The truth about the wage gap myth

The gender wage gap, at least in the way we are sold it, is nothing short of a myth.

Claims that women in Canada are payed 77 cents on the dollar to that of a man, or more outrageously are paid 69 cents on the dollar as federal Finance Minister Bill Morneau claimed during his budget speech last week are nothing short of complete BS. They have the same claim on validity as children that run up and down sidewalks claiming, “Step on a crack, break your mama’s back.”

That isn’t to say that there isn’t a gender wage gap but it is far from the politicians and activists claim.

Lat month, Maclean’s had a whole feature on the wage gap and how women are paid less than men but forced to pay more for goods and service but even their research couldn’t match their claims on the wage gap.

It turns out that when people claim women earn 69 cents on the dollar for what a man earns, they are adding up every dollar earned by a man and every dollar earned by a woman and just saying it should all be equal regardless of what job is being done, what level of experience those doing the work have or any other mitigating factors. Basically, this is the number Bill Morneau used in his budget and it is socialism.

As I will explain below, when most factors are accounted for the gender wage gap is 8%, factor in a few more pieces of the puzzle and it is either zero or comes out in favour of women.

We used to talk, in my mother’s day, of equal pay for equal work. My mother actually had to fight for this sort of thing. Men were paid more just for being men which is both wrong and ridiculous. There were even jobs that were kept from women because they were women. That is a man’s job my mother was told, at least in Canada.

When my mother first came to this country in 1968, she was denied a job at a major bank because it required working with electronics and computers, something she had done in Scotland but could not do here because she was a woman. In the 80s and 90s she was part of a pay equity committee to make sure that people doing the same job, or at least similar work, were on the same pay scale.

Now we don’t talk of equal pay for equal work, we talk of equal pay for work of equal value. That is the term used in Bill Morneau’s budget.

What the hell is that?

Well in one of the craziest examples I saw, one that went to the Supreme Court, a union representing flight attendants claimed that it was sexist that pilots and mechanics were paid more than flight attendants. Their argument was that since flight attendants were mostly women and pilots and mechanics were mostly men, this explained the wage gap.

As a frequent flier, I will gladly give up a flight attendant bringing me my drink and telling me to put my seat up for landing before I will give up a pilot or mechanic.

The phrase “equal work for work of equal value” is an attempt to use a bureaucratic process, a government driven process, to change wages in the way the market would not. I might think my writing is of equal value to someone that makes much more than me but I can’t make the government force people to pay me more.

Most of the claims of a big wage gap between men and women are based on lazy assessments that are repeated by lazy journalists that see a story that matches their world view. Thus the oft repeated 69 cents or 77 cents on the dollar claims.

But what do the facts actually state?

The facts, according to Statistics Canada, are that after you account for age, education, tenure, occupation, industry and other mitigating factors the gender wage gap falls to 8%. Not 31%. Not 23%. A simple 8%.

The unexplained component amounts to 0.076, i.e., roughly 8% [exp(0.076)-1], thereby implying that, in broadly comparable industries and occupations, women’s wages amounted to 92% of men’s wages in 2011.

Now I will admit that these numbers are a few years old but they are the best we have right now. I will also note that an 8% wage gap is still too high. But it is much smaller than what we are told it is.

One factor not included in that study by Stats Canada, but detailed elsewhere, is that men on average, work more hours than women. According to Stats Canada, men work on average six more hours per week than women. Could that play a part in the “wage gap?”

When you also account for the fact that women have stronger job security, as proven by looking at unemployment rates over the last ten years but especially during the recession. When you look at the fact that women are more likely to be in government jobs with fully indexed pensions and benefits – meaning deferred wages. When you look at the fact that young women are now dominating in fields that the activists used to claim were the old boys clubs like medicine, law or journalism.

Well, when you look at all those factors, and the facts that I have laid out, can you claim that there is a wage gap at all?

WATCH: Watch the opening of Wednesday night’s radio show below.