March 10, 2007

LA Times clueless

The LA Times had this to say about the gap in wages between genders:

Wage gains for women have sharply surpassed those for men in California this decade, reflecting the concentration of women in fast-growing sectors such as healthcare and financial services and their higher college graduation rates, according to a report released Thursday.Median inflation-adjusted hourly wages for women rose 5.3% from 2000 to 2006, versus a 1.7% decline for men, according to Census Bureau data analyzed by the California Budget Project, a Sacramento-based nonprofit research organization.The data are consistent with other studies showing women making wage gains against men. And though U.S. women overall still earn significantly less than men — 86 cents for every dollar a man makes — the new California numbers indicate that the wage gap is continuing to shrink nationally, said Jean Ross, the project's executive director."To the extent that industries that are expanding continue to expand, it's good news for women," Ross said. And to the extent that women outnumber men in colleges, "there'll be a further narrowing of the wage gap."
As I've argued before, this is one of the silliest statistical/logical fallacies in the media. See, the statistic that women make 86 cents for every dollar a man earns doesn't control for a number of very important variables in wages. For example, it doesn't control for the age of the worker--which is important because older/more experienced workers make more money and typically women tend to leave the labor force at younger ages; it doesn't control for the familial position of the worker--this is important because if a man is a breadwinner for a family, which they tend to be, the wife has the freedom to pursue work largely independent of wages; and it doesn't control for the level of education--which is important because the more education you have the better you'll get paid.Of course, when you control for these three factors, i.e., look at similarly educated, single men and women at approximately the same age there is no statistically significant wage difference.