The Importance of Major Industry to Wyoming's Gender Pay Gap: Part One
by: Rich Peters, Labor Market Analyst
Equal pay for equal work inspires lively debate among employers, labor and regulatory government agencies, but none more so than the wage gap between male and female workers.1 The following analysis studies summarized wage differences between males and females in Wyoming’s labor force. The results show 68.5 percent of the female working population work in Retail Trade and Services industries, which pay among the lowest average wage of all industries (see Figure). A mixture of labor market variables such as primary industry of work, number of quarters without work and number of job changes can individually explain 10.5 to 30.8 percent of the gap between male and female wages from 1992 to 1997. Other market variables available to Research & Planning (R&P) offered little or no explanatory value. We suggest that non-market factors such as societal values and an interactive mixture of non-market and market factors explain the remaining pay gap. For evidence that non-market factors play a predominate role, further research could track segregated age groups to establish initial labor force conditions and analyze the effect of life choices over time as an effect of market behavior. A practical application of this and subsequent analyses may supplement existing guidance, education and training opportunities for women by employment agencies such as the Department of Employment and the Department of Family Services and programs established by the Workforce Investment Act.
A Review of Gender Equity in Wyoming Labor Force Trends
In the May 1993 issue of Wyoming Labor Force Trends, Gregg Detweiler sparked research into gender equity by describing the upward trend in the number of women in the labor market.2 He proposed three tentative assumptions based on an analysis of time series data from the Current Employment Statistics (CES) program. First, there exists an increase of women replacing men in Wyoming’s labor force. Either occupational replacement or labor market shifts occur. Occupational usurpation involves the replacement of skilled and unskilled male labor with equally matched female labor. If this were the case, the opportunity for women to receive equal pay for equally skilled, tenured and hourly work would increasingly match that of men, much like the current trend observed at the national level.3
Secondly, increases in single parent households compel more women to secure employment outside the home. However, this is a condition outside direct labor market observation because societal values change periodically and are difficult to quantify.
Lastly, modern social liberties make it acceptable, if not preferable, for females to actively pursue career opportunities, deferring the costs of child bearing to middle adulthood. Birth rates remain steady, if not decreasing, while the age of first-time mothers is increasing.4 Further indications of this popularized trend include the medical services industry’s increasing revenues from fertility medications and women’s health.
In an explanatory article in the November 1993 issue of Trends, Mariann Johnston followed Detweiler’s propositions by analyzing occupational job growth using 1980 and 1990 decennial census data for Wyoming.5 Juxtaposing labor force trends with female societal roles, the study found that growth occupations were primarily “pink collar”—occupations traditionally held by female workers. The finding addressed some economic issues faced by working females. For example, what career paths benefit women? The study also qualified Detweiler’s first postulate that females were replacing men in the labor market by showing job growth occurring in occupations typically populated by females. The study also brings to issue the increased importance of education on employment opportunities. Johnston suggests that women place more emphasis on education to increase their viability as potential employees. Recent national studies by the Bureau of Labor Statistics support this claim.6 Whether this strategy reduces the gender pay gap in Wyoming remains to be seen.
In a descriptive article in the May and June 1996 issues of Trends, Brett Judd and Gregg Detweiler formulated relationships between gender, age and average wages.7 During the course of the investigation, one fact was brought to light. The federally funded Current Employment Statistics (CES) program does not require establishments to differentiate between full- and part-time employment for individual workers. Furthermore, state-collected Unemployment Insurance information offers no remedy for this lack of data in administrative records. The reason full- and part-time employment information for individuals is important is the hindrance researchers face when attempting to investigate relationships between the number of hours worked and earnings. This hindrance carries over to gender pay gap analysis, because we do not know whether earnings are due to de facto or explicit discriminatory practices in the labor market or simply a matter of the prevalence of part-time employment.8 It also makes it difficult to conclude economic and social factors for the gender pay gap.9
Another R&P investigator, Mary Beth O'Loughlin, focused on the relationships between gender, pay increases and tenure in the August 1997 issue of Trends.10 The study found significant pay increase gaps between men and women, where men received higher pay increases than women in all of Wyoming’s industries.11 However, by reexamining the findings and calculating a cumulative pay increase ratio instead of pay increases alone, new research suggests women workers, typically those found in lower starting wage brackets, actually received proportionately higher pay increases (49.7%) than men (48.3%) across all industries (see Table). Although possible, Wyoming’s skewed pay increase is not likely different from that found nationally, which suggests that pay increases and benefits are equal among genders.12
Many of the aforementioned studies relied upon the accuracy and consistency of labor market information provided by CES, Covered Employment (ES-202) and the Unemployment Insurance wage record database. In a recent study by Dr. Burke Grandjean, limitations in administrative databases, which exclude CES, were found.13 They include input errors, a 90.0 percent capture rate and missing demographic information (e.g., age and date of birth). Additionally, self-employed individuals, railroad employees and employees of religious organizations are not covered by Unemployment Insurance and thus are not included in ES-202 or Unemployment Insurance wage records.14
Conclusion
With this review, we have looked at past descriptive and explanatory research into the gender pay gap issue in Wyoming’s labor force. Along the way, we found limitations with labor market information and definitions of key terms that hinder our ability to respond to topics involving pay differences. The analysis that will follow in the August 2000 issue of Trends adjusts for these difficulties by focusing on the importance of industry segmentation and minimizing the migratory fluctuations of Wyoming labor. The goal is to answer why the gender pay gap exists in Wyoming and offer any constructive remedies that may minimize the pay differential.
