Women at Work Understanding the Wage Gap and its Impact on Montana’s Workforce Barbara Wagner Chief Economist Economic Update Series July 30, 2015

Montana’s Unemployment Rate Below Normal Levels Source: Local Area Unemployment Statistics for Montana and Current Population Survey for U.S., Bureau of Labor Statistics and MT Dept of Labor and Industry (MT DLI) 5.3% 3.9% U.S. Montana “Normal” Range

Montana’s Aging Population Source: Census and Economic Information Center, MT Dept. of Commerce, April 2013 Under 2020 to 64Over 65

Montana’s Unemployment Rate Expected to Reach Very Low Levels Source: MT Dept of Labor and Industry (MT DLI) Labor Force Participation Projections U.S. Montana “Normal” Range Projected Unemployment Rates

Montana Labor Force Participation Source: ACS Year Estimates, US Census Bureau

Part-time Employment by Gender Full-time, Year-round Part-time, year-round Part-year, Part-time Source: Current Population Survey Data 2012 to 2014, U.S. Census Bureau 6

Take Away Points Worker shortages are expected due to aging workforce and retirements. Greater labor force participation by women is a necessity. – Caregivers also are good targets for recruitment due to previous experience and training. – More women would participate with greater pay and opportunities.

Understanding The Wage Gap Nationally, Women earn 70.6% of men. In Montana, Women earn 67.5% of men. Source: 2013 American Community Survey, 3-Year Estimates

Full-Time, Year-Round Wage Gap Women are more likely to work part-time than men. Including only people that work full-time, year-round – Women earn 78% of men nationally, – Women earn 75% of men in Montana.

U.S. Median Earnings by Education Category (25 Years and Older with Earnings) 10 Source: 2013 American Community Survey 3-Year estimates, U.S. Census Bureau 68.3% $10, % $13, % $19,550 Women Men 67.1% $27,150

U.S. Median Earnings by Race and Gender (Full-time, Year-Round Workers) 11 Source: ACS year estimates, U.S. Census Bureau Women Men 90% $3,100 86% $5,050 90% $3,950 78% $11,200 80% $11,200

U.S. Median Wage by Gender and Class of Worker Source: ACS 2011, 3-year estimates Women Men % $9, % $11, % 7, % 11,850

Source: American Community Survey, Map prepared by Forbes.com. Casserly, Meghan, “The Geography of the Gender Pay Gap: Women’s Earnings by State” earnings-by-state. earnings-by-state

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Take Away Points Gender Wage Gap Exists across – Most occupations (there are a few where pay is equal) – All industries – Private, public, and nonprofit – All education groups – All age groups – All states, with Montana on the bottom half Gap has improved over time, but improvement is slow. 15

What Causes the Wage Gap? It’s not just discrimination – Occupation choice – Industry choice – Education – Experience – Part-time work/ flexible scheduling – Time out of workforce for family care – Union status Other factors that influence the size of the wage gap – Race-- Other factors – Age-- Behavior (i.e. asking for raises) 16 Some of these factors may be influenced by discrimination.

U.S. Occupations where Women Work 17 Source: ACS, Year Estimates. Some small occupations removed for simplicity. Less Money

U.S. Industries Where Women Work 18 Source: ACS, Year Estimates. Some small industries removed for simplicity. More Money Less Money

Choice is Good, But There are Caveats Even within each industry / occupation, there is a wage gap. Men are more likely to be promoted to management positions. – Only 39% of U.S. managers are female. – Only 26% of U.S. chief executives are female. Men are more likely to be hired than women, with the bias towards men increasing in higher-paid jobs. – For a low-wage job, females are 9% less likely to get the job. – At the top of the wage distribution, females are 50% less likely to get the job. Source: 2013 ACS 3-Year estimates, Census Current Population Data, BLS. Gobillon, Meurs, Roux in Journal of Labor Economics, V33, n2, April 2015 and other studies.

Occupation Choice Women choose to work in low-paying occupations 20 Pay Gap Ratio Percent Female Source: ACS, Year Estimates. Some small industries removed for simplicity.

Factors Influencing Pay and the Gender Gap Occupation choice Industry choice Education Experience Part-time work/ flexible scheduling Time out of workforce for family care 21

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What do studies show? Women have more education and slightly higher grades than men Different college majors plays a role in opportunity – Significant attention to recruiting women into STEM degrees Even among students with the same major and equal school performance, men out-earn women 23

Factors Influencing Pay and the Gender Gap Occupation choice Industry choice Education Experience Part-time work/ flexible scheduling Time out of workforce for family care 24

Experience and Part-Time Status: Women more likely to Work Fewer Hours 25 Source: 2013 ACS 3-year Estimates

Experience and Part-Time Work Women are more likely to care for children and family. Time out of workforce for childbearing. Choose part-time work or relaxed occupations to allow for work and family. Economic theory suggests that the lower-paid partner will take on more home responsibilities. 26

Wage Gap Improvements from Women Having Children Later in Life Source: Bureau of Labor Statistics, Median usual weekly earnings of full-time workers. Women’s Usual Weekly Earnings as Percent of Men for Full-Time Workers

Resume Studies Suggest Women’s Experience Discounted Male and female pseudo-job seekers send similar resumes, but with different names. 1.Male receives more job offers. 2.Male receives higher starting salary offers. 3.Both male and female managers showed similar bias. Source: Blau and Kahn, 2000

Factors Influencing Pay and the Gender Gap Occupation choice Industry choice Education Experience 29 Montana Gap = $ ₵ 9₵ 7₵

Conclusions Much of the wage gap can be explained by human capital factors and productivity. There remains a gap. Research suggests cultural stereotypes of greater detriment than overt sexism. Culture changing more slowly than human capital factors. 30

EQUAL PAY INFORMATION: DLI WEBSITE: ECONOMIC DATA WEBSITE: