive orders addressing the wage gap between men and women, including one that will require all federal contractors to report employee compensation data by race and sex to the Department of Labor. Interestingly, the White House has its own 12% gender wage gap as I reported recently on CD. In that post, I calculated that February 20 was “Equal Pay Day” at the White House this year, based on the fact that women working in the Obama White House earn only 88 cents on average for every dollar male staffers made in 2013. At a White House press briefing today, Jay Carney tried somewhat unsuccessfully to explain the 12% gender pay gap for White House staffers.
Inspired by Equal Pay Day, I introduced “Equal Occupational Fatality Day” back in 2010 to bring public awareness to the huge gender disparity in work-related deaths every year in the United States. “Equal Occupational Fatality Day” tells us how many years into the future women would have to work before they would experience the same number of occupational fatalities that occurred in the previous year for men.
Using annual Bureau of Labor Statistics (BLS) data on workplace fatalities by gender for 2012 (and assuming those fatality data will be similar in 2013 – the actual data won’t be available until August) an “Equal Occupational Fatality Day” can be calculated. As in previous years, the chart above shows the significant gender disparity in workplace fatalities in 2012: 4,045 men died on the job (92.3% of the total) compared to only 338 women (7.7% of the total). The “gender occupational fatality gap” in 2012 was considerable — almost 12 men died on the job for every woman who died while working.
Based on the BLS data on occupational deaths by gender, the next “Equal Occupational Fatality Day” will occur almost ten years from now – on December 20, 2023. That date symbolizes how far into the future women will be able to continue working before they experience the same estimated loss of life that men experienced in 2013 from work-related deaths. Because women tend to work in safer occupations than men on average, they have the advantage of being able to work for more than a decade longer than men before they experience the same number of male occupational fatalities in a single year.
Economic theory tells us that the “gender occupational fatality gap” explains part of the “gender pay gap” because a disproportionate number of men work in higher-risk, but higher-paid occupations like coal mining (almost 100 % male), fire fighters (96.6% male), police officers (84.8% male), correctional officers (72% male), farming, fishing, and forestry (77.3% male), roofers (98.5% male) and construction (97.5% male); BLS data here. On the other hand, a disproportionate number of women work in relatively low-risk industries, often with lower pay to partially compensate for the safer, more comfortable indoor office environments in occupations like office and administrative support (73.3% female), education, training, and library occupations (73.6% female), and healthcare (75% female). The higher concentrations of men in riskier occupations with greater occurrences of workplace injuries and fatalities suggest that more men than women are willing to expose themselves to work-related injury or death in exchange for higher wages. In contrast, women more than men prefer lower risk occupations with greater workplace safety, and are frequently willing to accept lower wages for the reduced probability of work-related injury or death.
Bottom Line: Groups like the NCPE use “Equal Pay Day” to promote a goal of perfect gender pay equity, probably not realizing that they are simultaneously advocating an increase in the number of women working in higher-paying, but higher-risk occupations like fire-fighting, roofing, construction, farming and mining. The reality is that a reduction in the gender pay gap would come at a huge cost: several thousand more women will be killed each year working in dangerous occupations.
Here’s a question for the NCPE that I ask every year: Closing the “gender pay gap” could only be achieved by closing the “occupational fatality gap.” Would achieving the goal of perfect pay equity really be worth the loss of life for thousands of additional women each year who would die in work-related accidents?
|Occupation||Average Annual Wage, 2013|
|Average for All Workers
Every time CEO salaries of S&P500 companies are reported, there’s a lot of hand-wringing, criticism of “excessive CEO compensation,” and the inevitable comparisons of rising CEO salaries to stagnant pay for average workers, and how that contributes to rising income inequality, etc. For example, here’s how USAToday reported 2013 CEO pay in an article last week titled “Millions by millions, CEO pay goes up“:
When it comes to executive pay, 2013 could be one for the record books, with 15 CEOs and other key members of publicly held companies gaining membership into the $100 million-plus compensation club, likely the most since before the 2008 financial crisis.
USA TODAY’s analysis of Standard & Poor’s 500 companies headed by the same CEO the past two fiscal years shows 2013 median pay — including salary, bonus, incentive awards, perks and gains from vested shares and exercised stock options — jumped 13% to $10.5 million, a level buoyed by soaring stock prices that’s likely to rise as more companies meet annual Securities and Exchange Commission filing deadlines.
Coming in a year in which corporate earnings gains continue to come mostly from job cuts and streamlining instead of organic growth, as well as nearly a decade of stagnant wage growth for rank-and-file workers, continued gains in CEO pay underscore the disconnect between boardrooms and Main Street. Among the nation’s 104.8 million full-time workers, average median annual wages were $40,872 last year, up just 1.4% over 2012.
