“I always valued men and women equally, and I found that because others did not, good women economists were cheaper than men. Hiring women does two things: It gives us better quality work for less money, and it raises the market value of women.’’
– Alan Greenspan
Women’s labor market participation, experience, and education all mirror that of their male counterparts more closely than in any previous period and yet women still earn just 80 cents for every dollar earned by men. While this frequently cited figure is accurate, it is somewhat blunt in its measurement. Career choice, hours worked and other factors discussed in this report explain some, but not all of the difference. Research indicates that bias also plays a role and companies still have some work to do to ensure that women are compensated fairly.
Closing the gender pay gap should be more than just a social goal. For businesses, it is a way to boost profits and tap a deeper pool of talent. For the larger economy, narrowing the pay gap could draw more women into the workforce and increase labor force participation, an oft-cited factor in explaining below – trend GDP growth. Raising female participation and earnings would support income and spending, particularly for low-income households. The Girl with the Draggin’ W-2 is not looking for a hand out. She seeks equal pay for equal work.
The Girl with the Draggin’ W-2
On many fronts, women are on more equal footing with men than at any time in history. Women hold public office, serve in combat roles in the military, and are ordained in many religious denominations. The same holds for women’s progress in the labor market. Women’s participation, experience, education and earnings all mirror that of their male counterparts more closely than in any previous period and yet
women are still compensated at a significant discount. As we detail in this report, much of the difference can be explained. Addressing the rest of the pay gap may be the key to unlocking growth at the macro level and improving business profitability.
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