Today is “Equal Pay Day,” the day that represents how far into 2014 the average American woman would have to keep working in order to earn what the average American man had earned in the previous year. Women earn 77 percent of what men do, we’re told. This must be caused by — I’ll give you three guesses — discrimination!
Of course, there is no 23% premium that men earn over women; the statistic is preposterous on its face — what firm wouldn’t instantly fire all its male employees and replace them with women in order to earn that kind of return?
It turns out that the alleged pay gap vanishes into thin air when we disaggregate the data and compare apples to apples. I talked about this on my podcast today, with Professor Mark Perry of the University of Michigan. Here’s the link to the audio, if you prefer that, and there’s a YouTube below.