“The extremes are getting bigger and run smack dab into the debate of income inequality,” says veteran compensation consultant Alan Johnson.
MP: It should be noted that USAToday’s analysis includes the CEOs of only 200 of America’s largest multinational companies in the S&P500. According to the US Census, there are more than 27 million private firms in the US, so the 200 firms reported by USAToday represent only one of every 135,000 private firms in the US, or 0.00074% (less than 1/1000 of 1%). Note also that USAToday compares the annual wages of ALL full-time employees working at more than 27 million companies to the CEO pay of executives at only 200 companies.
We can get a more accurate and complete picture of CEO compensation by looking at wage data just released by the Bureau of Labor Statistics in its annual report on Occupational Employment and Wages for 2013. The BLS report provides “employment and wage estimates by area and by industry for wage and salary workers in 22 major occupational groups,” including the category “chief executives.” In 2013, the BLS reports that the average pay for America’s 248,760 chief executives was only $178,400. The 200 S&P500 firms reported by USAToday represent only one out of every 1,243 firms in the country that have a CEO at the head, and that small sample of 200 would represent only 0.08% of American CEOs, or less than one-tenth of one percent of all CEOs. The larger sample of CEOs reported by the BLS gives us a much better understanding of “average CEO compensation.”
For the larger sample of CEOs reported by the BLS, their average pay increased by only 0.88% in 2013, from $176,840 in 2012. In contrast, the BLS reports that the average pay of all workers increased by 1.42% last year to $46,440 from $45,790 in 2012. That’s right, the average worker last year saw an increase in their pay that was more than 60% greater than the increase in pay for the average CEO.
As the Wall Street Journal pointed out last week, the average U.S. orthodontist earns $196,270, or 10% more than the average CEO ($178,400). But you would certainly never think that from all of the media hype about “overpaid CEOs” and “excessive CEO compensation,” etc. We never hear about “overpaid orthodontists” or “excessive orthodontist compensation,” or the fact that orthodontist pay increased by 5.34% in 2013, or 6 times the 0.88% increase in the average CEO’s pay last year. You would also never think that the average dentist makes $168,870, almost as much as the average CEO. “Excessive dentist compensation”?
Other medical professionals like anesthesiologists ($235,000), surgeons ($233,000), obstetricians ($212,000), internists ($188,000), family practitioners $184,000), and psychiatrists ($183,000) all earned more on average last year than the average CEO. Even the average nurse anesthetist ($158,000) and petroleum engineer ($149,000) earned salaries last year that weren’t too far below the average CEO (see table above).
Bottom Line: Discussions about “excessive CEO pay” are distorted by looking at only an outlier group of the 200 CEOs of America’s largest companies, out of 248,760 chief executives nationwide. Of course, many young, risk-taking CEOs are running early stage startups and tech companies, and probably make even less than the average CEO as reported by the BLS, as Scott Drum points out to me in an email. Further, he comments that “They’re usually not in it for the salary. They’re in it for the payoff if things go well. If we reduce the size of the Big Payoff, don’t we affect the number of people trying to get there?” The fact that there are almost 250,000 ambitious CEOs making less than $200,000 today on average who are trying to someday be listed by USAToday as one of the top 200 highest-paid CEOs in the US is a sign of a dynamic, wealth-generating economy. We should applaud the richest 200 CEOs as a group of the most successful American business professionals, and not vilify them. And we should keep in mind that they are an outlier, elite group, and not representative of the average CEO in America, who earns about as much as the average dentist.
Has anybody else noticed these theft-detection devices on Tide laundry detergent! I took the photo above today at a local CVS store in DC, where the Tide laundry detergent containers, but nothing else in the store, had the type of theft detection devices that you usually see on high-end clothing in department stores. But is CVS really worried now about theft of Tide laundry detergent? Apparently so, and a post at the Priceonomics blog titled “Why Thieves Steal Soap” explains what’s going on:
In fact, the consistent demand for products like soap on the illicit market can make it as good as stealing cash. Last year, for example, New York Magazine ran a story describing how thieves steal Tide Detergent to buy drugs. The piece opens by describing one Safeway store that lost $10,000 to $15,000 a month to thefts of Tide detergent.
And this interesting excerpt from the New York Magazine story mentioned above:
It turned out Tide laundry detergent wasn’t being used as an ingredient in some new recipe for getting high, but instead to buy drugs themselves. Tide bottles have become ad hoc street currency, with a 150-ounce bottle going for either $5 cash or $10 worth of weed or crack cocaine. On certain corners, the detergent has earned a new nickname: “Liquid gold.” The Tide people would never sanction that tag line, of course. But this unlikely black market would not have formed if they weren’t so good at pushing their product.
MP: Seems like as an alternative currency, Tide laundry detergent has become something like a “ghetto Bitcoin”?