The stalled progress of gender equality in the US labor market (Research Highlights Featured Chart by AEA). Really!

It is a disgrace for the American Economic Association to promote such demagoguery! See also my blog post here on this demagoguery of a gender pay gap.

What or how much does workforce participation have to do with this "gender equality"?

What is wrong with the chart below? 

1. Data stops with the 1990s. Why not more recent data?
2. Education, workforce participation and age do not determine wage outcomes as much as other factors! It is foremost the choice of jobs, changing jobs, relocating for jobs, prior job experiences, job promotions, career ambitions and so on!

The authors of this paper use again the old, false, and worn out trope of child rearing (why not elder care etc.)! Although, the US abandoned the draft in 1973, still predominantly men choose military service which may or may not negatively affect/impact their lifetime income as well.

The first author Richard Blundell is a highly recognized, older economist, if I am not mistaken. His accumulated lifetime citation count is 109,830, which is quite good! He started publishing research articles in the late 1970s.

"The gender wage gap narrowed dramatically from the mid-1970s through the mid-1990s, with women's wages converging toward those of men across all income levels. Then progress stalled, and despite continued advances in women's education and workforce participation over the subsequent quarter century, the gap has persisted. [???] ..."

From the abstract:

"We estimate the full distribution of life cycle wages for cohorts of men and women in the United States using a quantile selection model to account for systematic differences in employment by gender and education group. 

Although common within-group time effects [???] are shown to be a key driver of labor market inequalities across gender, important additional differences by birth cohort emerge with more recent cohorts of women delaying child rearing [???] and, by implication, the onset of child penalties in wages.

These cross-cohort differences help account for the stalling of progress in gender wage gaps over the past quarter century."

The stalled progress of gender equality in the US labor market

Labour market inequality and the changing life cycle profile of male and female wages (original news release from 4/13/2023 plus working paper)

Labor Market Inequality and the Changing Life Cycle Profile of Male and Female Wages (no public access)

Figure 5 from the authors’ paper shows their estimates broken down by educational attainment.

New research reveals significant wage gap for Latina workers in Santa Barbara, Santa Cruz and Ventura counties. Really!

I bet it is junk science! 

Are they legal to work in the US?

Do these Latinas speak english very well?

In which trades to these Latinas work?

Notice on the chart below, they earn about as much as Latinos and the wage gap between female and male Hispanics is much smaller than between white males and females. 

"Key takeaways:

• Across California, 59% of Latinas participate in the workforce. 
• Latinas tend to get paid less than other women of color, white women and white men in Santa Barbara, Santa Cruz and Ventura counties.
• When Latinas are underpaid, it affects families’ ability to access housing, education and health care, and plan for retirement. The consequences of their financial challenges ripple across the entire region.

..."

New research reveals significant wage gap for Latina workers in Santa Barbara, Santa Cruz and Ventura counties | UCLA

What If Closing the Wage Gap Means Everyone Earns Less?

Partially recommendable! This researcher at the Harvard Business School is onto something!

In principle, general pay transparency is very much a dangerous double edged sword!  It is no panacea! According to a well known German proverb: With money the fun stops! (Bei Geld hört der Spaß auf!). With money things quickly get very serious, contentious, and ugly! It fuels envy!

Pay transparency clearly has strong negative economic effects:

1. Exceptional or high performing humans may not get what they are worth
2. It reduces competition in many ways
3. It introduces rigidities and kills dynamism into the economy
4. It reduces economic freedom
5. As with privacy, some people may not appreciate that the amount of their income is on public display

This HBS professor highlights:

"EQUITY IS SOMETHING THAT HAPPENS WHEN EVERYTHING IS OUT IN THE OPEN. ...
But, what about the original intent of pay transparency, making workplaces fairer and increasing workers’ bargaining power? Cullen notes that through transparency, pay equity is being achieved at the cost of high salaries for some—but perhaps it’s worth that tradeoff."

She must be very naive and myopic!

"It’s a sticky but common dilemma for managers: A valued employee finds out that a coworker earns more, gets upset, and demands a raise. If gender or race figure into the wage gap, tensions can escalate fast.

Companies, including Whole Foods, Starbucks, and the social media tool Buffer, have been touting their pay transparency policies as a means of ensuring fairness. But, as it turns out, pay transparency doesn’t necessarily increase workers’ wages, writes Harvard Business School professor Zoe Cullen in a new working paper. ...
Meanwhile, the legal landscape has shifted in recent years toward transparency. Laws and policies that protect workers’ ability to discuss their compensation with colleagues without fear of repercussions have gained popularity since 2004. ..."

"The public discourse around pay transparency has focused on the direct effect: how workers seek to rectify newly-disclosed pay inequities through renegotiations. The question of how wage-setting and hiring practices of the firm respond in equilibrium has received less attention. To study these outcomes, we build a model of bargaining under incomplete information and test our predictions in the context of the U.S. private sector. Our model predicts that transparency reduces the individual bargaining power of workers, leading to lower average wages. A key insight is that employers credibly refuse to pay high wages to any one worker to avoid costly renegotiations with others under transparency. ..."

What If Closing the Wage Gap Means Everyone Earns Less? - HBS Working Knowledge Companies are under pressure to share more data about employee salaries, but research by Zoe Cullen reveals how pay transparency doesn't always help workers.

Equilibrium Effects of Pay Transparency