Friday, October 31st, 2014
Mostly True
Obama
Women "make 77 cents for every dollar a man earns."

Barack Obama on Tuesday, January 28th, 2014 in the State of the Union address

Barack Obama, in State of the Union, says women make 77 cents for every dollar a man earns

President Barack Obama, flanked by Vice President Joe Biden and House Speaker John Boehner, R-Ohio, gives the 2014 State of the Union address.

During his State of the Union address, President Barack Obama made a claim about pay for women in today’s economy.

"You know, today, women make up about half our workforce, but they still make 77 cents for every dollar a man earns," Obama said. "That is wrong, and in 2014, it's an embarrassment. Women deserve equal pay for equal work."

It was not the first time Obama (or other Democrats) have offered the 77-cent data point -- not by a long shot. A search on the White House website calls up literally dozens of examples of policy papers, blog posts and speeches in which the president cited the 77-cent statistic. He used it in a proclamation for National Equal Pay Day (July 20, 2010), in remarks at a White House forum on women and the economy (April 6, 2012), in a conference call with reporters (June 4, 2012), and remarks on the 50th anniversary of the Equal Pay Act (June 10, 2013), just to cite a few.

Before we get into the statistics, we need to explain how we’re approaching this claim in this fact-check. We’ve heard the 77-cent statistic used a lot of different ways, and small changes in wording make a big difference in determining whether it’s accurate or not.

The less accurate version -- once offered by Obama himself -- states that women make 77 cents for every dollar a man earns for the same work, or in the same job. As we’ll explain below, the data doesn’t show that. By contrast, the more accurate version simply states that women make 77 cents for every dollar a man earns, period. That is more accurate (though not without some caveats, also listed below).

We struggled a bit with how to classify the claim Obama made in the State of the Union, since his phrasing was somewhat ambiguous. He used the more accurate formulation, but he then followed up two sentences later by saying, "Women deserve equal pay for equal work." Did Obama’s "equal pay for equal work" line suggest that he believes the 77-cent pay differential refers to statistical comparisons of "equal work"? Or was this sentence simply a philosophical statement that was distinct from the statistical claim?

Ultimately, we decided that Obama’s statement that "women deserve equal pay for equal work" was aspirational rather than a part of his statistical claim, so we’re judging him on his claim that women "make 77 cents for every dollar a man earns."

Here’s a rundown of what we’ve found in the past, updated for the most recent data.

Ratios vary depending on the methodology

The basic federal data comes from two agencies -- the U.S. Census Bureau and the U.S. Bureau of Labor Statistics. But the two agencies’ numbers don’t exactly agree.

The Census Bureau, which tracks annual wages, found women who worked full-time, year-round in 2012 made 77 cents for every dollar men earned across the country -- a percentage in line with what it’s been for the last few years. This comparison includes all male and female workers regardless of occupation.

Meanwhile, the Bureau of Labor Statistics uses a different measures to analyze the pay gap, including weekly wages. BLS found that women who worked full time in wage and salary jobs had median usual weekly earnings of $669 in 2012, which was 82 percent of men’s median weekly earnings. This, too, was in line with the ratio in recent years.

What’s the difference? Unlike the measure of annual wages by the Census Bureau, the weekly wage analysis does not account for people who are self-employed. It does include people left out of the year-round wage measure, such as some teachers, construction workers and seasonal workers.

Another measure -- hourly rates -- shows a smaller degree of pay disparity. According to BLS data, women were paid 86 percent of the median hourly wages of men in 2012. This evaluation accounts for part-time (fewer than 35 hours) workers, which are more often women and are paid less than their salaried counterparts. Women paid by the hour made median hourly earnings of $11.99, compared to $13.88 for men. However, this figure excludes salaried workers -- another reason why the statistics differ.

Heidi Hartmann, president of the Institute for Women’s Policy Research, told PolitiFact in 2012 that the measure of annual wages is preferable, since it doesn’t exclude salaried workers. "It’s the one that goes back the furthest in time," she said. "It’s the one that is most traditional."

But some researchers, such as the Federal Reserve Bank of St. Louis, prefer working with hourly wages, arguing "an incomplete picture" is cast with weekly earnings because women work fewer hours than men, "which would make a gap in weekly earnings between the two groups substantial even if their hourly wages are the same."

In other words, there’s a range of professional opinion on what the data shows.

Differences in jobs held

It’s important to point out a few additional caveats.

First, there’s a significant variation in wage gaps from occupation to occupation.

The Institute for Women’s Policy research looked at pay parity for the top 20 occupations for women in 2011 using median weekly earnings. The center found the pay gap varied depending on the sector, though women lag in nearly every category. Nurses (96 cents for every dollar) and cashiers (90 cents) were closer than most; accountants (77 cents) and financial advisers (66 cents) were more divergent than most.

Second, it’s important to note that the existence of a pay gap doesn’t necessarily mean that the gap is caused by individual employer-level discrimination. Rather, some portion is likely the result of broader demographic patterns.

For instance, men and women historically enter certain fields more than others -- a phenomenon known as "occupational segregation." Women more often choose to be receptionists, nurses and teachers, while men pursue paths as truck drivers, managers and computer software engineers, according to the Institute for Women’s Policy Research. When data from all these fields is combined together, as in the Census and BLS studies, the gap is at least partially explained by the predominance of women in lower-paying fields, rather than women necessarily being paid less for the same job than men are.

In addition, women disproportionately obtain degrees that lead to lower-paying jobs than men, and they take more time off from work for pregnancy and child care, according to a 2009 analysis by the nonpartisan CONSAD Research Corp. in Pittsburgh. Despite the growth in fathers’ role in child care, the child-care burden shouldered by women tends to restrict their career options and hours worked.

While such patterns raise important policy questions, they don’t necessarily point to discrimination per se.

So how much of a role does discrimination play? Hartmann attributed anywhere from one-quarter to one-third of the gap to direct discrimination by the employer. A U.S. Labor Department blog post put it a bit higher -- around 40 percent. The CONSAD paper suggested that when you control for every factor but discrimination, the gap shrunk to between 93 cents and 95 cents -- not zero, but significantly smaller than the 77-cent figure Obama used.

When we checked with the White House, a spokesman acknowledged that there is more than one way to calculate the gender pay gap, and that discrimination isn’t the only factor causing the gap. But the spokesman added that it would be wrong to ignore how discrimination and differences in workplace flexibility impact occupational choice.

Our ruling

Obama said women "make 77 cents for every dollar a man earns."

It's worth noting that the entire 77-cent gap is not necessarily due to discrimination -- a conclusion some listeners might have drawn when hearing Obama mention "equal pay for equal work" shortly after citing the 77-cent figure. And there are alternative calculations that show a smaller overall gap. Still, the 77-cent ratio is a credible figure from a credible agency. We rate the claim Mostly True.