1 The United States Senate Committee on Health, Education, Labor and Pensions Hearing on Gender Based Wage Discrimination. June 8, 2000.
2 Gregg Detweiler, “Are Women Replacing Men in the Workforce?” Wyoming Labor Force Trends, May 1993, p. 1.
3 Mary Bowler, "Women’s Earnings: An Overview,” Monthly Labor Review, U.S. Department of Labor, Bureau of Labor Statistics, December 1999, pp. 13-21.
4 “More women nowadays are either postponing or not ever having kids. Twenty-seven percent of women 30 to 34 in 1995 had never given birth; in 1976, the corresponding proportion was 16 percent. The same trend also holds for women in their late 30s (20 percent were childless in 1995, 11 percent were in 1976) and early 40s (18 percent and 10 percent, respectively). ”News Release, November 25, 1997, http://www.census.gov/Press-Release/cb97-192.html (June 30, 2000).
5 Mariann Johnson, “Is There Equality for Women in Wyoming's Labor Force?” Wyoming Labor Force Trends, November 1993, pp. 1-3.
7 Gregg Detweiler and Brett Judd, "The Relation of Age and Gender to Employment in Wyoming Parts One and Two," Wyoming Labor Force Trends, May 1996, pp. 1-4 and June 1996, pp. 1-5.
8 If employers apply goal directed strategies constrained only by economic conditions, then one may create a case for market imposed discrimination as opposed to explicit discrimination based on gender, age or ethnicity. However, recent evidence suggests a strong link between competition and discrimination. For more information, see Sandra E. Black, “Investigating the Link Between Competition and Discrimination,” Monthly Labor Review, U.S. Department of Labor, Bureau of Labor Statistics, December 1999, pp. 39-43.
9 For example, from an employer's perspective, a female employee may not accumulate the necessary tenure to support higher wages. With full- and part-time employment information, we could deduce that outside societal demands correlate with lower wages in the female worker population. Rather tenuously, research in this area has begun at the national level using CPS data, but without the necessary information to establish strong findings.15 Demands placed on women workers outside the workplace as well as subtle discriminatory practices by public and private industry are difficult to observe.
10 Mary Beth O’Loughlin, “Gender, Tenure and Wages,” Wyoming Labor Force Trends, August 1997, pp. 1-5.
11 Errors exist in the analysis. The most salient involves the small sample sizes for Construction, Mining, Manufacturing, TCPU (Transportation, Communications, & Public Utilities) and Wholesale Trade industries. The average wage calculated for these industries is not necessarily representative of working men and women in the state. Another potential error was the failure to explain previous tenure as a possible reason for men earning a higher starting wage than women. And finally, the analysis failed to calculate a cumulative pay increase ratio. By calculating a cumulative pay increase ratio, women are shown to have pay increases across all industries slightly higher than men (49.7% and 48.3%, respectively).
12 David A. MacPherson and Barry T. Hirsch, “Wages and Gender Composition: Why Do Women’s Jobs Pay Less?” Journal of Labor Economics, July 1995, pp. 426-471.
13 Burke Grandjean, “Use of Official Statistics in Administrative Databases,” Wyoming Program Performance Measurement through Unemployment Insurance Wage Record Follow-up, March 1999, pp. 13-18.
14 However, due to a large sample of data collected in Wyoming (over 200,000 workers and 18,000 establishments per year), this statistically significant sample can effectively compensate for the miscapture of workers in the data.
15 Phillip N. Cohen and Susanne M. Bianchi, “Marriage, Children, and Women’s Employment: What Do We Know?” Monthly Labor Review, U.S. Department of Labor, Bureau of Labor Statistics, December 1999, pp. 22-31.
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