A Market Solution to the Pay Gap

Authors

• Stephen A. Plass

Abstract

The pay gap between men and women is typically defined as the ratio of median annual earnings of men and women working full time. The gap is attributable to many pre- and post-labor market factors such as family background, work aspirations, education, experience, ability, hours worked, unionization rates, workplace practices or conditions, technological developments, and even public health developments. Because a large variety of personal and labor market factors contribute to the pay gap, it is highly improbable that the median pay of men and women will ever be the same, any more than pay for younger and older workers. Despite these realities, eliminating the pay gap remains a public policy priority and preoccupation. Public outcry about employment practices that help perpetuate lower pay for women has led to calls for regulatory intervention. This has produced new state rules prohibiting salary history inquiries and laws mandating disclosure of salary ranges in job listings. These laws are intended to eliminate discriminatory pay practices and serve as incremental stopgap measures in the absence of federal regulations. The absence of a federal paid family leave law is also now being addressed by state regulation intended to promote greater labor force participation and pay for women. This article addresses the competing claims about the causes of the pay gap, and the notion that it is possible to eliminate it. It shows that regulatory intervention, and antidiscrimination legislation, historically have done little to close the pay gap. It also shows that a combination of societal and market forces has operated to reduce the gap over time and it will take other societal transformations to farther reduce it. This article explores the prospects for greater wage convergence stemming from shifting societal attitudes about work, and from changing labor market demands that will give women the flexibility they need to work and earn more. It suggests that a transformation in attitudes about male and female job roles and family care responsibilities is also needed to farther reduce the pay gap. Signs that this can happen come from data that show men are working less and millennials are prioritizing work life balance. Now that gender differences in education, work experience, and attach­ment to the labor force have-for the most part-been eliminated, long hours worked by men, as well as gendered care roles that take women out of work, are primarily responsible for the pay gap. As a result, anti-dis­crimination, pay transparency, and parental leave laws will likely have a negligible effect because such regulations do not address the root causes of the pay gap and are susceptible to evasion by employers.

Recommended Citation

Plass, Stephen A. (2024) "A Market Solution to the Pay Gap," Hofstra Labor & Employment Law Journal: Vol. 42: Iss. 1, Article 2.
Available at: https://scholarlycommons.law.hofstra.edu/hlelj/vol42/iss1/2