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A Project of The Annenberg Public Policy Center

Clinton Spins U.S. Rank on Gender Pay

Hillary Clinton cited data from the World Economic Forum to present a misleading picture of U.S. performance on gender pay disparity compared with other countries around the world.

Speaking at the Women in the World Summit on April 23, Clinton said the World Economic Forum ranked the United States “65th out of 142 nations and other territories on equal pay.” A WEF report did, indeed, rank the U.S. 65th when it comes to “wage equality for similar work.” But that’s not a ranking based on actual pay disparity for similar work. Rather, it is a ranking based on a survey of business leaders’ perception of unequal pay for doing the same work.

We couldn’t find international data on wage disparity for doing similar work by country. However, the International Labour Organization looked at wage disparity for the U.S. compared with 28 other European countries, and the U.S. ranked second best after adjusting to account for “explained” factors such as the number of hours worked, education, experience and occupation — elements that would bring the statistic closer to representing the gap for doing “similar work.”

Here’s what Clinton said at the Women in the World Summit:

Clinton, April 23: And if you doubt what I say, look to the World Economic Forum, hardly a hotbed of feminist thought. Their rankings show that the United States is 65th out of 142 nations and other territories on equal pay. Imagine that. We should be No. 1.

Clinton is referring to the WEF’s 2014/2015 “Global Gender Gap Index,” which tallies an overall ranking based on a variety of factors such as economic participation and opportunity (including such factors as the percentage of professional and technical workers), educational attainment (including literacy rates and enrollment percentages at various levels of education), health and survival (such as healthy life expectancy) and political empowerment (such as the percentage of female members of parliament). Based on the composite score of all the various scores, the U.S. ranked 20th out of 142 countries overall.

Clinton’s statistic is derived from one of five “sub-indexes” for the “economic participation and opportunity” score. The U.S. report card shows it ranked 65th when it comes to “wage equality for similar work.”

But that is not a hard statistic based on actual inequality in wages for doing similar work. Rather, it is based on an executive survey of business leaders. Respondents to the executive opinion survey in 2013-2014 were asked, “In your country, for similar work, to what extent are wages for women equal to those of men?” They were then asked to assign a score from 1 to 7, with 1 meaning “not at all — significantly below those of men” and 7 meaning “fully — equal to those of men.”

In other words, the U.S. ranked 65th according to the opinions among U.S. business leaders who responded to the survey about the pay disparity between men and women for doing similar work, compared with the opinions from executives in other countries about pay disparity in their countries for similar work.

As the WEF explains, the executive surveys are often used when hard data sources “are scarce or, frequently, nonexistent on a global scale.”

In fact, we could find no data that compared and ranked the performance of countries based on pay disparity between men and women doing “similar work.”

But data from the 2014/2015 Global Wage Report on wages and inequality from the United Nations’ International Labour Organization provide some useful indicators. The report, based on data from the 2013 Panel Study of Income Dynamics directed by the University of Michigan, shows the difference in average monthly pay between men and women in the U.S. is comparatively large — a pay gap of 35.8 percent. That’s larger than in European countries. But this is not a measure of unequal pay for “similar work.”

“In the U.S., a large share of the pay gap (28.2% out of 35.8%) can be explained by factors which one would normally expect to explain differences in wages between individuals, including personal and industry characteristics (like education, experience, economic activity, occupation, number of hours worked, etc.),” Patrick Belser, a senior economist with the ILO told us via email. “So once we take these factors into account, the ‘unexplained’ component of the gender pay gap, which includes discrimination in the labor market, is relatively small compared to European countries.”

Moreover, Belser said, the data shows that “in the U.S. this ‘discrimination’ (if you will) mostly occurs at the top, between men and women in the top 2 deciles [the top 20 percent]. At the bottom, there is no detectable pay discrimination in the data that we have looked at.”

Looking at the “unexplained” part of the gap — the difference between the “actual” and “explained” disparity, accounting for factors such as experience, education, broad occupational categories, industry, location (urban, rural) and hours worked — the U.S. disparity rate (7.6) is more than twice as low as the European average (19.8). The only country among that group with a smaller gap than the U.S. was Germany.

In other words, Clinton can’t accurately claim that the U.S. ranks “65th out of 142 nations and other territories on equal pay.” Certainly not if she means equal pay for doing the same work. Clinton is citing a survey of perceptions about pay disparity for equal work. It is entirely possible that perceptions of pay disparity in the U.S., and other countries, don’t reflect the actual disparity.

It is also possible that public opinion in the U.S. has been influenced by Clinton and others, including President Obama, who have repeatedly cited the statistic that in the U.S. women make 76 cents (Clinton) or 77 cents (Obama) for every dollar earned by a man “for doing the same work.” That oft-cited figure from the Census Bureau does not represent the pay gap for doing similar work.

As we noted when Obama cited the statistic in a campaign ad, the Census Bureau figure is the median (midpoint) for all women in all jobs, not for women doing “the same work” or even necessarily working the same number of hours as men. In fact, women on average work fewer hours than men and are generally under-represented in jobs that pay more. In other words, it is inaccurate to blame the entirety of that wage gap on discrimination against women doing the same jobs as men for the same number of hours.

The Pew Research Center did estimates based on hourly earnings of both full- and part-time workers, and this year found that women earn 84 percent of what men earn. According to Pew’s surveys, some of that disparity is because women were more likely to take career interruptions to care for their family, which can hurt long-term earnings. In addition, Pew noted, “women as a whole continue to work in lower-paying occupations than men do.” And last, Pew noted that “some part of the pay gap may also be due to gender discrimination.” Women were about twice as likely as men to report that they had been discriminated against at work because of their gender.

The ILO data on the “unexplained” wage disparity may be the closest that international statisticians have come to identifying the portion of the gap that may be due to discrimination for women doing similar work. By that measure, the U.S. is doing relatively well, at least compared with European nations.

— Robert Farley