Pay Problems.

Some Economists Say That Wage Bias Goes Much Deeper Than Gender.

ONE of the givens in any discussion about wage trends in the U.S. is that there is a large gender gap that is patently unfair.

Labor Department figures show that women workers earned only 76.5 percent as much as men in full-time jobs during 1999 -- up from 62.5 percent two decades before, but still far enough behind to suggest that something needs to be fixed, and soon.

A growing group of economists is challenging the gender-gap figures, however, contending that they overstate the differential between men's and women's pay, and arguing that little of the genuine gap actually stems from wage discrimination.

"The factors that lead to pay differences between women and men are extremely difficult to measure," said June O'Neill, who headed the non-partisan Congressional Budget Office from 1995 to 1999.

Congress has sought to correct imbalances in jobs and pay. The 1963 Equal Pay Act prohibits employers from paying women less than men for doing substantially the same work. And by any measure, women have made stunning progress in breaking down barriers on jobs and pay.

Government surveys show that women now make up almost 29 percent of lawyers and judges, compared to 16 percent in 1983. They make up 59 percent of accountants, up from 39 percent. And they make up 17 percent of police officers, up from 6 percent.

Their numbers have risen dramatically in fields where only a few decades ago they were barred or else were a small minority, from physicians and college professors to purchasing managers and -- to a lesser extent -- construction workers.

In a new study, Howard J. Wall, an economist at the Federal Reserve Bank of St. Louis, says almost a third of the wage gap comes because the Labor Department figures -- based on median weekly hours -- don't account for the fact that women generally work fewer hours each week than men.

Calculating the gap using hourly earnings instead of weekly earnings brings the difference between men's and women's wages to 16.2 cents an hour instead of 23.5 cents. By that measure, women's median hourly earnings in 1999 were 83.8 percent of men's.

As for the rest of the gap, Wall asserts, much of it reflects other factors, not bias. With some exceptions, women still tend to have less experience, to work in occupations that traditionally are low paying and to interrupt their careers to have children.

Small wonder that they're not always able to command comparable salaries, he suggests.

In his defense, Wall has plenty of company in proffering such arguments -- and not all of it men, either. A 1997 study by Francine Blau and Lawrence Kahn suggested that as much as 62 percent of the gender gap in hourly wages reflected such factors.

Economists Diana Furchtgott-Roth and Christine Stolba have found that the average hourly earnings of women aged 27 to 33 who have never had a child amount to 98 percent of what men earn, even before accounting for training, experience and occupation choice.

A 1998 report by the President's Council of Economic Advisers concluded that while bias persists, it's hard to determine how much of the gender gap reflects discrimination and "how much is due to differences in choices or preferences" between the sexes.

Each of these studies has something to say about the question, says O'Neill, who now heads the Center of Business and Government at Baruch College. "It's very difficult to address the issue in a reasonable way," she said.

To be sure, attributing part of the gender gap to workplace realities such as job experience, occupation choice and childbearing -- rather than to discrimination by employers -- doesn't moot the gender-gap issue.

'Unequal choice'

Vicky Lovell, a researcher at the Institute for Women's Policy Research, says that while such "disaggregations are valuable" statistically, they don't really tackle the question of whether these differences in work patterns should be discounted.

"There's a difference in perspective about what these things mean," Lovell says. "Some people argue that working fewer hours and taking time out for childbearing are 'voluntary' choices, but I interpret that as an unequal choice."

Lowell said she hasn't "seen any convincing data analysis that really showed there wasn't any discrimination in the workplace." Moreover, "People are still winning lawsuits. That's pretty strong evidence that there is discrimination going on."

Is Federal Reserve economist Wall really saying that the Labor Department's number is misleading and that wage discrimination against women isn't really a serious problem? "Well, yes and no," he writes.

Since in his view most of the wage gap reflects other workplace realities rather than discrimination, Wall argues that the figure is "illusory" as an indicator of bias in the American workplace.

On the other hand, he concedes, no one "has been able to explain it away entirely."

The bottom line for Wall is that "as long as people choose to have children, there will likely still be a gap between the average earnings of men and women," so the gender gap figure is most useful as an indicator of changes in expectations and norms.

Spoken just like an economist.

Art Pine is a columnist for Bloomberg News.