Fun With Math …

On tap this edition: a thought experiment in U.S. compensation levels. With a little luck, today’s class will end with a stake driven through the heart of the tired, old argument about payroll patriarchy in America.

Stick with me on this. It’ll take some mental gymnastics. You’d best hydrate right now. 

But first, let’s start with the value proposition of a college degree, because it’s going to be majorly relevant to the discussion. According to the Bureau of Labor Statistics, people with a bachelor’s degree averaged roughly $77,000 in income in 2022. Those with an associate’s degree were at a considerable earnings disadvantage, at about $55,000. Below that? Well, let’s not go there. This will allow us to be as deferential to the wage harridans as is humanly possible with this.

The U.S. work force numbers roughly 161 million people. For purposes of this discussion, we’ll limit their biological division to a mere two genders. Over the past 40 years—precisely the time since women began to outnumber men on college campuses—roughly 8 million more women have earned bachelor’s degrees than have men. 

Let me restate that: 8 million more women are better positioned for higher incomes than America’s working-age men.

This is where the math gets trickier. At a difference of $22,000 each, the 36.8 million women with college degrees would have out-earned the 28.6 million men by a tidy $494 billion.

My back-of-the-envelope calculations put combined wages for all Americans at about $10.2 trillion. Lo and behold: Stomping around the BLS data sets, I see their bean counters put the number at $10.4 trillion. Close enough for this exercise. But in order for women overall to have earned 84 cents for each dollar earned by a man, the non-degree holding population would have needed to really kick the pay-discrimination knob up to 11. And combined earnings for everyone would have to be closer to $12 trillion to produce that level of wage bias.

This means that somewhere out there, we’re missing $1.62 trillion in aggregate income. And if you divide that among the men who are supposed to be thieving their way out of the payroll office, that comes out to a shortage of $30,000 each, per year, if they’re to get 16 cents ahead of women every hour, every day, every year.

At this point in my career, that means I’m short … oh, about $1.44 million. I’d sure like to have that sitting around before retirement kicks in.

Or, instead of more grousing, mayhaps we could just agree that big-time averages simply can’t tell the whole story of compensation in a $23 trillion economy. There will be winners. There will be losers. Members of each gender will be represented in each cohort. 

All of which leaves me with a few questions:

• If the scoundrels who are accused of paying their staffs less than they’re truly worth are really doing so, why wouldn’t they simply hire women exclusively and just pocket that 16 percent difference in payroll?

• If the prevalence of proven wage discrimination is enough to produce a 16-cent per hour differential between the sexes, shouldn’t the lawsuits be pouring into the courts by the millions? I’ve never seen a law firm that specializes in workplace litigation turn its nose up at a slam-dunk case.

• Since women in education and health care outnumber the next biggest super-sector of employees by darn near 2-1—and since, as a group, those workers hold jobs that pay considerably less than, say, folks in construction or financial services—isn’t any distinction between genders in all other sectors combined, by definition, tilted in favor of women across those sectors?

• Final point: I see where the young lady who heads up a company I’ve never heard of—Advanced Micro Devices—was America’s highest-paid female CEO each of the past five years. Last year, she scraped by on $30.3 million. I don’t expect she owes a nickel of that to me, but it’d be nice if those griping loudest about compensation disparities would hound her about it for a change, rather than lump me in as part of the crowd responsible.

End of rant. Now, instead of tearing each other up about how big our respective slices of the pie are—which may be the point of all the hoo-ha about money running all the way back to Rosie the Riveter—can we start paying a little more policy attention to what we need to do to make not just bigger pies, but a lot more of them?

Your move, Washington.